The following paper is the last step in the final marketing plan for Team C’s newly created product for an existing company, which in this case is Nike Corporation. The team was required to compile the last four weeks of assignments in which the team discussed the different aspects of marketing a new product. In this final phase of the five week long assignment, the team was to combine their Strategy and Positioning and Product, Pricing, and Channels papers along with their promotional strategy for the new running shoe into a single Marketing Plan. In addition to the compilation of the previous papers, the team discussed advertising of the product, public relations, the digital marketing arena, sales promotion of the medically prescribed running shoe, direct marketing, outdoor, and event marketing, as well as an initial budget for the marketing plan, a discussion of possible effects selling may have on the team’s offering, measures taken to insure successful launching of the product, and finally, any ethical issues that might be of concern in regards to the marketing of the new product. Compilation of Phases I, II, & III
Founded by two men, the company was established on January 25, 1964, as Blue Ribbon Sports, by Phil Knight and Bill Bower man. The company officially became Nike, Inc. on May 30, 1971. The company takes its name from Nike the Greek goddess of victory. Nike markets products under brands such as Nike Pro, Nike Golf, Air Force 1, Nike Dunk, Air Jordan, Nike Skateboarding, and companies including Converse, Brand Jordan, and Hurley International. Also, Nike manufactures sportswear and equipment, and the company operates retail stores under the Nike town name. The Nike Corporation is introducing a new product geared toward individuals with orthopedic issues. This new shoe will be branded the “Nike Adjust” and will be available only through your doctor and customized for your individual foot issues. Individuals will receive a prescription for their shoes at their doctor’s office and then their specific shoes can be ordered from participating shoe stores.
This paper will discuss the marketing plan for this product including explanation of the product, advertising, public relations, the marketing strategies, and professional selling effects on offer, initial budget plan, methods to success, and the ethical issues in this plan that may arise in the future. The Nike Adjust is a self-adjusting shoe with sensors in the bottom that can be adjusted. The adjustments will allow even distribution of air flow based on your individual foot problem and how severe it has become. Each pair of Nike Adjust shoes will be customized and any adjustments needed, can be made at specialty stores or at your doctor’s office. Whether walking, jogging, or running, foot pain will slowly diminish for sufferers. Individuals can also customize their Nike Adjust shoes based on color and style so they don’t feel like they are wearing “healing” shoes. For example one segment could be the 20 to 40 year olds that are very active and have had injuries or chronic foot issues that are looking for a way to stay active without pain.
These individuals could be marketed to by Nike having endorsements from professional athletes whom may have had foot injuries. Another way to target them would be to have advertisements during professional sporting events, or sponsoring marathons or other running events. Another segment of the larger targeted market maybe those over 40 or 50 years old that are not focused on fashion as much but more ease of use, and pure comfort of the product. And they are individuals that may not be focused on high intense exercise or focused athletic support. These individuals will be looking for a practical product that provides support in a concealed shoe that is easy to put on, and provides easy adjustments and changes. The marketing for these consumers maybe more of a print advertising plan where adds are pulled in news or golf magazines, or T.V. spots during news or other programs that are specifically targeted to those individuals.
Since the targeted market for the Nike Adjust shoes will be those individuals with foot injuries or chronic foot pain, it would be safe to assume the organizational buyers and consumers of this new product would be those who fall into these categories. From an organizational buying standpoint, because the Nike Adjust shoes will be prescribed by doctors, medical clinics, and podiatrist offices will likely buy and carry some of the shoes. While health care plans may not yet cover the purchase of the Nike Adjust, it might often be easier for consumers (especially those who are elderly) to visit their podiatrist and receive their shoes while they are there. This will save the client time and possibly money by buying the shoes directly from the doctor’s office. Athletic shoe stores would also be another organizational buyer of the Nike Adjust shoes. In order for consumers to purchase the Adjust, shoe stores must first offer and carry the shoes. Stores such as Footlocker, Champs, and Finish Line, for example, could contract with Nike to become exclusive carriers of the Nike Adjust shoe giving them the ability to offer the shoes to consumers who choose not to purchase directly from Nike or their doctor.
Obviously certain factors will influence the purchasing decisions of both organizations and consumers. Although there are estimates as much as 90% of the world have some type of foot abnormality, only a very small percentage actually address the issue by purchasing special shoes or Orthotics (The Sole Mate, 2014). With the intent of the Nike Adjust to be a solution to many foot issues such as plantar fasciitis, Club foot, High arches, as well as several types of ankle and knee issues, as well as hip and lower back pain. It is critical to the success that these ailments are properly diagnosed and treated properly, with properly fitted shoes (The Sole Mate, 2014). Nike Adjust has decided on a target market of athletic individuals as well as older individuals who have chronic foot, ankle, or leg issues. Generally, people with these types of conditions will choose to visit a podiatrist in hopes of alleviating pain either through therapy or therapeutic shoes.
Some of the features that Nike Adjust has to offer is they are custom fit, they are aimed to address each individual’s needs, they have adjustable sensors, and they are aimed to help foot issues as well as potentially heal the foot. The feature of the adjustable sensor is one that other therapeutic shoes do not offer. Nike Adjust will solve the needs of the athletic target market by not only giving them support where they need it, but also give them the ability to enjoy their activities while not having to worry about furthering the damage. Nike Adjust, with this innovative adjustable sensor, will also benefit the needs of the older target market. It is not uncommon for older individuals to develop issues with feet, ankles, knees, legs, and even hips as they age. However, not all individuals like the look of therapeutic shoes. With Nike Adjust, the sensors will be custom fit for their specific needs as well as providing a stylish alternative. Nike Adjust will also benefit the needs of the target market by allowing them to customize these shoes in conjunction with their doctor.
This will provide the maximum medical benefit possible. When customers purchase these shoes at a premium cost, they must fit, be comfortable, and “work”. Therefore marketing is extremely important for success of this new product! If Nike were to sell these shoes over the counter, there would be issues due to miss-fitments. Wrong adjustments prior to usage and so on will simply damage the brand and its image. When looking at the 4 P’s of marketing, price, product, place, promotion will be key. The product should speak for itself a shoe that allows those who were previously in pain to walk or run pain free, this should be easy to overcome with proper promotion, which Nike is an expert at, find a retired star athlete who now retired, and use them to promote. One must also look at the product life cycle and how Nike’s marketing strategies and efforts will change as the product matures. To better understand this, we should first look at and identify what the product life cycles are, then look at how marketing would change.
The first stage of the product life cycle is the development stage. This first stage is where prototype and design changes are made to insure the shoes are engineered and manufactural for the best overall quality, low production costs, and as low as possible scrap rate during production builds. For example, during the end of the development stage, Nike may not do much in the way of advertising other than a few timely spot adds during high profile events such as the Super Bowl or a the Masters golf championship, where many demographic groups will be watching a single event. This is the best way to get visibility on the up-coming shoe launch, without over exposure when the shoe is not in production or available to the public. The second product life cycle stage would be the actual introduction of the shoe, and this would be when marketing and advertising would be at its peak.
Nike would continue with new ads at the key or cross market ads, again the Super bowl or major golf and tennis events. We would want to focus marketing anywhere people can watch and see the product. This is the time that Nike would push doctors and the selected shoe stores to begin hanging posters, having demos of the shoes on the shelf so people can touch and see them. There would also be an increase in marketing due to adding print media, and internet marketing on social networks such as Twitter, and Facebook. Endorsements from high profile athletes come into play at this stage of the product life cycle as well. If you look at marketing in the past, Michael Jordan did a ton of commercials for Nike and “his” Air Jordan’s, but as the life cycle changed into the growth and maturity stages, the advertising needs reduced. Changes such as that mentioned happen because product awareness has been established, and if successful, continuous high profile advertisement will not produce added sales, the demand or market has been established, or the product awareness is at its peak.
It is important to note that if a product is not successful during these product cycle stages, advertising may actually increase to help boost sales, while a second product launch or next generation is developed. This increase in advertising is due to the high investment that has already been made to produce the product but that may not yet have been recouped. As a product ages and has been on the market its sales and “luster” often wears off, to where there is less demand. This is where the marketing of the product is focused more to the doctors, and patients that truly need a shoe like this. Oftentimes this is done in conjunction with the launch or development of the next generation. Public relations is also an important aspect to this part of the strategy. Distribution channels in marketing are one of the classic “4 Ps” (product, promotion, price, and placement, also known as “distribution”).
They are a key component in a company’s entire marketing strategy, furthermore, they help expand its reach to consumers and create revenue. Budding companies can sell through a single distribution channel or through multiple channels that may include things like direct sales or internet sales, through wholesaler, or distributors, from catalog or direct at stores/outlets, Value-Added-Resale or VAR, through consultation, retail, dealers, or sales agents and manufacturing representatives. For this particular new product, it would be wise to use channels such as catalog and internet sales, and through channels like the newly created branch of Nike Adjust (specifically for making medically prescribed foot beds inside the new running shoe for patients/clients) for the distribution part of it. Since this new product is of a medically prescribed nature, some specific channels for distribution would have to be considered.
One way would be to promote the specialty store, Nike Adjust, as well as its new medically prescribed running shoe made available by doctor or surgeon prescription only through online ads, catalogs at doctors’ offices, pamphlets, and flyers in newspapers, radio ads, and magazines. Nikes professional selling effect on offering Price point shouldn’t be an issue, but they will have to be at a reasonable price so those on Medicare and low income people can afford and the product can be presentable with quality product for the customer. Packaging, color, and quality are important for the products performance and visual stimulating effect. For packaging and the color, Nike will be using a color values in society’s behavior to implement in the packaging strategy (ex; red symbolizing anger, blood, fire, etc.). Color influences emotions, attitude and perception of an item for many consumers. Since our product is to promote healing and comfort to individuals with podiatrist issues, Nike will use blue and clear as the shoes packaging.
Blue to the US society psychologically represents medical, trust, cleanliness (clear as well), and is also one of the most favorite colors chosen on average and many other things depending on the person and representation to them ( 40ver4.com, 2014). This color chosen is based on a higher percentage in order to increase customer trust and quality of the product. The pricing strategy Nike will lean towards will be having a quality product that meets competitors pricing while also exceeding competitors pricing. Since competitors offer orthopedic shoes ranging from $55 to $250 for a pair of orthopedic shoes, Nike wants to be able to average out the price because people are also buying the brand in order to be within the competitors price ranges.
Drew is a shoe company that sells orthopedic shoes and their market value is at $47.10 which does not show that their high prices may be benefiting them. Nike’s market value is at $99.29 with shoes ranging from $55 to $150 so this price range seems to fit what the average consumer expects to pay for a shoe (Nike Inc, 2014). Analyzing other shoe brands that are well known, such as Adidas, shows that all have market values in a preferable range anywhere in the pricing range of $55 to $150. Looking at the types of shoes that sell for more because of their specs, Nike would price the new orthopedic shoes at $120 dollars which is the middle between their basic shoes and their popular shoes showing that this shoe is not basic and is priced higher due to its purpose and quality. Advertising
Advertising is important for the promotional strategies success. Advertising keys into what will be discussed further with marketing strategies and without a foundational advertising strategy, marketing in any of these areas would not be functional. When advertising for a new product, the first thing a marketing manager should do is set some specific objectives to guide the advertising efforts. It is important to understand what and when various types of advertising may be needed, and to know how to choose the right medium. There should be an understanding about the specific ways digital advertising is different from other media advertising, and have a good plan for the copy thrust; best words and illustrations of an ad’s communication (Cannon, 2011).
The advertising manager should know the legal aspects of advertising a new product, and the importance of different types of publicity for the new running shoe, as well as the nature and importance of different types of sales promotions. In the instance of this newly created product made by Nike affiliates, a medically prescribed running shoe that still provides style and modern design, as well as still provide the necessary medically enhanced advances no other ordinary running shoe can provide for people with foot, back, insole, and arch issues (Cannon, 2011).
Advertising objectives typically start with the marketing manager, who works side by side with the advertising manager to create the objectives along with an appropriate budget to accomplish them. Some potential advertising objectives would be to promote the shoes as the most technologically advanced on the market, increase awareness of the Nike Adjust brand by fifty percent in the chosen primary target market, try to increase sales of the new running shoe by at least fifteen percent, get approval for a new trial in the targeted geographical market of the running shoe from a preferred twenty percent of the consumers by the end of the calendar year, and try to obtain at least one hundred thousand new customers to visit the new running shoe’s website made by Nike Adjust, and click on the links provided to get valuable information about the new shoe and its wonderful benefits (Cannon, 2011).
In the advertising world there are two new avenues: the computer and the cell phone. They are captivating consumers’ attention from watching television and reading magazines and newspapers. Both of the screens mentioned will enable consumers to access the Internet, where people can socialize with friends, forage through news feeds and other information, appreciate entertainment like videos, and of course, shop. This big transformation in consumer behavior has created some new challenges and opportunities for marketing managers when trying to target specific segments or customers through digital media (Cannon, 2011).
Advertising on the Internet has evolved swiftly, and as marketing managers find what works best, technology generates new forms of advertising. In order to get the attention of web surfers, Internet advertisers have created different types of ads. The banner ad is the most common type in which a small rectangular box usually including text, graphics, and sometimes video to get attention and hold interest. These ads appear on many web pages and even social media sites like Facebook and Twitter if the user does not have a pop up setting blocked (Cannon, 2011). With the previously discussed advertising strategy in mind. We will use these concepts and implement them in the public relations, digital, direct, event and outdoor marketing areas. Public Relations
Public relations is also an important aspect to this part of the strategy. According to CBS Interactive Inc. (2007), public relations can often be used to promote new products and support various sales and marketing objectives. The media today has a variety of ways to enhance a products public relations depending on the goal of the company’s marketing strategy. Several different opportunities or avenues can be used to promote the Nike Adjust shoe using public relations. As part of Nike’s public relations strategy, the best avenues to take would most likely be submitting press releases to trade publications, doing a case study or survey to increase customer understanding of the new product, or write a “how-to” article with instructions on product usage. While public relations is an important aspect of the marketing strategy, one must also be careful not to “overuse” public relations avenues as well.
“Press conferences should be held only for product launches that are important for your company or the market as a whole” (CBS Interactive Inc., 2007). Nike will want to ensure that if they hold a press conference it is at the initial product launch of the Adjust branded shoe and not throughout the production or after it has been launched into the market. This could be perceived as wasting a journalist’s time. Nike should also consider hiring an external consulting firm to assist with press releases and managing press conferences. The internal marketing team can work closely with the consulting firm to ensure they have all the pertinent product knowledge and information needed to pass on to the public. Digital marketing
Digital marketing is extremely importing for marketing in today’s society. With majority of the population online this type of marketing keeps the business ahead of the game. The goal for Nike is to establish where and what they are going to advertise the new product. Social media sites such as Facebook and twitter may have some networks to market out so that consumers are aware of the new product and it travels word of mouth online. Also making advertisements on websites such as webmd.com and other professional medical sites will allow the product to branch out in the medical field. Creating a marketing funnel for digital marketing is also and effective way to success. Marketing funnel allows the company to map out a customer’s journey from when a customer is a non-customer to when they become a potential customer and the strategies for encouragement to lead to this process (Bryan, 2014). The marketing funnel can be thought of in four parts which are awareness, interest, desire, and action.
Awareness is for the potential customer to be aware of the product by using a lead magnet or call-to-action to give the customer what their looking for while also retrieving their personal information and finding out whom they are as consumers. Call-to-call action is an image or text prompting visitors on the site to take action such as subscribing to online offers. Lead magnets work in a similar fashion however lead magnets supply information for trade of personal information. Interest stands for the interest shown in the consumer and this is where Nike will show them that they care about their customers’ needs and that further information will be supplied to them if needed. Desire stands for pushing the interest of the consumer with the information to hook them into wanting the product. Contacting the customer through an automated email stating more information on the product and why and how they need the product. Action is where Nike takes the next step towards purchasing with the consumer by discussing price, offers, promotional programs, etc. that are needed from the buyer. These strategies will be discussed in our sales promotion area as we will use sales promotions and referral promotions to make non customers potential customers. Sales promotion
Sales promotion of this new Nike shoe will entice customers to purchase the product. The strategy will include a referral program, sampling, free gift, and special pricing. The referral program will allow any individual who purchases a shoe and refers someone to receive five dollars off coupon for any Nike products. Sampling and free gifts would come into the products shoe box. Inside will be a pair of socks with a small sample size deodorizer. Special pricing will be listed for military members or veterans, college students, disabled, and individuals who are sixty-five years or older. They will receive a five percent discount from the product. Another special pricing technique that would be used is during the holidays the shoes will go to forty percent off to improve the marketing of the product. Sales promotions will entice the consumer to look into the product and depending on the deals to them may buy it faster than if there were no sales promotion. Direct marketing
Nike will implement strategies of direct marketing with current and potential customers through direct mail, internet and online marketing, and direct response advertising. Nike will be investing in small mail able ads to sixty-five plus communities in order to branch out to the communities that are less likely to use the internet. This will help them sell their products to individuals with podiatry problems and the easiest way to branch out from there. Internet and online marketing are covered in the digital marketing section of this paper but another way to direct market with a customer is to make a game ad so that the customer has to play a game etc prior to being sent to the page where they have to input information which is similar to direct response advertising. Direct response advertising is advertising the consumer to the product directly from the ad. The positives with direct marketing is that it saves time, less hassle, less expensive, more convenient and its anonymous for consumers. Event marketing
As we look at event marketing, there are several types of events that Nike can become involved with, such as sponsoring a Marathon which can be used for cross promotion of the new Nike Adjust as well as other running shoes. This would be key because you can capture targeted customers as well as potential future customers. I say this because if you cross promote you may have customers that notice the advertisement, but are not in direct need for such a shoe at this time, but with an injury or other concern may become a customer in the future. There are several other events that Nike can co-sponsor such as health shows, or medical shows that are focused on bringing new products to market. Often times these can be in conjunction other events such as mountain bike races, or running events, or hiking events. Outdoor
As we look at events like hiking trails, mountain bike races, or even marathons, it can be difficult to see signs or specific advertising banners, this is where outdoor advertising comes into play.. One of the greatest outdoor advertising strategies, is the “Goodyear blimp” If you look at that strategy, Goodyear rents out it’s built in electrical billboard, yet always has the “Goodyear” symbol on the airship. Nike could also sponsor key parades and have an inflated shoe as a “float” if you look at the number of people that watch or attend major parades throughout the US, it could be a key marketing plan that is focused around family events that are always memory makers, and they will be focused at broad audience that can cover many targeted groups. The effect professional selling may have on your offering
Now that it has been established exactly what Nike Adjust is, how it will be advertised, the packaging has been established, and a good foundation has been laid out for advertising, the next step would be how to sell the product. Some companies, such as Amazon and Ebay, do their selling strictly online. Since this will not be the case for Nike Adjust, there are some elements that must be evaluated in terms of professionally selling the product to potential customers. In order to sell the product, qualified salespeople must be hired to promote Nike Adjust. A good salesperson will be one that is well informed of the product and one who is not only able to sell the product but to make the consumer want to purchase the product.
In order to do a good job of professionally selling, the sale team must be well educated and well trained. They must be knowledgeable of the product, the special features of the product, how it will help the target market with their specific orthopedic issues as well as know how to handle any issued that may come up with suppliers in relation to Nike Adjust. The sales team is basically the link between the product being produced and marketed to actually being introduced into the public. In other words, “The salesperson is often a representative of the whole company-responsible for explaining its total effort to customers rather than just pushing product. The salesperson may provide information about the products, explain company policies, and even negotiate prices or diagnose technical problems.” (Perrault, W.D. Jr., Cannon, J.P., & McCarthy, E.J., 2011).
As Nike Adjust continues to grow, the professional selling may change from just a few salesmen to a sales team with territorial managers. As the business continues to sell its product to specialty stores, doctors’ offices, and offer the product on the web, it may be necessary to break the business up into territories so that Nike Adjust can continue to offer professional customer service to the consumers at all times. If the quality of customer service does not remain at a stellar level, it could potentially cost the business to lose buyers. With professional selling, the way the product is handled behind the scenes can greatly affect the outcome of how well Nike Adjust does as a whole. Professional selling is broken down into three basic tasks. “The basic selling tasks are order getting, order taking, and support.” (Perreault, W.D. Jr., Cannon, J.P., & McCarthy, E.J., 2011). The main job of the order getter would be to present a knowledgeable presentation of the product to potential customers.
The order getter will have to be prepared to answer any questions that may come up and offer an answer to the questions that secure the buyer into purchasing Nike Adjust. The order getter will also be responsible for locating new customers as well as establishing a solid relationship with them to help the business grow. The order taker will basically have the task of just refilling the orders from established customers. They will also be responsible for keeping the customer informed if any changes are made to Nike Adjust, such as style, production, quality, or pricing. The order taker will have to maintain knowledge of what is going on with Nike Adjust in order to relay information in a timely and professional manner. If the order taker does not do this task as needed, it could keep established customers from placing any future orders for Nike Adjust, If this were to happen, it could dramatically affect the success of the shoes as a whole. The support task of professional selling will offer technical support as well as customer support.
The technical support specialist will be able to answer any technical questions the customer may have in relation to Nike Adjust. The customer support team will be responsible for handling any issues a consumer may have as well as making sure that the consumer is happy with their Nike Adjust purchase and will want to continue their purchasing in the future. If the customer service support does not meet the expectations of the consumer, this could potentially harm all of the efforts made in the marketing of Nike Adjust. The main goal is to help the target market help their orthopedic issues as well as help them to heal. If any complaints or problems are not handled in a positive and professional manner, the customer may not return, therefore, harming all of the combined efforts to promote Nike Adjust to the public.
Another effort of professional selling will be that once Nike Adjust has developed a large consumer base, again, doctors’ offices and specialty stores, there may be a need to introduce technology into the selling aspect. For example, if a doctors’ office wants to place a new order for the office, they may not need to relate directly with their territorial manager. With all of the technological advances that have been made, the doctors’ office may be able to go directly to the Nike Adjust website and place their order as needed. This will also help them to view, change, and track their order as well. Professional selling definitely will have an impact on Nike Adjust as well as the offering of the product to the public. Through a dedicated sales team, a devoted customer service team, and a website with information available around the clock, Nike Adjust will be able to introduce the shoe and have the opportunity to grow steadily as an orthopedic shoe devised to help consumers manage their pain and discomfort in a stylish way. An initial budget for your plan
With these pricing strategies in mind, there are several ways to look at the initial marketing budget. From early product development to the end of its life cycle, the strategy or strategies may have to change depending how the targeted markets accept the product. The initial marketing plan has to start once the concept of the product is decided and confirmed with development is underway. Once the marketing plan is in place then it’s time to determine the budget, and it starts by looking at all aspects of the product, and its targeted markets, as well as price and projected profit goals. With that in mind, Nike is looking to sell each pair of shoes for approx. $120.00 each. With a cost break down of approx. $55 per pair of shoes to produce, $20.00 to promote and distribute, and $20.00 of profit, leaving approximately $25.00 for retailer’s margin. So with that in mind, if sales estimates of the new shoes are about 5% of the total sales shoe sales figures it would equate to a successful product.
These sales totals would equate to an estimated $14.5 million in annual sales, and if we brake that down to about $2 million annual for a marketing budget. As we look at this, we can break this into several areas, Digital marketing, and things such as Facebook, Twitter, and online ads on major sports web-sites. We can also look at things like direct marketing, such as sending direct texts to customers, interactive websites, fliers at local shoe stores, as well as catalogs and other paper media. Then there are sales promotions such as package deals with a smart phone app, or smart watch apps allowing you to see what your shoes are doing, how they’re helping you heal or be active pain free. Then there are promotions such as discount sales, introduction discounts. Or Event marketing for things like marathon or running event sponsoring. There are several outdoor marketing events that can be used such as marathons as mentioned above, or collage or pro-sporting event advertising, or things such as air ship or plane streamer advertising. Any ethical issues your marketing plan might have
Ethical issues can arise for any company or organization when doing any type of marketing of products. The marketing team must consider all ethical standards when putting this marketing plan together. In the age of the internet, information is accessible to anyone and everyone and can remain online indefinitely (Sandilands, 2014). Before launching any kind of advertising whether online, T.V., or through the mail, the Nike marketing team will need to make sure that there is no false advertising or exaggerated product claims in the marketing of the new Adjust line. Stereotyping could be a big concern for the marketing plan as well. While the Nike Adjust shoe line is targeting certain age groups and people, we need to ensure that we don’t stereotype the people that we place in these target markets. There very well may be others outside of the targeted groups that will find benefits in using these shoes so the advertising needs to steer clear of limitations. Conclusion
Each area of strategy and planning proves to be important in the marketing of a new product or service, as evidenced in the information provided throughout this paper. Being aware of even the smallest detail can mean the difference between a successful product launch and a complete product launch failure. There is nothing more important for a new product launch then an excellent marketing plan.
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