Consumer Behavior and Attitudes Towards Food Discount

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Table of Contents

Consumer Behavior and attitudes towards food discount retailing .......................... 2


Task 1.................................................................................................................................................... 2
1.1 Introduction .................................................................................................................................. 2
1.1 Primary and secondary data Collection ........................................................................................ 2
1.2 The survey methodology and sampling frame used ..................................................................... 3
1.3 Questionnaire Design of Consumer survey .................................................................................. 4

Task 2.................................................................................................................................................... 6
2.1 Summarizing data using representatives values........................................................................... 6
2.2 Analysis the result to valid conclusion .......................................................................................... 8
2.3 Measures of Dispersion analysis ................................................................................................... 9
2.4 Analysis of Correlation coefficient .............................................................................................. 11

Task 3.................................................................................................................................................. 13
3.1 Primary and Secondary data information Grapes ...................................................................... 13
3.2 Trend line spreadsheet grape to assist forecasting sales revenue ............................................. 16
3.3 Formal Business Report about WM marrisons Supermarkets.................................................... 16

Task 4.................................................................................................................................................. 18
4.1 Management information Processing tools for WM Marrisons plc ........................................... 18
4.2 Plan for activity and determination of critical path .................................................................... 19
4.3 Financial Tools for decision making ............................................................................................ 20

Conclusion ........................................................................................................................................ 21
Reference ......................................................................................................................................... 22

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Consumer Behavior and attitudes towards food discount retailing

Task 1
1.1 Introduction

To know about the Consumer behavior & attitudes is one of the inspiring and challenging
works in market studies that mainly focus on the purchasing, and using of the services.
Understanding the attitudes of consumer towards the specific products is a great challenge.
Consumer behavior is psychological processes in which consumers firstly recognize needs
then find way to solve the needs. To solve the needs consumers make purchase decisions and
make plans and try to implement those plans by Comprising number of shop or number of
product and finally purchase a product. In this research paper we will try to bring to light the
determinants of consumer behavior & attitudes regarding buying decision for discounting
food in WM Morrisions Supermarkets plc in brixton area in Greater London and we will
develop a model to understand the consumer relationship. So, we find the brixton area’s
consumers in greater London to analyze their shopping frequency for food discounting
different age, gender, occupations & income.

1.1Primary and secondary data Collection

To understand about the consumer behavior and attitudes towards food discount retailing we
have to be both primary and secondary forms of data and have to be give descriptions about
that data i.e. which process we obtain that data. We should need collect both qualitative and
quantities data to bring a conclusion.

Primary Data

For this survey we have collected primary data from the Greater London consumer of
supermarkets throw survey Questionnaire and data are collected by telephone and face to face
customer when they come to the supermarkets for buying something. From the supermarkets
customer list we direct phone to the customer and collect the data. Very few customers
disagree to give the information about their needs and attitudes. We collect information from
about 300 customers in brixton in Greater London who buy their daily needs foods and other
accessories from big supermarkets. For this type of consumer survey we also could another

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method to collect the primary data like Email survey, online survey but there are some
disadvantages thought it could be more cheaper way and there is a little chance to get the real
information about the consumer buying attitudes for discounting retailing.

Secondary data

Secondary data is a data that have already collected and analyzed by others or any
organizations and that are available. It may be published or unpublished data. If we use the
secondary data of our research it can give good guide lines how we should need to carry our
primary research. We take some information from different survey organization whose
recently survey about the Consumer behavior near the selected area of greater London.
Besides some of the data are collect form the National Statistics Annual Business Inquiry
(ONS, 2008) and some online journals, magazines and newspaper about the Consumer
behavior towards food discounting.
Another secondary data collection source is the given case in that assignment by reading the
case about the different supermarkets and their retailing situation. The use of secondary data
can be helpful in terms of cost efficiency (J devision, 2003) but to analyze the actual attitudes
of the consumer we have to focus more in the primary data that was collected directly phone
interview.

1.2 The survey methodology and sampling frame used

Here the collected Primary and secondary data have used in our survey that help us to find
out the expected result of consumer behavior. The study has integrated the collection of both
primary data and secondary data for a deeply inquiry. A questionnaire survey was carried out
by telephone to test the behavior and attitude of 300 consumers towards food discount
retailing from brixton in Greater London. A multistage plan was used in arranging the
sample. The supermarkets telephone book containing names and addresses of potential
customers were selected using systematic sampling procedure to take the phone interview.
The questionnaire included the questions about the attributes in deciding where to shop and
consumer’s beliefs about food discount shop and buying frequency in case of discount.
Data are collected in the form of questionnaire with the consumer’s age, gender, income and
frequency of shopping at discount food retailer, reason for using or not using discounting
food retailer, combination of shopping from food discounting and other retailers. The sample
included 300 consumers in different age range but over 18 years both men and women in

3
different occupation in brixton area of greater London. Summary statistics on sampled
consumer’s e.i. responded profile of consumer’s presented below table number 01.

Gender (in %)
Male 32.34
Female 67.46
Average age in years 49.15
Educational Level
Primary level 10.34
Secondary level 46.80
University or Higher education 42.86
Monthly income (in %)
Under £10,000 5.93
£10,000-£19,999 21.27
£20,000-£29,999 23.74
£30,000-£39,999 16.71
£40,000-£49,999 10.39
£50,000-£59,999 8.83
£60,000-£69,999 6.84
£70,000-£79,999 4.29
£80,000+ 2.00
Average monthly money spend in supermarket for buying food 2980.80

Table 1: Summary statistics of sampled consumers (N = 300)

1.3 Questionnaire Design of Consumer survey


The sample of questionnaire that was used on the collection of primary dada on Consumer
behavior and attitudes towards food discount retailing at WM morrison supermarket’s plc in
brixton area in greater London. If we would make a question that’s answer can given by the
consumer to their own words then it would be hard to answer and would not to be (J.
devision, 2003) possible to quantify the quantitive result of questionnaire. The result of that
questionnaire is collected from the brixton area’s consumer by telephone call and asking the
question’s individually.

4
The Design of the questionnaire

1. What’s your name? Ans: ……………………………………………


2. Gender
□ Male □ Female

3. How old you are?


□ 18-23 □ 24-29 □ 30-35 □ 36-41 □ 42-47 □ 48-53 □ 54-59

4. Your occupation?
□ Student □ Professional (non-student) □ Retired

5. Your Monthly income?


□ Under £10,000 □ £10,000-£19,999□ £20,000-£29,999 □ £30,000-£39,999
□ £40,000-£49,999 □ £50,000-£59,999□ £60,000-£69,999 □ £70,000-£79,999
□ £80,000+
6. Your Educational Level?
□ Primary level □ Secondary level □ University or Higher education

7. How far is the supermarket that you visit frequently, from your house?
□ less than 1 km □ 1 to 2 km □ 2 to 5 km □ more than 5 km

8. How often do you visit the supermarkets monthly?


□ Not even once □ 1 to 5 times □ 6 to 10 times □ more than 10 times

9. When you visit more supermarkets for buying food?


□ Discount time □ non-discount time □ any time

10. How often you visit supermarket when discount in on towards food items monthly?
□ not even once □ 1 to 5 times □ 5 to 10 times □ more than 10 times

11. When marrison supermarket plc make discount on then what supermarket you chose
for buying food items?
□ Marrison supermarket plc □ other supermarkets □ local markets

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Task 2
2.1 Summarizing data using representatives values
Table 2 shows that the age ranges in which the consumers visit the food discount
supermarkets more frequently ever before. Among the 300 consumer’s 165 consumers are
more interested to buy food from supermarkets at the time of discounting.

Table 2: Consumers age range whose visit more frequently at the time of discount

Age Range Number Percent


18-23 55 33.33 %
24-29 38 23.03 %
30-35 25 15.15 %
36-41 20 12.12 %
42-47 12 7.27 %
48-53 8 4.84 %
54-59 7 4.24 %
N= 165 100

It is evident that younger people are more likely to purchase from discounted supermarkets
than older ones.

Summarizing data by measurement tools:-


Age Range f X c.f d=X-A fd
18-23 55 20.5 55 -18 -990
24-29 38 26.5 93 -12 -456
30-35 25 32.5 118 -6 -150
36-41 20 38.5-A 138 0 0
42-47 12 44.5 150 6 72
48-53 8 50.5 158 12 96
54-59 7 56.5 165 18 126
N= 165 ∑fd= -1302

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∑ 𝑓𝑑 −1302
Mean = A+ = 38.5+ = 30.61
𝑁 165
𝑁 165
Median = Size of th observation = = 82.5 which lies in the 24 - 29 class
2 2
𝑁
−𝑐𝑓 82.5−55
2
Median = L+ × 𝑐 = 24+ × 6 = 28.34
𝑓 38
∆1 −5
Mode = L+ ×𝑐 = 24+ × 6 = 14
∆1+∆2 −5+8

Table 3: Monthly income whose visit more frequently supermarkets at the time of food
discount
Monthly income Number Percent
Under £10,000 30 18.18 %
£10,000-£19,999 35 21.21 %
£20,000-£29,999 22 13.33 %
£30,000-£39,999 31 18.79 %
40,000-£49,999 15 9.09 %
£50,000-£59,999 12 7.27 %
£60,000-£69,999 9 5.45 %
£70,000-£79,999 6 3.63 %
£80,000+ 5 3.03 %
N=165 100

Summarizing data by Measurement Tools:-


Monthly income f X c.f d=X-A fd
Under £10,000 30 4999.5 30 -40000 -1200000
£10,000-£19,999 35 14999.5 65 -30000 -1050000
£20,000-£29,999 22 24999.5 87 -20000 -440000
£30,000-£39,999 31 34999.5 118 -10000 -310000
40,000-£49,999 15 44999.5-A 133 0 0
£50,000-£59,999 12 54999.5 145 10000 120000

7
£60,000-£69,999 9 64999.5 154 20000 180000
£70,000-£79,999 6 74999.5 160 30000 180000
£80,000+ 5 84999.5 165 40000 200000
N=165 ∑fd=
-2320000

∑ 𝑓𝑑 −2320000
Mean = A+ = 44999.5+ = 30938.89
𝑁 165
𝑁 165
Median = Size of th observation = = 82.5 which lies in the 20000 - 29999
2 2

class
𝑁
−𝑐𝑓 82.5−65
2
Median = L+ × 𝑐 = 20000+ × 9999 = 27953.75
𝑓 22
∆1 −13
Mode = L+ ×𝑐 = 20000+ × 9999 = 25908.5
∆1+∆2 −13+9

2.2 Analysis the result to valid conclusion

Table 2 shows the findings of the brixton area’s supermarkets customers attitudes towards the
food discount retailing under the age difference among the 165 consumers’ whose trend to
visit more frequently food discount supermarkets. By measuring the data table by statistical
tools we found the attitudes of consumer are buying decision that affect by the age. The
younger consumer is more interested to buy discounting food product then the old consumer.
We get mean = 30.61 that indicate that the more interested consumer age level lies in the 30 –
35 level that is the younger consumer’s. And the median is = 28.34 and mode is = 14 so
young consumer trend is more than older consumer towards food discounting. If the
supermarkets want to catch the younger consumer they can make the discount food.

Table 3 shows the summary about the brixton area’s consumer behavior and attitudes whose
were visit more frequently to the food discount shop categorize by their monthly income.
Here we see that the low level monthly income consumer are more interested to visit food
discount supermarkets than the highly income consumer’s. Among the 165 consumers we get
the attitudes information by calculating statistical tools that is mean = 30938.89 and median
is = 27953.75 and mode is = 25908.5. That means the consumer’s whose monthly income lies

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30000 – 39999 level those consumer are most interested to buy discount food and to catch
this level of income consumer the supermarket should keep discount.

2.3 Measures of Dispersion analysis

Calculation of Quartile deviation of data table 1


Age Range f c.f
18-23 55 55
24-29 38 93
30-35 25 118
36-41 20 138
42-47 12 150
48-53 8 158
54-59 7 165
N= 165

𝑁 165
Q 1= Size of th observation = = 41.25 which lies in the 18 – 23
4 4

class level
𝑁
−𝑝𝑐𝑓 41.25−0
4
Q 1 = L+ ×𝑐 = 18+ ×6 = 22.5
𝑓 55
3𝑁 3×165
Q 3 = Size of th observation = = 123.75 which lies in the 36 –
4 4

41 class level
3𝑁
4
−𝑝𝑐𝑓 123.75−118
Q 3 = L+ ×𝑐 = 36+ ×6 = 37.73
𝑓 20
𝑄3 −𝑄1 37.73−22.5
Quartile Deviation = = = 7.61
2 2
𝑄3 −𝑄1 37.73−22.5 15.23
Coefficient of Quartile Deviation = = = = 0.253
𝑄3 +𝑄1 37.73+22.5 60.23

9
Calculation of Quartile deviation of data table 1

Monthly income f c.f


Under £10,000 30 30
£10,000-£19,999 35 65
£20,000-£29,999 22 87
£30,000-£39,999 31 118
40,000-£49,999 15 133
£50,000-£59,999 12 145
£60,000-£69,999 9 154
£70,000-£79,999 6 160
£80,000+ 5 165
N=165

𝑁 165
Q 1= Size of th observation = = 41.25 which lies in the 10000 –
4 4

19999 class level


𝑁
−𝑝𝑐𝑓 41.25−30
4
Q 1 = L+ ×𝑐 = 10000+ × 9999 = 13213.95
𝑓 35
3𝑁 3×165
Q 3 = Size of th observation = = 123.75 which lies in the
4 4

40000 – 49999 class level


3𝑁
4
−𝑝𝑐𝑓 123.75−118
Q 3 = L+ ×𝑐 = 40000+ × 9999 = 43832.95
𝑓 15
𝑄3 −𝑄1 43832.95−13213.95
Quartile Deviation = = = 7.61
2 2
𝑄3 −𝑄1 43832.95−13213.95
Coefficient of Quartile Deviation = = 43832.95+13213.95 =
𝑄3 +𝑄1
30619
= 0.537
57046.9

10
2.4 Analysis of Correlation coefficient

From the survey data we can get the following information about the buying behavior of
consumer. Monthly income of the consumer and the monthly total spend in the food discount
supermarket are given bellow

Month 1 2 3 4 5 6 7 8

Monthly 40 30 50 65 25 70 55 44

income

(£000)

monthly spend 20 25 15 10 22 15 20 23

in discount

shop (£000 )

Calculations:-
Month Monthly dx=X-A dx2 Monthly dy=Y-A dy2 dxdy
income spend
(£000) (£000)
X Y
1 40 -10 100 20 -2 4 20
2 30 -20 400 25 3 9 -30
3 50-A 0 0 15 -7 49 0
4 65 15 225 10 -12 144 -180
5 25 -25 625 22-A 0 0 0
6 70 20 400 15 -7 49 -140
7 55 5 25 20 -2 4 -10
8 44 -6 36 23 1 1 -6
∑dx = ∑dx2 = ∑dy = ∑dy2 = ∑dxdy =
-346
-21 1811 =-26 260

11
∑𝑑𝑥∑𝑑𝑦
∑𝑑𝑥𝑑𝑦−
𝑁
r= (∑𝑑𝑥)2 (∑𝑑𝑦)2
√{∑𝑑𝑥 2 − }− { ∑𝑑𝑦 2 − }
𝑁 𝑁

−21×−26
−346−
8
r= (−21)2 (−26)2
√{1811− }− { 260− }
8 8

−346−68.25
r= 441 676
√{1811− }− { 260− }
8 8

−414.25
r=
√{1811−55.13}− { 260−84.5}

−414.25
r=
√1755.87− 175.5
−414.25
r=
√1580.37
−414.25
r= 39.75

r = - 10.42

Here we see the correlation coefficient between monthly income and monthly spend in
discount shop, we get the coefficient result is negative that means the increase of monthly
income of the consumer decrease the monthly spend for the buying from discount
supermarkets. So if income increase then spends in discount food retailing decrease. So the
supermarkets should the focus on lower income consumer. They should target the lower
income people by keeping food discount to increase the sales volume monthly.

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Task 3
3.1 Primary and Secondary data information Grapes

From our questionnaire survey we get the primary data from 300 consumers from brixton’s
area of greater London. Among them maximum consumer’s are female.

Figure 1: Consumer Respondens Gender

32.34%

Male
67.46% Female

Figure 2: Consumer Respondens Education


level

Primary level
Secondary level
University and Higher Education

13
Now we present the grape of Consumer attitudes towards food discounting retailing at the
supermarkets in greater London brixton area among the 165 consumer’s out of 300. Among
the 300 consumer’s we found that 165 are interested in food discounting.

300 Consumer Visiting percentage

11.67%

Discount time
33.33% 55%
Non-discount time
Any timer

Figure 4: Consumer trend to visit different time

60

50

40

Discount Time
30
Non-discount Time
Any Time
20

10

0
18-23 24-29 30-35 36-41 42-47 48-53 54-59

Figure 3: Consumer buying attitudes of Supermarkets at different age level

14
40

35

30

25

20
Discount time
15
Non-discount time
10 any time
5

Figure 4: Consumer Attitudes at different time buying at different income level

By seeing this above grape we can conclude that among the 300 consumer’s 55 %
consumer’s most frequently visit the food discount time, 33.33 % consumer visit at the non-
discount time and 11.67 % consumer’s visit any time. Here we see that young consumer’s
visit more than older consumer in discount time. But in non-discount time meddle age
consumer visit more times and any time visiting consumer age level is almost same.

The monthly income level also influences the consumer’s attitudes towards food discounting
retailing from supermarkets. Here we see that the lower level consumer visit more time at
discount time and higher income consumer visit less frequently in discount time. In case of
non-discount time the higher income level consumer visit more than lower level income
consumer’s.

15
3.2 Trend line spreadsheet grape to assist forecasting sales revenue

30,000

25,000

20,000
Sales Revenue

WM Morrisons
15,000
Js Sainbury,s
LidI LTD
10,000
Alidi

5,000

0
2009 2010 2011 2012 2013 2014 2015 2016
Year

Figure 5: Sales Revenue forecasting

3.3 Formal Business Report about WM marrisons Supermarkets

Business Report
WM Marrisons Supermarkets plc, London
The Threat of Discounted food Retailer

Introduction
In the report Wm Marrisons supermarkets plc in greater London take a project about to know
about discounted food retailing. In this strategy of their business they collect information but
survey and different sources of the previous years. For the discount retailing marrisons has to
spend huge amount for satisfaction to the consumer. But the discount food retailing strategy
are not popular to the consumer it only varied for age level and income level of the
consumer’s. Another issue is the consumer want the quality food product than the cheaper
price. They want quality food and cheap food all together.

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Information Gathering
From the survey data we gather primary data and analyze those raw data by different
measurement tools of statistics like mean, median, mode, measurement of quartile, dispersion
and so on. We can now understand the consumer’s attitudes and behavior of greater London
whose are interested in buying food discount supermarkets. Among the 300 consumer’s only
165 are interested to buy only for their low income and mostly are younger of them. Another
45 % consumer are not interested to do that so the food discount can not affect more in food
selling of the supermarkets. When discount in not on, 45 % of consumer buy this type of food
so food discounts not the good strategy for the supermarkets.

Description
Non-discount
Among 300 Consumers Discount 165 135 %
Percentage 55% 45 %

Lower monthly income 70 % 30 %


Higher monthly income 40 % 60 %
Young consumer 55 % 45 %
Older consumer 40 % 60 %

Findings and Recommendation


From the analysis we get some important issue for the MW Marrisons supermarkets that’s are

 Marrisons should improve their food quality than food discounting strategy
 Consumer trends in the market are not only cheap food products but also quality
food.
 Those who are highly interested in discount food maximum of them are for their
lower income.
 Marrisons should keep their food product in the entire consumer buying capacity and
should different promotion systems and offers along with food discount.

Conclusion

In the last word we suggest the marrisons supermarkets to take another strategy along with
food discount to increase their consumers and to satisfy their consumer to increase the
forecasting seals revenue for the upcoming years.

17
Task 4
4.1 Management information Processing tools for WM Marrisons plc

Information systems are most important for operational activities of an organization. It’s a
combination of planned procedures and designed forms for an appropriate organization
structure and the managers who are competent of using the productivity.

Here is the process of information systems

Organization needs a wide range of systems to process the decision and to analyze the strategy and
hold information. We have already told about that the different management decision making levels
within an organization badly need of different types of information and now we told about how the
information systems vary.

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4.2 Plan for activity and determination of critical path

After the feasibility study for develop a new product of WM Marrisons supermarkets plc they
estimate the activities that would proceed to new product development.

Activity Description Immediate proceed Time in


A Preliminary Design first 5
B Market Research first 3
C Obtain Engineering quotes Start when A is complete 2
D Construct photo type Start when A is complete 5
E Prepare Marketing Materials Start when A is complete 3
F Costing Start when C is complete 2
G Product testing Start when D is complete 4
H Pilot survey Start when B & E are complete 6
I Pricing estimate Start when H is complete 2
J Final Report When F, G & I are complete 6

Now we can show it in a Network Diagram

C 2 F
2

5 A 5 4 4 6
D G
3 6

Start
E J
3 6

6 2
I
B 6 H

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The letter above the network diagram are activity each of the lines is one of the tasks, the
number below the line is the time of each task will take to complete. From the diagram we
can look at both of the paths and calculate which of them the critical one is.

Path of the number:

1. Start, A, C, F, J has needs a total time of 15 weeks


2. Start A, D, G, J has needs a total time of 20 weeks
3. Start B, H, I, J has needs a total time of 17 weeks
So Pathway number 2 will be the critical path as it has the longer total finish time.

4.3 Financial Tools for decision making

WM Marrisons supermarkets take two capital investment project namely Project A and
Project B. The cost of Investment for each project is estimated to be £5, 00,000. And the cost
of Capital is 10% and the WM Marrisons supermarkets want to invest only one project which
one is best. So by Calculating Net present value (NPV) of each project we can say what
project is useful for investment.

NPV for Project A

Year Cash flow Discount Factor Present Value


£ 10 % £
0 -5,00,000 1.00 -5,00,000
1 100,000 1/1.10=0.91 91,000
2 200,000 1/(1.10)2=0.83 1,66,000
3 400,000 1/(1.10)3 = 0.75 3,00,000
4 300,000 1/(1.10)4 = 0.68 204,000
5 200,000 1/(1.10)5 = 0.62 124,000
NPV 385,000

NPV for Project B

Year Cash flow Discount Factor Present Value


£ 10 % £

20
0 -5,00,000 1.00 -500,000
1 50,000 1/1.10=0.91 45,500
2 150,000 1/(1.10)2=0.83 124,500
3 300,000 1/(1.10)3 = 0.75 225,000
4 400,000 1/(1.10)4 = 0.68 272,000
5 300,000 1/(1.10)5 = 0.62 186,000
NPV 353,000

Here we found by the calculation of NPV of the two project and the Project A Net present
value after 5 years at 10 % discount is £ 385,000 and Project B is £ 353,000. In this case we
can suggest the WM Marrisons Super markets plc to invest in the Project A because Project
A will return more than Project B after 5 years at 10 % discount rate.

Conclusion

In this Research about Consumer Behavior & Attitudes towards food discount retailing in the
brixton of greater London we can find brief idea about consumer want and demand with their
age, income, gender, educational level. That will be helpful to make further decision making
about food promotion and supply in the supermarkets of WM Marrisons plc. And Wm
Marrisons will be able to manage the outfitted, tactical and deliberate (J devision, 2003)
levels in an organization.

To give knowledge about the management we used management information systems (MIS)
and demonstrated appropriate information processing tools for operational, tactical and
strategic (Stackpole, 2009) levels of the organization and evaluate inventory control systems in
an organization. We have tried to give the system and procedure and technique and material
based planning and Business report about forecasting threats for discounting retails that will
help to calculate economic order Quantity. And WM Marrisons will be able to take
appropriate decision about business context easily and accurately that will bring future
economic benefits and will be helpful for increasing sales revenue.

21
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