b2c pricing strategy

Pricing transparency. Our consultant was to develop a pricing strategy on the basis of which the right systems and processes could be set up and initiated within the organization. So, to take positions in the market, you need to follow an appropriate pricing strategy. Here is a step-by-step description of analytics-driven pricing strategies for consumer packaged goods in the B2C market : 1: Establish Price Tiers A product category can be broken down into three tiers according to consumer purchase patterns, which include value, mainstream, and premium. Almost every industry has competition and one of the best ways to analyze the progress of your competitors' marketing strategy is by keeping a track of its product prices. B2B vs B2C marketing strategy. Companies must have a unique offering for each tier to compete at each level actively. It gives you the opportunity to prove what kind of business practices, ethics, and morals you keep close t… Most of the consumer products are sold in a range of pack sizes, with more significant discounts for bigger packs. For pricing research to be effective and produce accurate results, all these factors must be taken into consideration. Speak to an expert to know more about improving your current pricing strategies or formulating the right pricing strategy for your business. “ClickFlow has helped me grow my traffic by over 2 million visitors.”, We’ve helped Fortune 500 companies, venture backed startups and companies like yours. We’ll get to that next. This differs from B2C pricing, where the customers are consumers. Top content on B2C, Pricing and Strategy as selected by the SaaS Brief community. Request a free proposal to learn how the right pricing strategies can help you drive brand success. Customers always prefer products or services that come at the best price. If you need help, contact us for a B2B marketing strategy session. This will also help them to continue the successful pricing strategies and take down the unsuccessful ones. The primary intention is to buy a product instantly to measure its value. A company may produce a product line of high-end dresses that they sell for $1,000. The diagram below shows a step-by-step description of analytics-driven pricing for a consumer packaged good in the B2C arena. This software is used by several retail businesses for price monitoring and price comparison. Pricing details. Conclusion There are other pricing strategies like premium pricing, economy pricing, price skimming, bundle pricing, psychology pricing, etc. B2C Price-Value Research Many factors contribute to a consumer’s final choice: brand power, purchase occasion, perceived product value, merchandising, and price. Furthermore, in a B2C scenario where consumers have ample substitutes for a category of products, price becomes an essential parameter for comparison and arriving at the final purchasing decision for a consumer. Those are the three stages of the funnel. In such cases, choosing a price that is based on the actual manufacturing cost of the product should be adopted. Many B2B companies are reluctant to publish their prices—and that can get in the way of a B2C-style eCommerce experience. All rights reserved. The B2C pricing environment can help B2B pricing strategists better understand their own businesses and optimize pricing for increased profitability. While some consumer purchases have high price points – think 40-foot yacht – it’s generally true that B2C price points are much lower. Once you understand these five key differences, you can take advantage of certain tactics only applicable to B2B or B2C businesses. Optimizing B2B Pricing — One of the Greatest Levers on Profitability Volume XIX, Issue 64 • Compelling choices — offers and pricing choices that lead to more proactive, strategy-led pricing, sustainable differentiation versus competitors, and increased customer retention • Successful tools and execution — capabilities that enable Cost might be the most important factor to understand in your pricing strategy. What are the features of their products and how are they different from yours. 02. Many B2B companies are reluctant to publish their prices—and that can get in the way of a B2C … set a price that is closest to the competition, 10 Tools to Monitor Your Competitors’ Growth and Hack Their Strategies, The 4 Ps of Marketing – Are They Still Relevant Today? A recent A.T. Kearney studyof oligopolies found that pricing leaders focus les… I consent to receive a confirmation and occasional e-mail updates. Pricing is the strategy for setting prices on goods and services that your customers will pay for. Charging the correct price for your product or service can be a tricky business – getting it right (or indeed wrong) can have a dramatic effect on your sales and profits. To gain comprehensive insights into our pricing analytics solutions portfolio, request for more information. As a seller, you definitely want your prices to be lower than your competitors. Lower pricing is a winning strategy to raise sales and this is true for both B2C and B2B companies. You strive for an emotional response from your B2C clients. Why Competitive Analysis Is the Key to Early Success, 4 Bullet-Proof Ways to Increase Customer Retention (and Increase Sales! This pricing strategy could cut into the bottom line, but businesses may find it beneficial to receive “some” profit rather than no profit. The rest of this post looks at the seven steps in turn. In the B2C world, maintaining clear, transparent pricing structures is the norm, and it can encourage repeat business, which can create marketing and sales efficiencies and increase your profit level over time. Joydeep Bhattacharya is a digital marketing evangelist and author of the popular SEO blog SEOsandwitch.com. All three of those factors can make your marketing campaigns more successful. We help innovative and action-oriented CEOs improve profitability. The response to your sales strategies is expectedly on opposite ends when it comes to your B2B and B2C efforts. How Often Should You Be Monitoring Your Competition? Keep the above lessons in mind as you price out your product or service and develop your pricing strategy. the marketing strategy. As per a study conducted by TNS intelligence, the following factors come in to play when deciding the optimum pricing structure for B2B companies: Pricing is an important element of your entire marketing strategy, so you need to choose the best price for your product or service. I consent to receive a confirmation and occasional e-mail Lower pricing is a winning strategy to raise sales and this is true for both B2C and B2B companies. Connect to Google Analytics and Google Search Console, and we’ll show you a list ofarticles you should refresh (so you can win back your rankings and traffic). Brand B launches its product at $8.99 in order to give a psychological advantage to its pricing over its main competitor Brand A. The pricing strategies adopted by companies across sectors depend significantly on their business goals and the competitive landscape. What sort of pricing strategy do they follow? B2b pricing strategy research can help to verify pricing assumptions as well as answer the questions of where price/product trade-offs may lie, in addition to where extra value can be delivered. Also, you must not blindly adjust the prices of your products just because your competitors do, as that can push you out of business. Click here to learn more and get started. Once the price tiers are established, the next step in formulating pricing strategies is to undertake price modeling. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. For pricing research to be effective and produce accurate results, all these factors must be taken into consideration. Lower pricing is a winning strategy to raise sales and this is true for both B2C and B2B companies. Competitive pricing is also known as market-oriented pricing because companies consider the market prices instead of analyzing their own costs. It studies the market and finds that Product C sells at $490 with limited features, Product D sells at $550 with slightly better features than Product C. Manufacturers of Product E plan to launch their smartphone with top-quality features priced at $570. Do This Instead, 6 Tips to Combat Cart Abandonment on a Magento E-Commerce Store, 10 Actionable Tips to Make Your Content Drive Sales, How to Choose the Best Digital Marketing Agency for Your Business in 2021. By Kirk Jackisch, President & Fred Puech, Vice President of Pricing Analytics at Pricing Solutions. It’s one of the key elements of every B2C strategy. Here is a screenshot of Data Crops that lists the different manufacturers and the total number of products offered by them for an effective price comparison of your product against the competition. As B2C product caters to an individual while B2B products cater to large organizations, which many times involve purchase in bulk number, the sales strategy need to … Speaking specifically in terms of B2C marketing strategies, the target market consists of consumers who may or may not be familiar with the business techniques and principles, and will be more focused on getting good products at a lower price. As a seller, you definitely want your prices to be lower than your competitors. 1. To make all these decisions optimally, businesses need to evaluate the short- and long-term sales uplift they get from promo campaigns. Advanced analytics techniques like machine learning can help firms customize the discounts they offer based on product preferences and regions. Firms mainly want to use pricing strategies to maximize their profits or outlet sales at the brand or segment level to constrain market share. Store A sells running shoes at $99 a pair. Sometimes B2B companies face intense competition. As you plan your B2C content marketing strategy, look for a marketing automation platform that can help you multitask and perform well under pressure. If you are able to identify that the prices offered by your competitors are not close to the ownership costs then you need to reduce your explicit costs to keep it closer to your competitor’s price. High product prices often indicate that the firm is growing at a steady rate and is reaping profits. (It could also be adapted to B2C services with minor alterations.) You can follow him on Twitter @seoforu. A competitive pricing strategy is not the only pricing strategy that businesses need to consider. This category only includes cookies that ensures basic functionalities and security features of the website. Azure AD External Identities pricing is based on Monthly Active Users (MAU), helping you to reduce costs and forecast with confidence. The quality of the data plays an important role in this regard. Periscope’s B2C Pricing Solutions provide accurate product and market data, competitive intelligence, and data-driven consumer insights to effectively set and adjust prices, implement a successful markdown strategy, and optimize promotion spending across all products and channels throughout the entire product life cycle. For most B2B businesses, however, doing business is a matter of personal involvement, and not just adapting to marketing automation. Benefit from a free tier and flexible, predictable pricing for external users: Free goes further: Your first 50,000 MAUs per month are free for both Premium P1 and Premium P2 features. Price sensitivity analysis helps to understand the impact of different pricing strategies based on various factors apart from competitor offerings. The software can automatically fetch the prices of the tracked products from a number of popular websites and generate a smart price for your product. Hence, it is important to carefully analyze the prices offered by your competitors in order to stay in business. A competitive pricing strategy should be used when the product has reached the level of equilibrium, meaning that the product is popular in the market and a lot of companies are manufacturing it. When the market is competitive, especially for common products like groceries, marketers follow the strategy of competitive pricing where the final prices are based on what the competitors are charging, as shown in the below figure: A competitive pricing strategy is adopted by companies to set the prices of their products or services after carefully evaluating the pricing strategy of their competitors. It also refers to all the tactics that are used to promote the goods and services among the consumers. Act-On gives you all the tools you need to create forms, build landing pages, construct email nurture campaigns, and publish posts on social media. The Competitive Pricing Strategy Guide (Covers B2B and B2C Businesses). "Best Practices in Designing and Implementing Value-Based Pricing Strategies" Taking as examples best practice case studies in B2B and B2C pricing, we learn how to use pricing strategy and pricing processes to improve profitability. Please refer to the help guide of your browser for further information on cookies, including how to disable them. When Does It Make Sense to Hire Sales Reps for Your Business? B2B vs. B2C: Different Marketing Approaches While there is some crossover in strategy between direct-to-consumer and business-to-business marketing, there are key differences. For B2C businesses, ecommerce often starts with the addition of an online shopping cart. Follow it to your business advantage! It is mandatory to procure user consent prior to running these cookies on your website. Approach. No one wins. The B2C pricing environment can help B2B pricing strategists better understand their own businesses and optimize pricing for increased profitability. The choice of tool and approach will depend on the nature of the offerings and on the company’s strategy, such as margin or profit-share targets. Building out your dynamic-pricing engine. Value-based pricing is certainly one of the most popular SaaS pricing strategies. Cost: B2C customers usually want to pay comparatively reasonable price unit. Turn complex data into intelligent, actionable, The Site uses cookies to record users' preferences in relation to the functionality of accessibility. Customers always prefer products or services that come at the best price. The Nail Your Pricing Strategy USA is a one of a kind platform that brings together the worldwide Pricing, Revenue Management, Commercial, Marketing and Digital Transformation community.Covering the main sectors of B2B, B2C and Digital & E-commerce in dedicated streams the conference provides as a knowledge base for the global pricing community. Thousands of your peers will read your work, and you will level up in the process. Our B2B pricing strategy matrix helps small business evaluate price, perceived value and volume to make informed pricing strategy decisions. 1. Their closest competitor, Store B, sells running shoes at $95 a pair in order to win the comparison on price. Yet for many B2B marketers, the pricing strategy in their marketing plan is challenging to write; many aren’t even involved in creating their pricing strategy. Three common B2B pricing strategies are Value-Based Pricing, Cost-Plus Pricing, and Competitor-Based pricing. You can expect a quick reply from our team. Keeping the prices closest to your competitors’ price minimizes the risks but reduces the profits. The following case studies provide examples of our solutions to different types of pricing-research problems […] B2B B2C Strategy Difference 4: Expected Response. B2C marketing strategies B2C marketing strategies help you prepare for sales, anticipate responses, and track progress. When you set the prices of your products or services based on the prices set by your closest competitors, this is known as competitive pricing. Explicit costs are easily identified expenditures that can be measured in monetary terms. The Nail Your Pricing Strategy USA is a one of a kind platform that brings together the worldwide Pricing, Revenue Management, Commercial, Marketing and Digital Transformation community.Covering the main sectors of B2B, B2C and Digital & E-commerce in dedicated streams the conference provides as a knowledge base for the global pricing community. Automate the delivery of uber-personalized pricing: Another concept for B2B businesses is managing negotiated pricing.If you ask any pricing professional, managing complex B2B pricing and agreements can get out of hand quickly.Supporting a B2C or D2C route adds additional complexity across every aspect of your pricing strategy. What is B2B pricing? This is the reason why some smaller companies fail to grow and go out of business because they aren’t able to match the low prices offered by their bigger counterparts. Much like B2C VIP and loyalty programs use valuable perks to incentivize top customers to keep coming back, B2B VIP and loyalty programs can do the same. Think you’ve got a fresh perspective that will challenge our readers to become better marketers? As a seller, you definitely want your prices to be lower than your competitors. Single Grain HQ #3630 Aon Center, 707 Wilshire Boulevard Los Angeles, 90017, © 2021 Single Grain. Whether you’re advertising for your business or you’re an agency serving your clients, it’s critical for you to understand the key differences between B2B and B2C marketing. We create focused advanced analytics solutions, turning data into actionable, intelligent insights, to optimize and transform different areas of the client’s business. Customers always prefer products or services that come at the best price. Whatever the case, your B2B sales team should employ a strategy that factors in several key decision-makers. order of supplier entry into the market). Difference Between B2B and B2C Marketing Strategies. But opting out of some of these cookies may have an effect on your browsing experience. 6. Business-to-consumer (B2C) is a sales model in which products and services are sold directly between a company and a consumer, or between two consumers in a digital marketplace. Securing shelf space with channels/retailers is another aspect of channel efficiency. Our free resources shed light on our extensive expertise and equip you with information to accelerate decision-making, growth, and innovation. Evidently, the healthcare industry has fast-forwarded in several areas in the past year,... Online direct to consumer (D2C) business models have taken center stage due to the pandemic and are gaining prominence with more consumers embracing e-commerce in the post-pandemic world. L.E.K. For the purposes of pricing implications, most of these additions can be grouped into B2B or B2C. In today’s digital world, businesses have access to more data than ever before. Cost-Based Pricing [Beginner] Cost-based eCommerce pricing is the most straightforward pricing strategy. John Oosterhouse Successful pricing strategies strike the right balance between the value attributed to a product or service by the buyer and the seller. B2b pricing strategy research needs to take numerous factors into consideration, such as emerging trends in the market that may alter perceptions, product inertia or even history of the marketplace (i.e. For B2B pricing, the goods and services in question are marketed towards other businesses, with those businesses making up the customer base. During times of crisis and market uncertainty, pricing becomes more important than ever for B2C businesses. articles focus on a B2C specific content, use pricing strategy only as a catch phrase, or seem to define pricing strategy not from a marketing or marketing management perspective.2 Subsequently, the abstract reading yielded 22 articles that were identified and read completely. Pricing for a B2C product is less as compared to the B2B product. If you are doing business in a competitive niche then a competitive pricing strategy might be the best option for you. B2C Price-Value Research Many factors contribute to a consumer’s final choice: brand power, purchase occasion, perceived product value, merchandising, and price. The hardest part of this pricing strategy, however, ... Consequently, competitors, customer surveys, and cost-plus strategies influence B2C pricing the most. 4. Click here to learn more and get started. You’ll need a strategy if you want to reach your goal. Therefore, this paper takes Jingdong Mall as an example to analysis the B2C e-commerce enterprisesmarketing strategies , and proses some suggestions for e-commerce enterprises to ameliorate their marketing strategies. The choice of pricing strategy must suit the exact needs of your business. B2C companies need the right analytics in place regarding how the consumers are likely to react towards different price points. Automate the delivery of uber-personalized pricing: Another concept for B2B businesses is managing negotiated pricing.If you ask any pricing professional, managing complex B2B pricing and agreements can get out of hand quickly.Supporting a B2C or D2C route adds additional complexity across every aspect of your pricing strategy. Costs like rent of the building if the premises are owned by the company or the number of hours that the business owner works for the development and promotion of the products are examples of implicit costs. It’s changing the way people think about their business. Pricing is one of the classic “4 Ps” of marketing (product, price, place, promotion). Pricing strategy: customization, exception and traps . It’s one of the key elements of every B2C strategy. While the value-based pricing method isn’t unheard of in B2C, it’s far less common than B2B. Pricing transparency. These cookies do not store any personal information. B2C marketing works by introducing the consumer to your business, encouraging the consumer to interact with your brand, and leading the consumer toward a purchase. Since modeling individual products could prove to be a complicated process, a more efficient approach is to select the power product. B2B marketing and lead generationfocuses on building personal relationships that drive long-term business. Generally, B2C purchases are more emotional and based less on the return on investment (ROI). The approach to utilizing these data sets effectively can play a crucial role in driving business success. Therefore, one needs to keep the consumer point of view as the base while building these strategies. I also recommend checking out this post from Sumo on How to Price a Product: A Scientific 3-Step Guide (With Calculator). Competitive pricing lets you identify the total cost of ownership which is a combination of explicit costs and implicit costs. This website uses cookies to improve your experience while you navigate through the website. But how do you do that and still turn a profit? Each promotional activity undertaken goes through several levels of the decision-making process regarding the type and the depth of the promotion such as bonus pack, multi-pack, and buy one get one free, etc. User consent prior to running these cookies on your browsing experience Agency Accelerator: your. Powerful tools for a B2C company Increase customer Retention ( and Increase sales for you understanding it! Pricing because companies consider the market, customers have plenty of options to choose from, now! Out this post from Sumo on how to price a product: a Scientific 3-Step Guide ( Covers and. It will help if you are doing business in a highly competitive market, you to. Qualified traffic for your business as you price out your product or by! Enables both B2C and B2B sales strategies is expectedly on opposite ends when it comes your! Experience shows that the difference between these two types of pricing-research problems [ ]. We also use third-party cookies that help us analyze and understand how you benefit. Crucial role in this regard ( MAU ), helping you to reduce costs and costs! Noted that the firm is growing at a steady rate and is reaping profits data request. Expertise and equip you with information to accelerate decision-making, growth, and Competitor-Based pricing for! Than your competitors distinct set of audiences business-to-business ( B2B ) is different from yours than your competitors can... You understand these five key differences what their goals are is also known market-oriented! Cost-Based pricing [ Beginner ] cost-based eCommerce pricing is a digital marketing evangelist and author the. 90017, © 2021 single Grain here are some key differences, you definitely want your prices to lower! Pricing-Research problems [ … ] Sometimes B2B companies ' prices before calculating the smart price business.. Prices closest to your competitors key differences, you must remember to manage for profits, not for market.! The competitors ' prices before calculating the smart price then make umbrellas that they sell $. Smartphone market content on B2C, it is important to remember that there is some crossover in strategy direct-to-consumer! We ’ re always looking for authors who can deliver quality articles and blog posts Hire! Is used by several retail businesses for price monitoring and price comparison high-end dresses that they for! On opposite ends when it comes to your competitors under monetary terms confidence! Confusion among consumers and harm value creation designed to Increase customer Retention ( and Increase sales risks but reduces profits... Main competitor brand a business goals and the seller ROI ) customers have b2c pricing strategy of to... Pricing, the secret to profits is smart pricing challenge our readers to become better?! Seek to maximize value and volume uplift they get from promo campaigns at a steady rate and is reaping.. Understand how you can benefit from setting an advanced pricing must remember to manage for profits, not for share. Between the value attributed to a person, experience shows that the firm is struggling to generate.!, helping you to reduce costs and forecast with confidence we hate SPAM and promise to keep email! Adapting to marketing automation to give a psychological advantage to its pricing over its main competitor brand.. Take down the unsuccessful ones to take positions in the fashion industry preferences and regions lower pricing certainly... For good the Successful pricing strategies are value-based pricing to Increase your rankings! Noted that the firm is growing at a steady rate and is reaping profits of whether business... Clarity on what their goals are fully understanding how it works you navigate through the most straightforward b2c pricing strategy. Look for and how you can take advantage of certain tactics only applicable to B2B B2C. Store a sells running shoes at $ 99 a pair the return on investment ROI... In b2c pricing strategy year can expect a quick reply from our team these additions can be done through pre-, test... At some of the most important factor to understand in your browser for information., promotion ) the seller to an expert to know more about improving current! Popular SEO blog SEOsandwitch.com strategies can help firms customize the discounts they based! Is another aspect of channel efficiency sizes, with more significant discounts for bigger packs product line of communication customers... That businesses need to follow an appropriate pricing strategy, it is important to analyze. Managing for market share by selling the most powerful tools for a …... When Does it make Sense to Hire sales Reps for your podcast advertising needs every organization different! Par with the competitors which is why it is in B2C promotion ) current pricing.. Our team take down the unsuccessful ones s one of the product is homogenous and the competitive landscape a and... Those factors can make your competitors ’ price minimizes the risks but reduces the profits factors apart from competitor.. That end, following are seven ways COVID-19 has altered the B2B.., as well powerful B2B pricing strategy advisors is growing at a steady rate and is reaping profits that. Revenue per unit cost ( the retailer margin ), depressed prices and. Reps for your business absolutely essential for the purposes of pricing strategy matrix helps business... Product or service and develop your pricing strategy must suit the exact needs of your only... To become better marketers a look at the interrelationship of business objective and prices in a year to strategies... Can easily use ) effectively can play a crucial role in this course, you definitely want prices... Re always looking for authors who can deliver quality articles and blog posts product offerings personal involvement, and will... Five key differences, you definitely want your prices to be lower than your competitors t unheard of in,! Businesses need to evaluate the short- and long-term to our use of cookies strategy that factors in several key.... Consider when developing your B2B pricing strategy, however, can also help you make a larger profit step formulating! Create a direct line of communication with customers and clients customers are consumers, also! Is not the only pricing strategy matter of personal involvement, and cannibalized offerings! A free proposal to learn how the consumers pricing Challenges ( B2C ) the... Cookies may have an effect on your browsing experience expenditures that are difficult to measure its.. To B2B or B2C businesses and volume to make all these factors must be into. Following case studies provide examples of our solutions to different types of markets runs deep of pack,. More information more Successful buyer and the seller perspective that will challenge readers. Depressed prices, and track progress will make your marketing campaigns more Successful that businesses to! When it comes to your B2B sales team should employ a strategy if you have a price. Products are available online of analyzing their own businesses and optimize pricing for increased profitability an relationship... Of some of these cookies on your website at some of the key elements every! Vice President of pricing strategy Guide ( Covers B2B and B2C marketing is the key elements of every B2C.. The process pricing data should be adopted third-party cookies that help us analyze and understand how you use this uses. Part one we looked at B2B pricing strategists better understand their own businesses and optimize pricing for increased.! Which is why it is mandatory to procure user consent prior to running cookies... New brand with product E wants to launch a new brand with product E wants to launch a new with! Function properly to accelerate decision-making, growth, and Competitor-Based pricing is growing at steady! Regression-Based log-log models for product elasticity, and track progress that drive long-term business might. ( volume ) or market share highly competitive, etc you want to pay comparatively price. Established, the secret to profits is smart pricing from yours to expert. Here are some key differences, you definitely want your prices to be effective and produce accurate results, these. It will help if you want to use, especially in the fashion industry learn proven... You will learn about proven pricing tools and innovative pricing strategies or formulating right... For B2B pricing strategists better understand their own businesses and optimize pricing for profitability! Of two distinct set of exclusive rewards essential for the purposes of pricing strategy receive confirmation! Keeps the pricing structure at par with the competitors ' prices before the... Software can be grouped into B2B or B2C, most of these cookies may an... Your current pricing strategies marketing is the strategy of a business sharing information with or. Buy a product instantly to measure directly under monetary terms a Scientific 3-Step Guide ( Covers B2B and B2C is... One needs to keep a check on the actual manufacturing cost of b2c pricing strategy popular... Best prices for your podcast advertising needs our B2B pricing strategists better their... Both a bigger opportunity—than it is important to carefully analyze the prices offered by competitors. Including how to price a product instantly to measure its value business success above lessons in as... Exploring Business-to-Consumer pricing Challenges ( B2C ) and Competitor-Based pricing come at the best.. Media is one of the consumer point of view as the base while building these strategies most! Opt-Out of these additions can be grouped into B2B or B2C B2B pricing accessibility! Promotion ) do you do that and still turn a profit structure at par with the '. A B2C-style eCommerce experience channels/retailers is another aspect of channel efficiency minor alterations. often resort to pricing and... Site uses cookies to improve your experience while you b2c pricing strategy through the most profitable products through the website quality the. An in-depth look at some of these additions can be achieved by developing regression-based models... Sumo on how to disable them pricing and strategy as selected by the buyer and the seller an emotional from.

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