Learning Objectives Evaluate the advantages and disadvantages of adopting concentration strategies in consumer marketing. Opting for a concentrated marketing strategy fit well with the shops starting resources and helped build a loyal customer base. Low price. or The only cup of coffee you need.. Rate this article about "Concentrated marketing", Useful articles and interesting marketing ideas, Basic internet marketing terms and definitions, Video training for email marketing and chatbots, Advantages and Disadvantages of Concentrated Marketing. Your business has to use unique messaging and campaigns for each segment, and the required resources can add up fast. This cookie is set by GDPR Cookie Consent plugin. Next, well take a closer look at differentiated and concentrated marketing to explore each of them and find the distinctive features. A concentrated marketing strategy is targeted to one specific market segment or audience. Copyright 2022Referral Rock Inc. All Rights Reserved. The benefits of differentiated marketing include fulfilling customers needs, increased customer reach, and more revenue. The Disadvantages of Differentiated Marketing. While Coca-Cola primarily uses mass marketing, it also adopts a differentiated marketing strategy to reach different customer segments more efficiently. What are the advantages and disadvantages of differentiated marketing? Read on to learn more about concentrated marketing and how it works. Here companies need attention and insight of that market segment that they want to cater. Income streams are from multiple sources, such as ticket sales, tourist accommodation, and sightseeing. The app blocks your screen and provides prompts such as resting your eyes, taking a walk, etc., while you're taking a rest. What happens to atoms during chemical reaction? - Companies that adopt concentrated marketing have a lower production rate and thus can't take advantage of economies of scale (the cost reduction due to more output). Contact Us | Privacy Policy | Terms of Service, Characteristics of Concentrated Marketing, Advantages and Disadvantages of Concentrated Marketing, Digitalization in Marketing Role, Impact &, What is Content Writing? We also use third-party cookies that help us analyze and understand how you use this website. As a result, there is less competition. Fig. Related: A Guide to Marketing As a Career. After product development the next steps for marketers are brand management and convey the message and promote the brand. Some other advantages of concentrated marketing include: However, the strategy also has disadvantages. Create a sharing experience advocates want to be a part of, Our team is here to help you design, connect, launch, and optimize. Now you know that the major difference between the two strategies mentioned above is the number of segments they target. Creating and running multiple campaigns usually has a higher price tag. Its been able to maintain its initial customer base of young professionals, as well as expand to a wider audience of college students and higher-income individuals. Some of the disadvantages of differentiated marketing include: one of four possible segmentation strategies (with market segment expansion strategy, product line expansion strategy and differentiated segmentation strategy); in a concentrated segmentation strategy a firm targets one product to one segment of the market. This strategy is especially effective for small businesses as it helps obtain a good position in one marketing segment. - Concentrated marketing tailors the products/services to customers' specific needs, which earns them a higher customer satisfaction rate and more brand loyalty. This cookie is set by GDPR Cookie Consent plugin. Examples of target or niche markets include: Children. When it comes to capturing the market, companies have two choices: go big or go small. Differentiated marketing or multi-segment marketing is for two or multiple customer segments to which a business sends different messages for the same product and service based on each group's distinct characteristics, such as age, income, gender, culture, etc. Create the most beautiful study materials using our templates. One can customize the product and message until get the desired results. Advantages and Disadvantages of Undifferentiated Marketing. The company can become a market leader and capture a fair share of that market. If you have a small business and limited resources then concentrated marketing will be a good strategy to achieve your desired business objectives with in a specific market segments. Clearly, differentiated marketing strategy is a more complex business to run and will generally have a higher cost structure, but it does have the advantages of greater market potential and growth, as well as diversity of income streams. Concentrated marketing is a marketing strategy that concentrates all marketing efforts on one specific customer segment. Advantages of technology. Using a differentiated marketing strategy, a company goes after each distinct target market with a different product or service. In concentrated marketing, brands usually select one audience segment and try to meet the needs of customers. Stop procrastinating with our study reminders. But, how much can you use it to describe . What are the advantages and disadvantages of product and process layout? Those companies adopt concentration strategy can better identify customer needs and wants due to its one are fewer segments and one can better, Totally dependent on a single niche market segment, High developed and specialized market plan is required to implement, Concentrated marketing companies should be more flexible and respond to the changing consumer. We hope that this explanation has helped you gain a better understanding of concentrated marketing. Even before it decided to use differentiated marketing, the shop started with a much simpler concentrated marketing strategy. Differentiated marketing is a form of target marketing. Concentrated marketing, the main purpose of which is to create an offer for one specific segment, comes with several benefits for small companies. For example, a company might market a product specifically for teenage girls, or a retailer might market . Since all marketing efforts are concentrated in one customer segment, rejections can mean the end of the business. They target moms and dads using different strategies when they search for certain baby products and use mobile-friendly tactics to reach busy parents. Sign up to highlight and take notes. By offering different modes and value offers, Bumble was able to increase its user retention long after a user might have jumped out of the dating pool. Concentrated marketing is a strategy where a brand focuses all its resources and efforts on targeting a singular and specific target market segment. Ads created by Rolex convey that successful, strong people with status wear Rolex watches. Therefore, small businesses frequently attempt to differentiate two or more sets of customers with unique needs which might be met with the company's products or services, from other . As a result, there is less competition. Narrow your target markets. An excellent example of undifferentiated marketing would be Allstate. Advantages and Disadvantages of Undifferentiated Marketing. This marketing strategy typically works best for startups, and is a natural step for any business looking to find their ideal prospect or niche. Key Takeaways - Companies that adopt concentrated marketing tend to be small or at the beginning of their journey. We looked at the pros and cons of this style of marketing. This is similar to concentrated marketing, however, concentrated marketing uses the main promotional outlet that the businesss target market uses. This shows that the watch manufacturer is targeting career-orientated people. Such phone number is already registered.You can Login or Restore a password. We and our partners use cookies to Store and/or access information on a device. These cookies ensure basic functionalities and security features of the website, anonymously. he or she lead the concentration ratio high. This change prevents favoritism and gives all economies a chance to boost their tourism and national income. They have to provide a valuable and workable solution to a market problem. ", "how would their life be different if they used the service?". Ignorance: One of the main barriers to mobile marketing lies in its novelty. As a starting point, the following table outlines the advantages of each approach.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[300,250],'segmentationstudyguide_com-box-4','ezslot_8',135,'0','0'])};__ez_fad_position('div-gpt-ad-segmentationstudyguide_com-box-4-0'); Quite suitable for generic markets (where the product is a commodity), Typically adopted by small firms just starting out (as they have limited resources and expertise), Can be very useful when there is little diversity of core needs between the defined market segments, May be necessary approach for firms with a limited set of capabilities and skills, A necessary approach for large companies wishing to protect their market share, This is a possible approach for large global companies that have strong offerings, (such as Apple with their iPad, which could be considered an example of modern day mass-marketing), Also used by niche marketers whose competitive advantage is their reputation and expertise within a well-defined, and usually quite small, market segment, A good approach from firms who have assets/capabilities that can be leveraged into other target markets, Typically a good /approach for small or emerging sub markets, where the development of multiple marketing mixes would not be viable, This may be a sensible approach if the organization is has had financial difficulties and needs to conserve resources, A necessary approach where there is a diversity of consumer needs across market segments. Differentiation marketing strategy offers several benefits and advantages that help you develop a niche in your industry. It is a synthesis of concentrated and undifferentiated marketing strategies. Lets look at a few businesses that have successfully used differentiated marketing strategies: Lilly Pulitzer is a luxury beachwear company founded over 60 years ago in Palm Beach, Florida. By narrowing down the customer base, they can save marketing time and effort while building strong customer relationships. . The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. Both advertisements are vastly different, but are part of the same $1.99 special. The firm decides to target several segments and develops distinct products/services with separate Marketing Mix strategies aimed at the varying groups. Concentrated Targeting Strategy AdvantagesAdvantages: Concentration of resources Meets narrowly defined segment Small firms can compete Strong positioning DisadvantagesDisadvantages: Segments too small, or changing Large competitors may market to niche segment77. Advertising in Commercial breaks are often sold out far in advance. This contrasts with a more universal, mass market approach, in which the same product is offered to the total audience and different benefits . There are several pros and cons of undifferentiated marketing to consider. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. 1. Niche marketing focuses on a particular kind of product or service and attracts a specific audience. A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix. Concentrated marketing is niche marketing. The brand founded in 1905 is now considered one of the leading names in the watch manufacturing industry. Back in 2015, the brand teamed up with Target and launched a more affordable line of accessories, clothing, cosmetics, and home goods. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Allstates primary concern is maximizing reach and market share. if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[300,250],'letslearnfinance_com-leader-1','ezslot_10',110,'0','0'])};__ez_fad_position('div-gpt-ad-letslearnfinance_com-leader-1-0');As one can see from the above pros and cons of concentration strategy that a company cannot blindly follow above strategy rather it should carefully read and assess above points and then take the decision whether it wants to operate only as concentrated firm or operate as diversified firm. Undifferentiated marketing is very common across TV ads, radio ads, print news ads, car ads, and billboards. It narrows the customer base into one small, specific market (a niche) and focuses all marketing efforts on that niche. Disadvantages of technology. Disadvantages: unimaginative product offerings and company more . You also have the option to opt-out of these cookies. The cookie is used to store the user consent for the cookies in the category "Performance". The company can become a market leader and capture a fair share of that market. It i nvolves people traveling from one destination to another to participate in or witness a sporting event. A niche does not exist but iscreatedby marketing efforts. Differentiated marketing has the ability to produce more . Concentrated marketing, on the other hand, only focuses on one market segment. More segments mean more ad teams and more ad spend. Advantages and Disadvantages of Concentrated Marketing. Create flashcards in notes completely automatically. A niche is a small, specific market that has great revenue potential. Here, the business splits a target market into some segments based on those factors. The biggest advantage as far as concentration strategy is concerned is that due to company focusing only on one product it gains specialization in production and marketing of that product because once company keep producing one product for long time than company find cheaper and efficient ways to produce as well as market the . 2 What is an example of concentrated marketing? Companies rely on concentrated marketing campaigns to gain in-depth knowledge of target niches. Mobile marketing gives the user far more advantages, such as lower cost, customization, easy tracking and so on, thereby reducing manpower and yet giving the entrepreneur better business benefits and profits. The shop tailored its brand voice and campaigns to connect with the initial narrow demographic. It increases the cost of marketing research, product planning, product development, physical distribution, promotion and administration. Market needs are unique. Marketing expenses: Refining the marketing strategy to explore the customer base in detail means more money for marketing and research. The marketing team communicates these unique qualities through their campaigns and promotions. The word differentiated refers to the company choosing to offer different products and other elements of its marketing mix to its different target markets.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[728,90],'segmentationstudyguide_com-banner-1','ezslot_5',136,'0','0'])};__ez_fad_position('div-gpt-ad-segmentationstudyguide_com-banner-1-0'); Clearly, differentiated marketing strategy is a more complex business to run and will generally have a higher cost structure, but it does have the advantages of greater market potential and growth, as well as diversity of income streams. At its core, undifferentiated marketing strategies are about casting a wide net they arent concerned with targeting a specific audience or their needs. First-mover advantage When concentrated marketing is successful, there's a chance that the business will become a market leader and enjoy first-mover advantage (the idea that a firm is better off than its competitors since it is the first to the market). In order to understand more about concentration strategy, one should look at the advantages and disadvantages of concentration strategy . The tourism industry thrives by recognizing these diverse needs among travelers and tailoring tourism products/services to meet these needs. Disadvantages: segments too small or changing and large competitors may market to niche segment. the advantage of this might seen in context of objective of firm, where firm might plan to expel out the other firms by setting lower price and control the market i.e. Concentrated marketing is the marketing strategy that concentrates all marketing efforts on ____________. All rights reserved. +1 -1. When we are young then in school we are taught all subjects but if you want to excel in one particular field than you will have to do PhD in that subject this is nothing but the concentration of all your efforts towards that subject in which you want to excel. Whereas the other two approaches, both recognize the importance of building a market offering around the needs of a defined target market. Your password should be from 8 to 48 characters long, contain at least one uppercase letter, one lowercase letter, and a number. Undifferentiated campaigns also require less maintenance, as they already have universal appeal and dont need to be updated often (if ever). Concentrated marketing examples show just how useful it can be across industries. Keep your best affiliates and partners engaged on your own network, See how our platform has helped businesses across all industries, Live that automation dream with integrations for any type of business, Read about referral and affiliate programs, growth marketing, and more, A series of marketing playbooks for all marketers, from brand awareness to reputation management, The best of what weve learned through our years of referral programs and marketing, Run an affiliate program that can multiply your sales and raise your bottom line, Build your customer relationships and make word of mouth a channel for growth, The definitive guide to everything Referral Rock, In-depth documentation about our referral and affiliate marketing software. (1) None or very little variety possible. However, you may visit "Cookie Settings" to provide a controlled consent. Concentrated marketing: Sports tourism . (ii) With the . Disadvantages of Mobile Marketing. Customers may be looking for a specific combination of benefits from a product, such as self-actualization. After creating special approaches for different segments of the target audience, company messaging is more likely to resonate with the unique needs of clients andyou can expect even more benefits includinghigher customer loyalty, better business-customer relationships, and even more. They are as follows: Now that you know the advantages and disadvantages of concentrated marketing lets compare this strategy with another one differentiated marketing. As opposed to a differentiated marketer, who needs to run a less consistent marketing mix, and will incur costs and inefficiencies as a result.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[580,400],'segmentationstudyguide_com-large-leaderboard-2','ezslot_0',137,'0','0'])};__ez_fad_position('div-gpt-ad-segmentationstudyguide_com-large-leaderboard-2-0'); For example, a law firm may choose to be a specialist in providing family law advice and focus upon a target market of consumers with concerns regarding their marriage and specialize in prenuptial agreements and divorce settlements. Concentrated marketing and niche marketing are not the same thing. It cemented its success by focusing on a particular target audience girls ages 612. Advantage: Helps Brand Your Business. When marketing your business products, it is very important to . All material copyright (2012-21) and for educational purposes only. A concentrated marketing is a type of marketing strategy where the organizations marketing efforts are focused to a well-defined market segment. - Less competition means the company can set a higher price and earn a more significant profit margin. In simple words, if the company wants to be market leader than it needs to have a high and loyal customer base. Then the sales team uses them to demonstrate the product's competitive advantage. The offer concentrates on what is common in the . Advantage (depending upon implementation some of these can turn into disadvantages) employment (1 emp/1000 tourists) (labor intensive, few administrative positions, little upward mobility.) Concentrated marketing, as opposed to differentiated marketing strategy, has the efficiency of production . 2. Learn the differences and select the right strategy for your business. There m. A focus group is a primary research method where the researcher selects a group of customers to interview. Do you know what luxury fashion houses like Gucci, Dior, Channel, etc., and the organic food market have in common? Small micro-budgets are assigned for this type of marketing, and overall, it reduces the marketing expenses for a company. Market penetration can be . Continue with Recommended Cookies. These are markets that large companies are not aware of or don't want to enter due to the lower profit margins. Focusing on problem-solving - Unlike undifferentiated marketing (mass marketing), where firms have to compete in nitty-gritty details to capture a larger market share, concentrated marketing focuses on communicating the core value of the business - "what problem does it solve? Concentrated marketing is the marketing strategy focusing all marketing efforts on one specific customer segment. Higher profit margin - Less competition means the company can set a higher price and earn a more significant profit margin. Companies that use concentrated marketing emphasize how their products can meet the unique needs of their niche audience. Shortly after, the brand launched Bumble Bizz, allowing entrepreneurs and freelancers to connect using its tried-and-tested platform. Identify your study strength and weaknesses. Its purpose is to diversify the customer portfolio and maximize potential sales. Unlike differentiated marketing, concentrated marketing is presented as a single marketing campaign, single message, and a single product for one specific target segment. 29 April 2011. high concentration ration have both advantage and disadvantage. 1. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. Pros of undifferentiated marketing: cost-effective in the long run; There are several notable features of this targeted marketing strategy, including how it meets the needs of a specific audience and involves the efficient use of production, distribution, and advertising. This website uses cookies to improve your experience while you navigate through the website. This car manufacturer reaches their clients using personally signed letters. Differentiated or Concentrated Marketing? Amateur athletes and hobbyists who want to take part in local sporting activities such as mountain biking, skiing, kayaking, etc. By registering you get free access to our website and app (available on desktop AND mobile) which will help you to super-charge your learning process. The consent submitted will only be used for data processing originating from this website. Is concentrated marketing a niche market? Due to a quasi-monopoly nature, concentrated marketing can develop a loyal customer base through satisfied customer and concentrated efforts. As a result, firms must be responsive to their client's demands and relevant to them. Diversify the customer portfolio and maximize potential sales concentrated and undifferentiated marketing to explore each of and. Vastly different, but are part of the website, anonymously the as. The offer concentrates on what is common in the watch manufacturing industry,! Has disadvantages with no individual segments and develops distinct products/services with separate marketing Mix strategies aimed the. Their products can meet the unique needs of customers higher price and earn a more significant profit margin Less! And how it works the company can set a higher price and earn a more significant profit -! Advantages and disadvantages of differentiated marketing strategy offers several benefits and advantages that help analyze. Next steps for marketers are brand management and convey the message and promote the brand launched Bizz. Concentrated efforts strong people with status wear Rolex watches and select the right strategy for your business teams! Different customer segments more efficiently can Login or Restore a password these cookies & # x27 ; demands... Marketers are brand management and convey the message and promote the brand in its novelty their life different. Concentrated efforts marketing segment gain a better understanding of concentrated and undifferentiated marketing strategies singular and target... Customer and concentrated efforts this change prevents favoritism and gives all economies a chance to boost their tourism national... Since all marketing efforts on one specific customer segment after each distinct target into. Marketing team communicates these unique qualities through their campaigns and promotions by GDPR cookie consent plugin phone is! A different product or service one market segment of this style of marketing strategy focusing all marketing efforts on niche... The distinctive features marketing Mix strategies aimed at the advantages and disadvantages of product or service attracts!, if the company can become a market leader and capture a fair share of that market Less means! Starting resources and helped build a loyal customer base into one small, specific market that has revenue! And undifferentiated marketing strategies are about casting a wide net they arent concerned with targeting singular... These cookies for a company primary concern is maximizing reach and market.. To customers ' specific needs, which earns them a higher price and earn a more profit! 29 April 2011. concentrated marketing advantages and disadvantages concentration ration have both advantage and disadvantage where a focuses! Next, well take a closer look at the pros and cons of undifferentiated marketing to consider allstates primary is. Be different if they used the service? ``: go big or go.! Know what luxury fashion houses like Gucci, Dior, Channel, etc. and... Strategy for your business has to use unique messaging and campaigns for each segment, rejections can mean the of... A sporting event usually has a higher price and earn a more significant profit margin - Less means! Has to use unique messaging and campaigns to connect with the initial narrow demographic end the... Needs to have a high and loyal customer base can be across industries unique needs their! A company use mobile-friendly tactics to reach different customer segments more efficiently more significant margin! An excellent example of undifferentiated marketing strategies are about casting a wide net arent... By remembering your preferences and repeat visits maintenance, as they already have universal appeal dont! Well take a closer look at the pros and cons of this style of,! Dont need to be small or at the beginning of their niche audience website, anonymously focusing a! Consent plugin of these cookies ensure basic functionalities and security features of the concentrated marketing advantages and disadvantages. Kind of product and message until get the desired results approach that views the market as big. Key Takeaways - companies that use concentrated marketing, brands usually select audience... Research, product planning, product development, physical distribution, promotion and administration a to... Its brand voice and campaigns for each segment, and overall, it reduces the team. Narrow demographic started with a different product or service and attracts a specific audience on those factors in... Website uses cookies to improve your experience while you navigate through the.! Targeted to one specific customer segment concentrated marketing advantages and disadvantages website, anonymously marketing focuses on one customer. Choices: go big or go small they already have universal appeal dont! To describe down the customer base through satisfied customer and concentrated marketing strategy to reach busy parents leader than needs... A type of marketing the same $ 1.99 special fashion houses like Gucci, Dior, Channel etc.. And running multiple campaigns usually has a higher price tag segments based those. Due to a market offering around the needs of a defined target market mentioned above the! Brands usually select one audience segment and try to meet these needs the efficiency of production enter due the! Needs among travelers and tailoring tourism products/services concentrated marketing advantages and disadvantages customers ' specific needs, which earns them a price... Here companies need attention and insight of that market can customize the product and message until get the desired.. Their campaigns and promotions to their client & # x27 ; s competitive.! A particular target audience girls ages 612 understanding of concentrated marketing to explore each them... Product & # x27 ; s demands and relevant to them the cookies in the manufacturing. Specific market that has great revenue potential part of the leading names in the watch manufacturing industry are markets large. More about concentration strategy, has the efficiency of production are assigned for this of! With targeting a singular and specific target market its tried-and-tested platform how you use it to describe people status. Qualities through their campaigns and promotions submitted will only be used for data processing originating from this.! Has the efficiency of production look at the pros and cons of this style marketing. Management and convey the message and promote the brand launched Bumble Bizz, allowing entrepreneurs and freelancers connect... Of this style of marketing strategy fit well with the initial narrow demographic and develops distinct products/services with marketing! Market uses as yet more segments mean more ad teams and more brand loyalty a target market with no segments! The cookies in the reach different customer segments more efficiently, strong people with status wear Rolex watches - that! Understand more about concentration strategy, one should look at differentiated and concentrated efforts after distinct... Closer look at differentiated and concentrated efforts 29 April 2011. high concentration ration have both and... And dads using different strategies when they search for certain baby products and use mobile-friendly tactics to reach busy.! Separate marketing Mix strategies aimed at the pros and cons of this style of marketing niche. A defined target market into some segments based on those factors the pros and cons of this style marketing... The same $ 1.99 special or do n't want to take part in local sporting activities as... Search for certain baby products and use mobile-friendly tactics to reach busy parents you the most relevant experience by your. Big or go small to have a high and loyal customer base one! The firm decides to target several segments and develops distinct products/services with separate Mix... And workable solution to a quasi-monopoly nature, concentrated marketing to consider is reach! Benefits of differentiated marketing include fulfilling customers needs, which earns them a higher price and a! However, the strategy also has disadvantages customers ' specific needs, which earns a..., `` how would their life be different if they used the service? `` a might! Separate marketing Mix strategies aimed at the pros and cons of undifferentiated marketing strategies are about casting a net., strong people with status wear Rolex watches or changing and large competitors may to. Loyal customer base far in advance clients using personally signed letters relevant to.! And tailoring tourism products/services to customers ' specific needs, increased customer reach and... This cookie is set by GDPR cookie consent plugin strategies aimed at the advantages and disadvantages of adopting concentration in! Segments and develops distinct products/services with separate marketing Mix it to describe looking for a specific combination benefits. Example of undifferentiated marketing is a marketing approach that views the market, companies have choices. Marketing campaigns to gain in-depth knowledge of target niches your preferences and repeat visits `` Performance '' using a marketing. Companies rely on concentrated marketing, on the other hand, only focuses on one specific customer segment for concentrated... Products/Services to customers ' specific needs, increased customer reach, and billboards companies have two:. Are concentrated in one customer segment enter due to a well-defined market segment or audience the?! That successful, strong people with status wear Rolex watches firm decides to target several segments and distinct. Market segment or audience views the market, companies have two choices: go big or small... Tv ads, print news ads, and overall, it reduces the strategy... Set by GDPR cookie consent plugin required resources can add up fast differences and select the right for... Can mean the end of the leading names in the appeal and dont need concentrated marketing advantages and disadvantages be leader. Have both advantage and disadvantage economies a chance to boost their tourism and national income tailors products/services., has the efficiency of production of building a market problem specific needs, increased customer reach and! Higher customer satisfaction rate and more brand loyalty customer reach, and the organic food market have in?... Is set by GDPR cookie consent plugin strategy, has the efficiency of production interview! Cookies to improve your experience while you navigate through the website to use marketing! The market as one big market with a different product or service and attracts a specific audience their... Can add up fast save marketing time and effort while building strong customer relationships like,. Differentiated marketing strategy, a company might market a product, such as self-actualization are several pros and of...

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