The 7th International Conference On Business and Management Research (ICBMR) 2012
The 7th International Conference On Business and Management Research (ICBMR) 2012
The 7th International Conference On Business and Management Research (ICBMR) 2012
Authors:
Abstract
Globalization has introduced local foods from around the world to become competitive, but at the
same time it threatens culinary diversity. “Western Sumatera Rendang” has been rapidly growing
and opens challenges to global market penetration. The study is descriptive with quantitative and
qualitative approach. It has three objectives; to identify Indonesian local food growth
opportunities in the global market. It is also to analyze SWOT of “Rendang” and to measure the
global consumer perception level towards “Rendang”. The methodology taken is through Focus
Group Discussions (FGD) with culinary experts as well as through survey to foreigners in
Jabodetabek. The study reveals that there are opportunities for “Rendang” in the global market.
Using the SWOT Analysis, the study found that “Rendang” has substantial strengths and
opportunities, and should implement an aggressive strategy. Using the T-Test, the study found
that there is a positive level of perception from global consumers towards “Rendang”.
SMEs, and strategies to develop “Rendang” cooking sauce products to suit the global market.
Keywords: local food, culinary globalization, global consumer perception, SWOT analysis
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I. INTRODUCTION
Indonesia possesses various unique cultural assets and heritages. Every region and
province in Indonesia has its own specialties, especially in their food. Indonesian food has been
famous for being spicy, sweet, and complex in its flavor and preparation. This makes them very
popular among both local and international consumers. On September 2011, a poll conducted by
CNNGo shows that Indonesian “Rendang” or Caramelized Beef Curry ranked number 1 in their
“World’s 50 Most Delicious Foods” poll (CNNGo.com). This result opened an opportunity for
this local traditional dish to be a valuable contributor to increasing the country’s export
Food however has often been named as offering a valuable point for observing
globalization, as it highlights close connections among peoples, cultures and places. Culinary
cultural studies. One of the areas that have so far received much attention is the global spread of
American fast food (Ritzer 1993; Watson 1997). This indicates that the government has already
realized the potential of bringing this dish to the global market and is supportive of the attempts to
take that opportunity. As consumer lifestyle changes, there is also an increased demand for
processed food products in developed countries. Ready-to-eat food is one of the fastest growing
countries tend to consume ready-to-eat food products more than consumers in developing
countries (Gehlhar & Regmi, 2005). Food products that are labor and time saving are increasing
in demand in developed countries (Gehlhar & Regmi, 2005). With all these opportunities and
potential, it is becoming more and more possible to further distribute and develop Indonesian
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Local Food, especially “Rendang”, at a global scale. There are, however, several challenges that
the Indonesian Food Players face in their attempts to globalize their products. These challenges, if
overcome, will result in even greater opportunities to access global markets. The food safety
standards and regulations imposed by several developed countries and the World Trade
Organization (WTO) are one of the challenges that Indonesian Food Industry faces. These
standards are sometimes too high and tend to impact negatively on the international distribution
increasing human activity and interchange of worldviews, products, ideas, and other aspects of
culture (Al-Rodhan, 2006; Albrow,1990). Globalization discussion that emphasizes hybridist and
the mosaic model of the cultural mix is based on the assumption that all actors participate in the
process equally, ignoring internal hierarchy among them. Cook and Crang (1996) do not completely
agree with this notion of a random cultural blend and argue for the consideration of complex
diversity.” Fundamentally, the concept of national cuisine is an invented tradition. In his analysis of
Indian cookbooks, Appadurai (1988) illustrates that class is an important factor that shapes the
construction of Indian national cuisine. In a similar light, Wilk (1999) contends that “real Belizean
food” is a recent invention created in the process of de-colonization and also in response to intrusive
foreign cultures; he emphasizes that the meaning of national cuisine is changing and shifting over
time. Thai national cuisine is also a construction and the “authentic Thai food” promoted
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2.2. Strength Weakness Opportunity Threat (SWOT) Analysis
A firm needs to carefully evaluate and analyze its competitive position to further develop
its competitive advantage (Kotabe & Helsen, 2011). One effective way to do that is through
SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis. This analysis classifies
information into internal and external factors, then further into positive and negative aspects.
Based on this SWOT model, marketers can develop alternative strategies. Companies may
develop one or more strategies, depending on their objectives and conditions. For example, if the
company found that their strengths and opportunities are strong, they might want to develop the
S*O Strategy to further maximize both their strengths and opportunities. Thus, the SWOT
Analysis framework helps to identify various alternative strategies to consider (Kotabe & Helsen,
2011). SWOT Analysis may be useful to translate managerial planning discussions into a more
structured approach to strategic implementation. SWOT Analysis aims to identify one of the
four distinct patterns in the match between internal resources and external situations (Pearce &
Robinson, 2011).
Some global companies are excellent in developing new products for the global market.
Gary Reiner explained that these companies pursue opportunities in competitive global markets,
thus their products will be world class. He identified the characteristics of these companies and
noted that (Keegan & Green, 2005) ; They are focused to only a few businesses, The product
development process is actively controlled and improved by senior management, They are able to
hire and maintain the most qualified employees in their fields, They understand that speed in
bringing new products to market strengthens the quality of the product. Steps into developing
new products for the global market are as follows (Kotabe & Helsen, 2011):
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a) Identifying New Product Ideas: Ideas can be obtained from 4Cs (Company, Customers,
b) Screening: Ideas need to be screened to sort out the most potential from the least potential
ones.
c) Concept Testing: The screened ideas then go through concept testing to see how the ideas
can appeal to the market and develop the design of the product.
companies can make projections of market shares, sales volume and performance of the
new product.
e) Timing of Entry: Companies should also pay attention to the time to launch their products.
2.4. Perception
advertising. Just as sensory perception relates to how humans perceive and process sensory
stimuli through their five senses, consumer perception pertains to how individuals form opinions
about companies and the merchandise they offer through the purchases they make. Merchants
apply consumer perception theory to determine how their customers perceive them. They also use
consumer perception theory to develop marketing and advertising strategies intended to retain
current customers -- and attract new ones. Perception is originally from the Latin perceptio,
percipio (Schacter, Daniel, 2011). It is also could define as the process of attaining awareness or
2011). The process of perception begins with an object in the real world, termed the distal
stimulus or distal object. By means of light, sound or another physical process, the object
stimulates the body's sensory organs. These sensory organs transform the input energy into neural
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activity—a process called transduction. This raw pattern of neural activity is called the proximal
stimulus. These neural signals are transmitted to the brain and processed. The resulting mental
recreation of the distal stimulus is the percept. Perception is sometimes described as the process
proximal stimuli.
III. METHODOLOGY
This study aims to test the hypothesis and answer the research questions, using both
qualitative and quantitative approaches. The purpose of this study is descriptive, where
are done and opportunities to overcome those challenges are identified. This study describes the
phenomena of “Rendang” in terms of its competitive positioning and global consumer perception,
which are then related to its opportunities in penetrating the global market. Both primary and
secondary data are gathered for this research. Secondary data includes statistical data, quotes,
theories, articles, and figures in regards to Indonesia’s processed food industry and the global
market trends towards processed food. Primary data are obtained by using both qualitative and
quantitative approaches. Focus Group Discussions were conducted among groups of local food
producers and suppliers that are SMEs for qualitative approach. The data of the global market
level of perception towards “Rendang” is obtained through conducting a survey among foreigners
IV. DISCUSSION
4.1. Opportunity Growth Analysis of “Rendang” in Indonesia and the Global Market
Caramelized Beef Curry or, in Indonesian, ““Rendang Daging”, is a traditional spicy meat
dish which originated from the West Sumatra province. The term ““Rendang”” itself means the
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process of cooking by stirring the dish constantly, not letting the dish simmer too long without
stirring (Suri, 2012). This dish is widely known and is consumed by people all over Indonesia,
from Sabang to Merauke, from the lowest to the highest economic class of society. Due to its high
popularity and consumer preference, every Padang Restaurant, both in Indonesia and in foreign
Through the years, Padang Restaurants have been opened all over Indonesia and in
several foreign countries, serving Western Sumatra “Rendang” as one of their menu. However,
there hasn’t been much “Rendang” products that are distributed in the local retail markets and are
ready to be consumed by the local customers. The products that are now sold in both local and
global market are still in forms of “ready-to-cook” sauces, while there are demands in the market
for “ready-to-eat” “Rendang” products. With its diverse traditions and delectable cuisines,
Indonesia has a strong potential to attract the attention of the international audience. Both local
and international citizens that visit Indonesia admit that Indonesian Foods, especially “Rendang”,
are undoubtedly delicious. Due to the already high preference and awareness in Indonesia towards
this dish, it seems that there is no need to further promote and educate the local market about this
dish. SMEs in Indonesia are now producing packaged and ready-to-eat “Rendang” products in the
local market. These SMEs are creative and focused in developing their products and brands,
therefore gaining their own customer base as well as awareness for their brands. Some of these
SMEs have even done research and develop their products in accordance to the quality regulations
imposed by the National Drug and Food Monitoring Agency (BPOM). However, these products
are only sold through traditional markets, phone, and online orders. They can’t seem to further
negotiations. Therefore, the Indonesian Food and Beverage Association (GAPMMI) and the
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Indonesian Government play an important role in developing rules and regulations that can
support these SMEs to further develop and grow. It was previously mentioned in this chapter
that every region and city in West Sumatra has their own version of “Rendang”. These versions
differ in regards to their color, cooking method, and spices. There are “Rendang” from the city of
Padang, Painan, Batusangkar, Bukittinggi, Pariaman, and Payakumbuh (Suri, 2012). Furthermore,
with the different ethnicity of sellers, there are also other versions of “Rendang” which are made
all over Indonesia. These versions differ in taste, color, and even the shape of the dish. These
differences can create confusions in the global market about which versions are the authentic one.
Therefore, there should be a standardized version of “Rendang”, to minimize this problem. The
standardization of “Rendang” should be more to its basic features, such as the name, color, form,
basic ingredients, basic spices, cooking method, and the aroma. The challenge of standardizing
this dish is that there still seems to be no consensus yet on which version that should be
standardized. The standardization process should also be done carefully to prevent conflict over
the reason of choosing one version over the other. The Government and other standardization
bodies should put more concern, commitment and involvement in this process. In conclusion,
“Rendang” has great potential to grow in the Indonesian market due to the large population and
high awareness. If the local authorities and parties are willing and committed to develop the
authentic “Rendang”, this dish could be the icon of Indonesian Culinary and boost the country’s
business and tourism sector. It is suggested that “Rendang” should first be fully developed in the
local market, before penetrating the global market. Due to the complicated procedures, strict
regulations, and high standards imposed by the global market, it requires a lot of effort,
commitment, determination, patience, and cost to bring this local dish to the global market.
Despite the high barriers and difficulties, there are always an opportunity to bring this culinary
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icon into the global market. It is indicated that the demand of exported Indonesian food products
in the global market are mostly from Indonesian citizens or descendants living overseas. The
demand for these products is usually due to the fact that they are homesick and that they miss the
food they used to eat back home. These demands create opportunity for “Rendang” to be
developed and suited to the global market. There are actually quite a number of Indonesian
citizens or descendants that are spread across the globe. For instance, after the Indonesian
Independence in 1945, over 300,000 Indonesians, Europeans, and mixed “Indo” ancestry moved
to the Netherlands. Nowadays, the Indos are the largest minority group in the Netherlands
(Multicultural Netherlands.com, 2010). In Berlin itself, there are a total of 11,947 Indonesian
citizens as of 2010 (Indonesian Embassy, Berlin). As the number of Indonesian citizens in foreign
countries keeps growing, opportunities for Indonesian Food in the global market, especially
“Rendang” has not yet been standardized in the local market, it will be very difficult to penetrate
the global market. There have been cases that the “Rendang” dishes, which are sold in the global
market, differ in their basic features. Some dishes are red, some are yellow, and others are green.
The lack of awareness of the global consumers towards this dish also adds to the difficulties.
Extra promotional efforts should be done to educate the market about the authentic Western
Sumatra “Rendang”. There are also difficulties of obtaining basic ingredients to make this dish in
the global market. The ingredients that are commonly found in Indonesia are sometimes rare in
some foreign countries. For instance, shallots are rare and expensive in some foreign countries.
There are also debates about using fresh or packaged coconut milk. Another point is about the low
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willingness of most global consumers in contributing time and efforts into preparing this dish the
right way.
Additionally, international standards and regulations about meat create barriers for “ready-to-eat”
“Rendang” products to enter the global market. Internationally recognized standards and
regulation for meat trade are imposed by the UN Economic Commission for Europe (UNECE).
Importers must follow the criterias imposed by this body. Those criterias are, for example,
certified and registered slaughter houses, concern for the animal health standards, hygiene,
labeling, packaging, and much more (UNECE, 2007). With all these strict regulations, it seems
impossible for “Rendang” products that contain meat to enter the global market. However, spices
and sauces from Indonesia can enter the foreign market more easily. Nowadays, some local
manufacturers of spices and sauces, such as Kokita and Indofood, have exported their products,
including “Rendang” cooking sauces, to the global market. This type of products are “ready-to-
cook” products which requires the consumer to spend some effort and time to cook them before
being able to consume them. Despite the issue of convenience, exporting “ready-to-cook”
“Rendang” products may be the first and easier way to enter the global market.
William Wongso, an Indonesian professional chef and culinary expert, has been studying
about Western Sumatra “Rendang” and has launched his own brand of “ready-to-eat” Western
Sumatra “Rendang” products. He has also been appointed to be the ambassador of Western
Sumatra “Rendang”. His brand and products are sold and marketed in Indonesia and the
Netherlands. Due to the strict regulations and standards about meat commodities, he decided to
produce his products in the Netherlands, using spices from Indonesia and meat from the
Netherlands. The products that are produced in the Netherlands will then be sold and marketed in
the Netherlands.“Rendang” should be developed to suit the global market. In reference to the
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steps into developing new products for the global market formulated by Masaaki Kotabe and
Kristiaan Helsen (2011), the development of “Rendang” should be done through these following
steps :
Step 1: Identifying type of Rendang product
than can be developed
Types of products may include “ready-to-eat” products, in which the products are 90% cooked
and only requires little effort to be consumed; and “ready-to-cook” products, in which the
products are still raw and requires more time and effort to finally be ready to be consumed. In this
stage, identification of which version of “Rendang” that should be developed should also be done.
In the second step, ideas are screened out and the best idea is kept. Looking at the current
the form of cooking sauce. William Wongso suggested that the Padang version of “Rendang”
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should be the one to be developed for the global market. The third step is the Concept Testing
stage. At this stage, details of the product are then designed. In the case of “Rendang”, certain
features such as the ingredients, taste, color, and packaging are designed to be suitable for the
global market. Other safety features such as quality standards and health standards should also be
carefully designed for the global market. Chefs and producers have been participating in
international festivals and bazaars and giving out samples of their product to the global customers.
Feedbacks from these global customers are then collected to help them develop their products.
The fourth step is the Test Marketing stage. After the product has been design and developed, it
should then be tested in the global market. In relevance to “Rendang”, it is suggested that test
marketing should be done towards groups of Indonesian citizens through several particular
Indonesian Embassies that are spread in 130 countries around the world. It is also suggested that
test marketing may be done during “Pasar Malam Indonesia” (Indonesian Night Market) that is
held every year in Den Haag (pasarmalam.indonesia.nl). Time to launch the products should also
be determined before the launch. Since the product features of the “Rendang” cooking sauce are
already developed for the global market, the launch should be done using the Sprinkler Model,
where products are launched simultaneously (Kotabe & Helsen, 2011). Only certain product and
packaging features, such as labeling and languages, should be adapted and suited to the respective
countries. Finally, the launch should be done through the all Indonesian Embassies in 130
countries, by sending Indonesian chefs and food experts to these countries to market and educate
the market about the product and how to use it. Governments are encouraged to educate and
facilitate local “Rendang” producers, especially the SMEs, in preparing them to expand their
business to the global market. Some of the ways to do this are by giving workshops and seminars
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for SMEs, support local SMEs to participate in international bazaars and festivals, as well as
formulating the regulations in a way that can support the development of these SMEs.
should be done. Therefore, Table 4.1 shows the classification of information regarding
Strengths Weaknesses
High product awareness and customer Not standardized yet in terms of color, name,
preference. Using all real ingredients, no mock form, and basic ingredients
ingredients (ex: real beef, real chilies, real Complex and time-consuming cooking
coconut milk) process
Spices are authentic to Indonesia Indonesian SMEs in the food industry are less
developed and educated about standards and
regulations
Strengths Weaknesses
Voted the World’s Most Delicious Foods Various versions of this dish create
according to CNNGo difficulties to standardization
Possesses Indonesian, particularly Western Lack of Indonesian chefs who are experts in
Sumatran, cultural values Indonesian cuisines, especially “Rendang
Caramelization process of the curry sauce,
creates a unique and authentic aroma and taste
Mixture of the basic ingredients creates an
authentic and mouthwatering taste and aroma
Various versions of this dish create diversity
which may be a unique factor
Opportunities Threats
Less complicated and strict regulations towards Ingredients and spices are rare and expensive
export of “Rendang” cooking sauce products in some foreign countries
Demand from Indonesian citizens or Different versions of this dish found in the
descendants that are spread out around the foreign market, in terms of taste, form, spices,
world ingredients, and cooking method
Upgrade of “Rendang” product quality, Strict regulations and standards about quality
followed by increase of product value and price of meat products imposed in the global
Coordination with Indonesian Embassies to market
launch the product
Commitment and willingness from Indonesian
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cooking sauce producers that may lead to
future cooperation or partnership
To manufacture or produce “ready-to-eat”
“Rendang” products in foreign market
“Rendang’s” strengths are mostly about its authentic and distinct features, as these features are
rarely found in dishes from other countries. For instance, every single ingredient in this dish has
to be real, meaning that they cannot be substituted with other mock ingredients made up of any
natural or chemical substances. Other strengths include its high awareness, its image, and cultural
values that are difficult to be imitated by any other dish in both the local and global market.
Weaknesses are also mostly about some features and the development of this dish. Various
versions of this dish can be both a strength and a weakness when seen from different perspectives.
Various versions may create diversity and can be marketed as the dish’s uniqueness. On the other
side, these variations may also be a barrier in the standardization process of this dish.
Furthermore, Indonesian SMEs and chefs are still lack in education and information about the
Indonesian food industry, therefore making it difficult for “Rendang” to develop. However, these
drawbacks can be solved by providing organized seminars, workshops, and trainings to these
After analyzing its SWOT, strategies can then be formulated and implemented. It can be
concluded that “Rendang” has substantial internal strengths as well as numerous environmental
opportunities. In reference to the SWOT Analysis Theory by John A. Pearce and Richard B.
Robinson (2010), “Rendang” falls into Cell 1, which is to implement an aggressive strategy.
Several strengths and opportunities indicators suggest that “Rendang” should be place in Cell 1.
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Strength indicators include the high awareness and preference due to “Rendang’s” leading
position in CNNGo World’s 50 Most Delicious Food Poll as well as its aroma, taste, and
ingredients that are authentic and unique. Opportunities indicators include the possibilities of
developing export for “Rendang” cooking sauce product, the opportunity to upgrade Rendang
product quality, value, and price as well as the opportunity for local manufacturers of cooking
sauces to build cooperation to bring their “Rendang” products to the global market. Aggressive
strategy may include creating attractive campaigns, constant media publications and advertising,
as well as focused development of “Rendang”. Both the government and private business sectors
should work together and have high commitment in implementing this type of strategy. Actually,
certain strategies have been done to develop “Rendang” further in both global and local market.
The Governor of Western Sumatra has now been organizing and encouraging housewives in
regions to produce and sell “Rendang”. There has also been “Rendang” festival that is held
annually by the Western Sumatra Government Tourism and Culture Office in the city of Padang,
where participants may take part in the “Rendang” cooking competition, bazaars, or even the
“Rendang” songwriting competition. This festival aims to promote Western Sumatra cuisines to
Surveys were conducted towards foreigners that are currently staying in the Jabodetabek
area of Indonesia. The questionnaire wants to measure the perception level of global consumers
towards “Rendang”. In reference to the perception theory discussed in chapter 2 of this thesis,
consumers’ product knowledge plays a role in shaping consumers’ perception. This knowledge is
classified into three types: Product’s Attributes, Product’s Benefits, and Product’s Values (Peter
& Olson, 2005). All questions are designed as statements and require the respondents to give
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their degree of agreement/disagreement towards each statement. The assessment ranges from
coding 1 for Strongly Disagree, 2 for Disagree, 3 for Neutral/Don’t Know, 4 for Agree, and 5 for
Strongly Agree. Using SPSS 17 and PH Stat software, data are inserted and calculated using the
One Sample T-Test method. The variable “Product’s Attributes” is coded as AT, “Product’s
Benefits” is coded as BE, and “Product’s Values” is coded as VA. The last question concerning
1 2 3 4 5
Product’s Attributes
3.70 3.88
Product’s Benefits
3.49 3.68
Product’s Values
3.41 3.53
Overall Perception
3.55 3.89
V. CONCLUSION
This study attempts to analyze the opportunities of Rendang as a local food in the global
market, analyzing the SWOT, and measuring the global consumer perception level. Opportunities
include a high awareness and preference of the local market towards “Rendang”, it should be
easier for Indonesian Rendang producers to further develop their products in the local market.
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There are also opportunities for the local home industries in Western Sumatra to grow and
develop as well as for SMEs to produce and manufacture “Rendang” in the local market. In the
global market, more opportunities also exist. The strict regulations on meat products and the
rareness of “Rendang’s” basic ingredients in the global market open an opportunity for
“Rendang” cooking sauce products to enter the global market. From SWOT Diagram is shown
that strength of Rendang is dominant ; its authentic features and characteristics, including the
physical and cultural characteristics, that differentiate itself from other traditional dishes from
other countries that are available in the market, voted the World’s Most Delicious Food according
to CNNGo. And its opportunities shown a great indicator; The development of “ready-to-cook”
“Rendang” products, for example: cooking sauce products, for the global market, demand from
Indonesian citizens and descendants in foreign markets and upgrading the quality and value of
“Rendang”. The survey conducted among 100 foreigners in the Jabodetabek region, shown a high
VI. RECOMMENDATIONS
a) Experts and business players from the Indonesian Food Industry should gather together to
talk about the characteristics and features of “Rendang” and determine on which characteristics
are to be standardized. The elements to be determined may be the “Rendang’s” color, basic
ingredients, and cooking method. For example, the color of “Rendang” is dark brown, it has to
contain coconut milk, chili, and certain spices. The standardized version of “Rendang” will then
b) Since, currently, the most product type to export is the “ready-to-cook” products (sauce),
cooking sauce products for Indonesian traditional dishes, including “Rendang”. These products
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are then launched together under one official brand, for example, “Indonesian Authentic
Rendang”.
c) Physical characteristics, such as taste, aroma, and color, should be developed to suit the
global consumers’ preference. Abstract characteristics, such as the name, country-of-origin, and
cultural values, should also be developed as a form of communication that can create appeal
d) Mass media such as magazines and newspapers should be utilized to regularly update and
remind the market about “Rendang”. Both the public and private business players should work
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