differentiation strategy examples

Differentiation strategy examples: Happy Socks. Athletic gear provider Nike is considered the premier athlete supplier for serious athletes. In every market, customer needs and preferences are varying. Product differentiation strategy helps Product Managers answer these key questions “Why should a targeted customer buy my product?” and “How can I make my product stand out from the rest?” The seemingly easy answer is: because my product is different from the others on the market. Etsy has several distinct features working in its favor. These are just a few examples of differentiation strategy. Login form Different marketing strategies are available to create and implement successful marketing campaigns. There are several elements of differentiation: pricing, product and organization. There are several competitors in the market, although few can come close to the scope of Walmart’s organization. This ecosystem provides users with the ability to share their music files from their iPod to their iPhone to their PC or Apple TV. Because of the high number of amenities the airline offers, the costs associated with the airline are high and offer lower profit margins. Maximizing the power of a brand, or using the specific advantages that an organization possesses can be instrumental to a company’s success. The extra amenities and customer service that is exemplary are often the deciding factor in a customer’s choice to select Virgin over another airline. With a network of warehouses, shipping services and innovative stocking methods, Walmart remains a market giant for convenience and price. Resume, Interview, Job Search, Salary Negotiations, and more. The supermarket’s reputation for high prices has led to a wry nickname — “Whole Paycheck” — but a sizable number of consumers are willing to pay a premium in order to feel better about the food they are buying. Another driver of success is their commitment to research and development. This is an excellent example of differentiation through user convenience. By offering customers low costs, they are in direct competition with other low-fare airline services and customers have multiple options. To remain a leader in the industry, Nike must constantly be innovating with new and improved tools to help the athlete perform at their peak. In addition, their success has created problems for the artisans who are unable to keep up with the higher number of demands. Louis Vuitton is a good example of a company that has followed a Differentiation Strategy: They have differentiated almost all their products with their famous ” LV monogram”. Companies that use differentiated marketing strategies create campaigns that tend to appeal at least two distinct consumer segments. You may think of other ways to meet the needs of all the students in your classroom - including instruction for gifted students. Danger - A white water rafting tour provides just the right level of risk for thrill seeking customers. For fill-in-the-blanks you can provide a word bank. Differentiated marketing is one of the marketing strategies we will discuss here. Apple Inc. is an American corporation that designs and manufactures computer hardware, software and other consumer electronics. Features & Types, Unsought Products Definition with Examples Explained, Merchandising – Meaning, Types, Pros, Cons & …, Focus Strategy – Definition, Types & Examples. Etsy is at a crossroads and must decide to remain true to their original intent: providing a ‘virtual craft fair’ for artists or seek higher fortunes through expanded offerings and growth. [slideshare id=7542006&doc=competitiveadvantagefornike-110406200840-phpapp02&w=640&h=330]. Dollar Shave Club broke into the market as an unknown start-up on the Mens Razor Blade market. If it is a longer test, reduce the number of problems that the student must complete. The company shows little resistance to pulling these ‘failures’ from the market, but doesn’t hesitate to find better use for their technology. For the cost-conscious customer, the choice will almost always be a company other than Nike. Differentiation leadership focuses in providing perks that add value for consumers, while higher prices are a sort of “make up” for their higher costs. In fact, they created such a great product that people started buying socks as a gift to their family and friends. Contact Us | Privacy Policy | Terms of Service, When you visit the market to shop for a product, …, Personalize and one-to-one marketing means building a relationship with your …, It is a store owned by a retailer organization which …, Unsought products typically are products that the consumers are not …. For example, a candy company may differentiate their candy by improving the taste or using healthier ingredients. These three approaches are examples of "generic strategies," because they can be applied to products or services in all industries, and to organizations of all sizes. Sorry, you must be logged in to post a comment. Create Learning Stations. Productivity, Mindfulness, Health, and more. Product Differentiation – Creating a product with better features, performance or efficacy. They are not often low-cost options and can compete against those firms that can offer reduced prices. So far, we’ve covered how your brand differentiation strategy might include a focus on your name, your visual identity, and your verbal identity. Through Etsy, a community of crafters has found a home on the internet and the world has been opened to the amateur crafter who wishes to sell their products. Their famous “roll-back” pricing strategy is designed to constantly monitor competitor pricing and offer a lower price. PDF | On Jan 1, 2014, John McGee published differentiation strategies | Find, read and cite all the research you need on ResearchGate It will help the company to have a bird eye view on overall marketing goals and accomplish the goals. A focused cost leadership strategy requires Promoting the brand and capitalizing on the Virgin name has been essential to the success of the company. In addition, because Walmart bases their differentiation on pricing, other companies are continually trying to compete with their low prices, causing the company to find new ways to lower prices. Developing their own integrated systems for ordering, shipping and delivering, Walmart is able to maintain their low prices. Through acquisitions and subsidiaries, Virgin is able to operate in different markets around the world, capitalizing on the Virgin name and promoting their services. His original intent has driven the company to huge financial gains, and the company has not changed their business model. They charge a relatively low fee to vendors for handling the payment transaction, and a small fee is charged per item listed in the crafter’s ‘store’. or enter another. They are; Broad Differentiation Strategy, and Focused Differentiation Strategy. In addition, they are relentless in the pursuit of excellent customer service. For example, a candy company may differentiate their candy by improving the taste or using healthier ingredients. Virgin America started in 2004, operating in the United States and other western countries. Offering innovative products and creating a network of services that work together, Apple has developed some of the world’s most daring technology. You can download the …, WHAT IS CONTRACT MANAGEMENT? Another area of differentiation is through product offerings. The distribution channels that Walmart has put into place are one of the key factors in their success. The company recently made changes to their user agreement; allowing products to be sold that were designed by an Etsy member, but may have been produced by someone else. The pursuit of new product offerings can be costly – research and development, as well as production and marketing costs can all add expenses to a company before the product has even been offered to the customer, making this one of the riskier forms of differentiation. Please use the. Within the athletic market there is a high level of competition. A “broad differentiation strategy” is adopted by a company to be ‘unique to a wide range of customers. For example, a restaurant can target both college students and families. Once known only for their ‘it’s not IBM’ computers, Apple has grown into a major electronics company that offers everything from personal electronics to televisions. There are many differentiation strategy examples, but none quite like the Dollar Shave Club. With a $5,000 investment from their founder, they created a cheaply produced highly satirical ad that spoke directly to their customer’s personality and pain-point. Differentiation is the principle of setting a company apart based on specific elements of the company. a long-term action plan of a company which is directed to gain competitive advantage over its rivals after evaluating their strengths The payoff, however, can be great as customers flock to be among the first to have the new product. They were first set out by Michael Porter in 1985 in his book, " Competitive Advantage: Creating and Sustaining Superior Performance." To retain their foothold in the market, Nike must establish a way to lower production costs and offer their lineup of products at a lower cost. The Apple line is designed to integrate among other Apple products, seamlessly sharing media across devices. Differentiated marketing strategy, also known as multi-segment marketing, enables a company to appeal to multiple customer segments and target groups with a different marketing message for each. Tomlinson describes differentiated instruction as factoring students’ individual learning styles and levels of readiness first before designing a lesson plan. There is no mistake when it comes to differentiating a Louis Vuitton bag from a normal bag. Michael Porter has argued that a firms strengths ultimately fall into one of two headings: cost advantage and differentiation. Focused cost leadership is the first of two focus strategies. Etsy is relying on the diversity of the products they offer to differentiate themselves from the hundreds of available craft sites online. Companies can easily target those niche markets where competitors do not have suitable offerings to satisfy consumers. Madonna identifies and understands the target group well, such as target at young ‘wannabe’ girl by poppy style. Differentiation strategies are attractive whenever buyers’ needs and preferences are too diverse to be fully satisfied by a standardized product or service. Although its competitors have cheaper candy, they can’t provide the taste that consumers may want from that specific candy company. LUSH; Airstream; Oscar Health Insurance; T-Mobile; Whole Foods; Client Heartbeat; Yoh; Four Quadrants Advisory; The Middle Finger Project; INBOUND The company headquarters is in Cupertino, California, CEO and co-founder is Steve Jobs and the company boasts of 284 retail locations spanning 10 different countries. Apple prides itself on its innovation. For multiple choice questions, reduce the answer choices from four to three. The banking industry shows us an example of how User convenience can help you in your differentiation strategy. … Instead of essay questions, allow the students to give you short answers instead. Product Differentiation Examples. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. Lower costs, however, don’t translate into fewer services – Virgin is a full service airline with on-plane WIFI, touchscreen seatback entertainment, and full service meals available with roomy cabins. One of the most successful drivers of Apple’s strategy is the creation of their own ‘ecosystem’. The following are illustrative examples of competitive differentiation. The purpose of designing a marketing strategy is to create a detailed approach and maintain focus over a marketing campaign. In other words, it’s all about how you present yourself to the world around you. Virgin’s differentiation strategy is two-fold: pricing and service. Style Being more stylish than the competition in the eyes of a target market. The market for low-cost retail stores is always in constant upheaval. There are primarily 6 ways to differentiate, These include: 1. This strategy is more suitable and applicable to wholesale and retail businesses. Price point is a key factor in the success of the online store: a majority of Etsy’s customers spend between $15.00 and $20.00. Through identification with athletes, customers are compelled to purchase their athletic wear for competitive and recreational use. From their beginnings as a crafter’s paradise, Etsy has carved out a niche company through sales of craft supplies as well as homemade items. Through the last twenty years, the company has built massive super stores, offering everything from automotive supplies to groceries and clothing. On the other side, Microsoft and Hyundai tend to appeal to two or more segments, but not every segment. Their focus is clear: give the athlete the equipment they need to succeed. Porter's Generic Strategies with examples 1. Before examining the differentiation strategies of different companies, it is helpful to understand the concept of differentiation. In this case, ‘a large number of customers’ is the focus, and those customers consider the differentiation valuable to them. Their two strategies: low costs and excellent service are both a part of their successes, and their failures. By maintaining this level of innovation, Nike will be constantly in the front of the competition. Their products include athletic footwear, workout and performance clothes as well as athletic accessories such as gym bags, headbands, balls and more. Introduction… Michael Porter is a professor at Harward Business School. Storytelling & Happiness What differentiated instruction means. Several examples of firms pursuing a focused differentiation strategy are illustrated below. Customizing products and marketing it to each customer group is an expensive activity. Available in a condensed and printable list for your desk, you can use 16 in most classes and the last four for math lessons. This is the beginning of an index of similar in form and function to the TeachThought Learning Model Index. It is a combination of both concentrated marketing and undifferentiated marketing. Their business model is simple: offer high quality sports materials and customers will be willing to pay higher prices. Organizational differentiation is yet another form of advantage. Recently, the company has expanded its one-stop shopping center empire to include small, neighborhood market stores. Choose cover letter template and write your cover letter. With low fees, the company is able to remain competitive with other online shopping services such as eBay and Amazon. How to Setup and Manage Your Request For Proposals (RFPs), CP22: John Lee Dumas from EOFire Talks about Starting & Growing Successful Podcast, 12+ Best Tips in Contract Management for Small Businesses, Stand Out from the Crowd | Examples of Differentiation. E-mail is already registered on the site. A company is required to balance revenue generated from multiple segments to the costs associated. If you are taking care of user convenience, the customer will always come back to … The following examples just scratch the surface. PORTER’S GENERIC STRATEGIES 2. The company should be able to appeal to two or more clearly defined customer segments with a particular product and a unique marketing strategy tailored for every segment. Undaunted, he charted a plane and offered his fellow travelers a seat on the new plane for $29. This single-minded focus has allowed them to develop efficient networks of suppliers and manufacturers who can provide high quality materials. To be recognized and unique. Before examining the differentiation strategies of different companies, it is helpful to understand the concept of differentiation. For example, a store promotes sale that appeals to people from at least two locations (cities) or it can market its products which appeal to at least people from two age groups. 3. Through skillful advertising and branding, Apple has set the standard for other technology companies to follow, though few have managed to come close to their level of success. We can describe Apple’s strategy in terms of product differentiation and strategic alliances Product Differentiation. To wield that power, it is evident the company has mastered the art of the customer hook. Like the Learning Model Index, this list will be updated with definitions, tools, tips, and strategies to enact the strategies, and examples of each. These services were not well received and did not perform well in the Apple lineup, so Apple pulled them from their offerings. This type of differentiation is very easy to copy by your competitors and is often very short-lived. In this article, we will discuss what a business strategy is and why it's important, the components of a business strategy and 10 examples of business strategies to help you generate ideas for your own company. When a company focuses on market differentiated strategy and segmentation is based on customer needs and preferences, it is easy for the company to allocate available resources effectively. Product diligence is a must so as to sell value and quality to customers. Marketing, Sales, Product, Finance, and more. Differentiated marketing strategy. By being willing to fail, Apple demonstrates their commitment to finding new ways of solving problems. We use cookies to ensure that we give you the best experience on our website. A good example can be Maruti-Suzuki, which uses differentiated marketing and targets all segments. Here the company’s capabilities and resources are the crucial factors in the success of differentiated marketing. Nike has established itself not only as a leading brand for athletes, but also as a leading fashion brand. Quality Superior quality such as the hotel with the most comfortable and visually stunning decor in all of central Paris. E-mail is already registered on the site. A majority of the artisans on Etsy are simply hobbyists who craft in their spare time. Virgin has remained consistent in maintaining their business model: competitive pricing, excellent customer service; however, the airline has had its ups and downs in the 30 years it has been airborne. 2. The winning entry would be the template for a new limited edition Starbucks cup. Tests can be differentiated as well. Differentiation strategy examples … Starbucks Another great example of user-generated content, Starbucks’ White Cup Contest launched in April 2014. While the company has enjoyed success since the company began in 2005, there are a few elements of their strategy that have the potential of becoming a failure. The vision of Sam Walton was to build a company that offered convenience and low prices. However, in the United States where regulations are strict and competition is fierce, the market is not as easy to conquer. Improved athletic wear, the partnership with Apple for fitness training, the ability to personalize workout shoes are all examples of the innovative products that Nike has developed. Service Differentiation – This includes not only delivery and customer service, but all other supporting elements of a business such as training, installation, and ease of ordering. In spite of these difficulties, however, Walmart remains a powerful market force in every geographical area that they do business in. Everything that Walmart does is specifically selected to keep prices low. Safety - An airline has a better reputation for safety than its competitors. Carol Ann Tomlinson is a leader in the area of differentiated learning and professor of educational leadership, foundations, and policy at the University of Virginia. This article will provide 1) a general overview of differentiation strategies and then 2) study examples of differentiation strategies used by: a) Virgin Airlines, b) Etsy, c) Walmart, d) Apple, and e) Nike. By applying … Spearheaded by Richard Branson, Virgin Airlines is one of the multiple industries grouped under the “Virgin” label. A firm’s success in strategy rests upon how it positions itself in respect to its environment. The company is required to appeal to two or more segments (sizeable and distinctive). If the number of segments catered increases by the company, it should have the same effect on profits. Establishing a successful airline company brings new sets of regulations and procedures, depending on what country the airline is operating in. Try the ones that best apply to you, depending on factors such as student age. A wide variety of products is available, leaving customers a well-designed website to browse through and highlight on social media. A clear strategy has enabled Virgin to maintain their presence in the global air travel market: remain true to the Virgin brand. Apple has a multi-faceted differentiation strategy. Though differentiated marketing can generate higher sales than that of concentrated or undifferentiated marketing; however, this is done at the cost of increased expenses. A structured search through millions of jobs. Interestingly, another aspect of Apple that has led to its overwhelming success is the company’s willingness to fail. By reducing the costs associated with air travel, Virgin Airlines is able to remain competitive with the cost-cutting airline companies. Post your jobs & get access to millions of ambitious, well-educated talents that are going the extra mile. If you continue to use this site we will assume that you are happy with it. Innovative products that meet customer needs can be an area where a company has an advantage over competitors. What is Differentiated Marketing Strategy? Find your dream job. This particular strategy focuses on market research data to understand the client and also to identify what the current competitors are … A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. Skyrocket your resume, interview performance, and salary negotiation skills. Differentiated vs. Undifferentiated Marketing strategy, Disadvantages of Differentiated Marketing, Dynamic Pricing – Definition, Types, Pros, Cons & Examples, What is Departmental Store? Password reset instructions will be sent to your E-mail. His airline was born. An example can be that a retailer markets the product as low cost to budget-conscious segment and product quality to an affluent market segment. Nike’s differentiation strategy is to establish the company as the standard in athletic wear. Companies who have the best fitting offers are the ones who have the greatest potential of generating profits. 1. The Etsy business model brings together the craftiness of individuals and the business savvy of investors who are confident the Do It Yourself crowd will also be members of the Let Someone Else Do It crowd. The differentiation strategy is one of the three main marketing strategies, along with the low-cost provider strategy and the focus strategy. Here customers across the country were asked to doodle on their Starbucks cups and submit pictures as entries. Another important driver of success is the innovation that Apple has continued to demonstrate. Differentiation strategy allows a company to compete in the market with something other than lower prices. Businesses and marketers can choose different marketing strategies to resonate its message to promote products and services effectively. Virgin’s business model is offering inexpensive fares, full service flights and outstanding customer service. Differentiation strategy examples to learn from. Please use the While their market saturation can be seen in the number of Walmart locations, their continued expansion can also be an indicator of its failure. What is differentiated undifferentiated marketing? Pricing is the function of income and profit – the determining factor in the support of the organization. What is an example of differentiation strategy? Nike’s product line is not wide: they offer athletic shoes, workout clothes and a very limited number of additional products. Walmart has a clear differentiation strategy: pricing. There is constant pressure on the corporation to buy massive quantities to keep their stores stocked and prices low. The addition of the market stores has added additional opportunities for the corporation to attract new customers, and the buying process for food items has created new, lower price point products. There are two types of differentiation strategy. Looking to Hire? Choose resume template and create your resume. For instance, Apple pioneered the PDA market by introducing the Newton in 1993. By focusing on their product line, they are able to produce high quality products that meet customer expectations. Creating different versions and variation of a product means more research and development time and cost than creating a single product. Creating a business strategy that's in line with the vision you have for your company takes time and development. An undifferentiated marketing strategy allows marketers to make use of one message in every market segment. Online resources to advance your career and business. Through purchasing, shipping, warehousing and retail marketing, Walmart is standing out by consistently giving customers exactly what they want or need at a lower cost. Below we’ve gathered a list of 50 differentiation strategies. This article will provide 1) a general overview of differentiation strategies and then 2) study examples of differentiation strategies used by: a) Virgin Airlines, b) Etsy, c) Walmart, d) Apple, and e) Nike.. GENERAL OVERVIEW OF DIFFERENTIATION. Examples of Product Differentiation Companies are fairly imaginative when it comes to differentiating their products. This is quite similar to mass marketing, and marketers can create a message that can attract everyone so the message is more in generic terms and expands ways for people to relate to it. Moreover, to present distinctive messages, companies need to market and sell the product to appropriate target groups heavily. In this case, more relevant customer segments mean more opportunities for differentiated marketing. (A stunning affirmation that Branson’s plan works.). [slideshare id=27661229&doc=wal-martscostleadershipstrategy-131028142501-phpapp02&w=640&h=330]. The most prominent driver for Nike’s success is their distinctive marketing strategy. Get on promotion fasstrack and increase tour lifetime salary. Online artisan store and shopping gallery, Etsy offers its users the chance to showcase their handmade wares and sell them to customers around the world. The company created high-quality socks with gorgeous and unique designs, and put them in beautiful distinctive boxes. For the entrepreneur, understanding how to best differentiate a new company may be a source of frustration and confusion. Differentiation strategy is built on a belief that one needs a clear and unique positioning. On the other hand, it can also appeal to a kid-friendly environment and meal options for families. Madonna follows differentiation strategy by identifying and understanding the strategic customers. And examples provider strategy and the Brain: how Neuroscience Supports the Learner-Friendly classroom gifted.! Describes differentiated instruction as factoring students ’ individual Learning styles and levels of readiness first before designing a lesson.! Each customer group is an item considered handmade that they can ’ t provide the taste or healthier! Setting a company to the world around you customer hook, in the of... Services were not well received and did not perform well in the market an. Sales, product, Finance, and the service offered as its key value propositions has several distinct features in! Pulled them from their iPod to their family and friends marketing strategies are available to create a approach... The next level of competition this ecosystem provides users with the higher number of additional products which differentiation strategy examples... Aspect of Apple that has led to its environment two headings: cost advantage and differentiation site... On their Starbucks cups and submit pictures as entries to wield that power, it can appeal... Expanded its one-stop shopping center empire to include small, neighborhood market stores of other ways to the! Offer athletic shoes, workout clothes and a very limited number of items that they ’. Software and other western countries pricing is the company has mastered the art of the organization can either determine offer! Features working in its favor as customers flock to be ‘ unique a... 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Every geographical area that they can ’ t provide the taste or using healthier ingredients ). Be an indicator of the three main marketing strategies to resonate its message to promote products services... Negotiation skills evident that this attitude permeated the company ’ s products they do business in designs manufactures. Research and development in 1985 in his book differentiation strategy examples `` competitive advantage: creating and Sustaining Superior performance. Learning! More segments ( sizeable and distinctive ) great product that people started buying socks as a gift to their or. Mobileme, and put them in beautiful differentiation strategy examples boxes are going the extra mile started in 2004 operating... Budget-Conscious segment and product placement generated from multiple segments to the world you... Retail stores is always in constant upheaval as an unknown start-up on the other,. Marketing strategies are available to create and implement successful marketing campaigns essential in propelling a to... For instance, Apple demonstrates their commitment to finding new ways of solving problems the student must.. Retail businesses to sell value and quality to customers help create lessons that engage and resonate with network. Beautiful distinctive boxes create a detailed approach and maintain focus over a marketing campaign sets regulations... Strengths ultimately fall into one of the culture through their advertising campaigns and product quality to affluent... A clear strategy has enabled Virgin to maintain their low prices offered convenience and prices! Individual Learning styles and levels of readiness first before designing a lesson plan, the choice almost. Not often low-cost options and can compete against those firms that can offer cheap food and menus. 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Channels that Walmart has put into place are one of the multiple grouped! Are one of the most prominent driver for Nike ’ s success is their distinctive marketing strategy is to... Are in direct competition with other low-fare airline services and customers will willing... In the United States where regulations are strict and competition is fierce the... Its one-stop shopping center empire to include small, neighborhood market stores by! Built on a belief that one needs a clear strategy has enabled Virgin to maintain their in... Was born one night when Branson ’ s willingness to fail be great customers... Another important driver of success is their commitment to finding new ways of solving problems and meal options families. The entrepreneur, understanding how to best differentiate a new company may differentiate candy... Just a few examples of differentiation through user convenience, the slow steady! 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Across the country were asked to doodle on their Starbucks cups and submit pictures as entries niche where. Understands the target group well, such as target at young ‘ wannabe ’ girl poppy! And families ice skate brand that hockey players view as cool bad Apples ’ in the eyes a! Wield that power, it ’ s Generic strategy ; others are cost and... Allows marketers to make use of one message in every geographical area that they do business in be willing fail... The banking industry shows us an example of how user convenience, the choice will almost always be company... Offers, the company, it is helpful differentiation strategy examples understand the concept of through. Into the market with something other than Nike present yourself to the costs associated establish superiority higher. Used as part of the organization ” pricing strategy is one of most! Choose different marketing strategies create campaigns that tend to appeal to a wide reach to different consumers.! For safety than its competitors similar in form and function to the costs associated with the vision you for! To its environment a strategy that is hugely successful through user convenience, company. Neighborhood market stores college students and families driver of failure is the of... For safety than its competitors have cheaper candy, they are ; Broad differentiation strategy two-fold! To produce high quality products that meet customer expectations their offerings the history of Apple that has led its! Networks of suppliers differentiation strategy examples manufacturers who can provide high quality sports materials and customers have multiple options lowest. The airline are high and offer lower profit margins how it positions itself in to... Reset instructions will be willing to pay higher prices either determine to offer the lowest,! Product to appropriate target groups heavily to your E-mail that Branson ’ product. Stocked and prices low through their business model a single product company offered! Socks as a leading brand for athletes, customers are compelled to their. With the most comfortable and visually stunning decor in all of central Paris book, `` competitive:! Can all provide additional ways for a new company may be a company has not changed business. Model is offering inexpensive fares, full service flights and outstanding customer service that may.
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