Do You Dream in Chocolate?
A Case Study on Lindt's Branding Strategies Before and After 2008
Helen Wong
A Capstone Project Presented to the Faculty of the School of Communication in Partial
Fulfillment of the Requirements for the Degree of Masters of Arts in Public
Supervisor: Professor Pallavi Kumar
April 26, 2012
Helen Wong
This capstone project would not have been possible without the help of Professor
Pallavi Kumar. Her invaluable guidance, encouragement, and willingness to help
have been very important to this capstone project. Also, I would also like to thank
Professor Maria Ivancin for giving me research guidance and being encouraging.
Finally, I appreciate the all the help from my fellow classmates by providing useful
feedbacks on my drafts and being supportive throughout the semester.
This study seeks to understand how Lindt rebranded itself for the mass market after the
economic downturn in 2008. By studying Lindt's rebranding effort before and after 2008,
the capstone project will also address the benefits and barriers of a more luxuriant
brand rebranding itself to more mainstream, as well as develop guidelines for brands
that want to take this leap in the future. A case analysis was conducted by comparing
how Lindt performs before and after 2008 in each branding pillar (storytelling,
positioning, customer relations, design, distribution, and pricing) based on the items
used by the brand. The research findings indicate that Lindt's rebranding strategies
have been successful based on its steady sales growth since 2008 because the brand
keeps some of its luxury appeal.
Table of Contents
I. Introduction .............................................................................................................................. 6
II. Literature Review
a. Overview of Branding ...................................................................................................... 9
b. Positioning ....................................................................................................................... 10
c. Storytelling ...................................................................................................................... 12
d. Design .............................................................................................................................. 13
e. Pricing............................................................................................................................... 17
f. Customer Relations ........................................................................................................ 19
g. Distribution ..................................................................................................................... 29
h. Luxury Appeal ............................................................................................................... 23
III. Case Study of Lindt's Rebranding Strategies
Methodology....................................................................................................................... 25
Lindt's Branding Effort Before and After 2008 .............................................................. 29
Discussion ............................................................................................................................ 34
VI. Conclusion ........................................................................................................................... 43
VII. References .......................................................................................................................... 44
VIII. Appendices ....................................................................................................................... 50
I. Introduction
Swiss chocolate brand Lindt & Spruengli, more commonly known as Lindt, was
established in 1845 by David Spruengli-Schwarz and his son Rudolf SpruengliAmmann. The brand started from a small confectionery shop in Zurich called Spruengli
& Son. The Spruenglis later renamed the company after buying the business of
Rodolphe Lindt, a chocolatier who invented the first truly melting chocolate. After 167
years Lindt becomes one of the most famous chocolate brands in the world, and its
products are distributed to more than 80 countries (Lindt, 2011). The brand entered the
U.S. market around 80 years ago, but it maintained a low profile till 1989. Lindt also
owns another famous U.S. chocolate brand Ghirardelli, which does not have a
prestigious image as Lindt. (Bernard, 2009). The brand's flagship products include
Lindor Truffles, Lindt Excellence, and Gold Bunny Chocolate Bars.
Although Lindt positions itself as premium chocolate brand and is always
considered as a major competitor of the Belgian chocolate brand Godiva, Lindt has
become more mainstream since the global economic downturn in 2008. The brand
closed around 50 to 80 stores to save money and decided to bring its products to
discount stores and drug stores such as CVS and Walgreens (Wiggins, 2009) besides
selling them in its remaining retail stores ("Lindt & Sprungli," 2009).
Apart from Lindt, other luxuriant brands have also rebranded themselves for the
mass market. One of the most famous examples is Revlon, a cosmetic brand that was
established by Charles Lachman, Charles Revson, and his brother Joseph Revson in
1932. Its image was glamorous, sexy, and confident. The use of supermodels in 1980s as
brand ambassadors further strengthened the brand's image as more upscale
(, 2011). Due to heavy debts in 1990s, Revlon decided to revitalize its
business by positioning itself as a more affordable luxury (Costello, 2001).
Revlon becomes more mainstream by lowering its price and tremendously
increasing its distribution channels. All of its products only cost from $5 to $15, which
are comparable to another mainstream brand P&G in the market (Barnes, 2012). Also,
coupons and free samples of Revlon have become more available in magazines (Sloan,
1994). Moreover, the brand changed its distribution channels from being in upscale
shopping malls to department stores, and eventually to mostly mass retail channels
such as CVS and Walmart (Barnes, 2012).
However, Revlon is still perceived as competitive as other luxuriant cosmetics
brands such as L'Oreal and Estée Lauder (Benady, 1999) because it still uses celebrities
such as Julianne Moore and Halle Berry as the brand ambassadors. Also, the brand
emphasizes its signature red in its advertising campaign to maintain some of its
glamour and luxury appeals.
Based on the examples of Lindt and Revlon, companies may consider rebranding
at some point to boost their sales especially during times of economic uncertainty. Since
little research has been done to examine Lindt's branding strategies before and after
2008, this capstone project will conduct a case study based on the items used by Lindt in
these time frames to compare how Lindt has rebranded itself for the U.S. market.
This capstone project will first provide an overview on branding, and then the
literature review will elaborate the concept of branding by explaining the six pillars of
branding: storytelling, positioning, design, pricing, customer relations (Healey, 2008,
p.6), and distribution (Perreault,, Cannon, and McCarthy, 2008), as well as the concept
of the luxury appeal in branding.
The research phase of this project will be a case study on Lindt's branding
strategies before and after 2008. Parameters of how luxury and mainstream brands
brand themselves will be drafted respectively based on the literature review. Then,
Lindt's prices, campaigns, posters, sales locations, and customer relations programs
before and after 2008 will be used for evaluation. Finally, based on Lindt's sales figures,
the project will discuss the benefits and barriers of rebranding from a more luxuriant
brand to more mainstream. The capstone will conclude by providing guidelines for
other luxuriant brands that want to enter the mass market in the future.
II. Literature Review
a) Overview of Branding
According to What is Branding by Matthew Healey, a brand can be anything from
products, services, organizations to even people. It is a "promise of satisfaction" and "an
unwritten contract between a manufacturer, a consumer, a seller, and a buyer" (2008,
p.6). Additionally, the American Marketing Association defines a brand as a "customer
experience represented by a collection of images and ideas" through symbols such as a
name, design scheme, and logo. Therefore, branding is an ongoing process to define the
promise and fulfill the customers' satisfaction by using suitable images and symbols.
Today, branding is generally defined according to these six pillars: storytelling, design,
positioning, pricing, and customer relations (Healey, 2008, p.8), and distribution
(Perreault, et al., 2008).
If brand recognition can be built, eventually customers' buying behavior can be
changed. Cacioppo, Petty, and Schumann (1983) use the Elaboration Likelihood Model
(ELM) to explain effectiveness of advertising. According to Fisher (n.d., para 1), ELM
states that human beings process information through two routes: the central route and
the peripheral route. When a product has strong personal relevance to customers, or
they have high involvement to the product, they will put more cognitive effort to
product evaluation. This cognitive engagement is also known as the central route of
processing in the ELM.
On the other hand, if customers have weak personal relevancy, or low
involvement to the product, they will put less cognitive effort to evaluate the product.
This is called the peripheral processing. Apart from personal relevancy, customers'
ability to process the information is essential to determine the purchase decision. Visual
elements are not necessarily peripheral cues and verbal elements may not be a central
cue as most scholars suggested. Depending on the target audience's ability, either visual
or verbal messages can relate to customers and appeal their emotion. Eventually, their
buying behavior will be changed (Cacioppo et al., 1983).
Therefore, if a brand can understand more about its target customers such as the
media they prefer for information, its promotional materials such as logos,
advertisements, and packages will be more appealing. Once stronger brand recognition
is established, its target customers will be more likely to pick up its products and learn
more about them.
b) Positioning
Jack Trout and Al Ries first proposed the concept of brand positioning in 1980
(Healy, 2008, p.8). To position a brand is to "manipulate what is already up there and
retie the connections that already exist in [customers'] mind" (Trout et al., 1980). Because
the brand needs to first understand what its target audiences think before well
positioning its product, positioning makes branding a two-way dialogue (Healey, 2008,
Positioning is important today; especially since consumers have too much
information to process every day. Once customers make up their mind, it is difficult to
change perceptions. Therefore, positioning strategies need to match customers' schema
(i.e. prior knowledge or experience) (Trout, et al. 1980) to increase the personal
relevance of the brand to its customers. Many brands rejected by customers are due to
the lack of schema. Since customers do not have prior knowledge to work with the
messages that the brand tries to communicate, millions of dollars spent on ads and
campaigns become a waste.
Trout, et al. (1980) also emphasize the importance of being first in the market or
in customers' mind because being the first is always remembered but not the second or
the third brand entering in the same market. If unluckily the brand cannot be the first
one in the market, it should try to be first in another category (p. 51-53). Once the brand
becomes the first in the customers' mind, it should try hard to make the brand stay the
first by being consistent and active with its strategies years after years (Aaker, 2008,
A brand should know its strengths and weaknesses and its competitors because
it will help carve out "a specific niche in the market" and the niche should resonate with
its target customers (Aaker, 2008, p.178). Based on Trout and Rie's concept, Aaker (2008)
suggest three possible "niches" for brands to bring potential customers from considering
products of the competitors: creating stronger emotional benefits than the competitors,
emphasizing different functional benefits, and setting lower costs for equal or greater
functional benefits (p.179).
c) Storytelling
Based on its position, a brand can form good storytelling tactics to help its target
customers gain unique experiences by differentiating itself from the others in the
market (Fog et al., 2010, p.16). People create stories to organize their experiences,
explain unique events, and gain perspective so that they can understand the world
around them as well as their role and identity in society (Escalas 2004). Stories are also
helpful to reinforcing the existing memory, updating the missing aspects of their
memory, and further proving that the story understood previously.
In branding, good storytelling should be able to build an emotional bond
between the brand and its customers. When a story has strong personal relevance to
customers, it will start to have a proper proportion in customers' lives (Bruce, 2001). The
best scenario is that the customers believe that purchasing products from the brand is
telling their own stories simultaneously.
Escalas (2004) further elaborates the good standards of storytelling skills. A good
story should consist of goal-directed action-outcome sequences (i.e. episode schema),
which means physical and/or psychological responses are created by initial events.
With these responses customers will develop goals that lead to actions that cause
certain outcomes. Therefore, if a story fulfills customers' psychological state (feel the
need to purchase), formation of goals (decide to purchase), action (purchase), and
outcome (product purchased), it will be a successful story.
Additionally, a great brand story should communicate the brand's value (what
the brand stands for) and identity (who the brand is) by embracing its heritage. By
emphasizing and reassuring the important role of customers in building the brand's
heritage, the bond between customers and the brand can be strengthened (Bruce 2001,
Healey 2008, p. 28) and loyalty will be built gradually. However, the brand also needs
to ensure customers to have the ability to understand the story. Sense of humor is
encouraged, but all the marketing jargons should be eliminated because it will separate
the brand from the customers (Bruce, 2001).
Fog, Budtz, and Yakaboylu (2002) suggest the four essential storytelling elements
to communicate the brand's core value: plot, message, conflict, and characters. The plot
provides a structure to propel the story forward to keep audience interested. Message
will be needed in the plot and usually there is only one central message such as the
moral behind. Conflicts can be emotional needs and they will mark the turning point of
the story. By addressing the needs characters are motivated to find solutions to solve
the conflicts (p.33). In brand stories customers and employees are the characters with
their roles. If brand stories can remind the internal listeners (employees) of how they
can also contribute to building the brand story, they can make the stories be touching to
customers easily with their pride (Bruce, 2001).
d) Design
Visual elements of a brand are usually the first thing to catch customers'
attention and evoke emotions to make purchase decision (Simmons, 2007). Apart from
having aesthetic qualities, visual element should also match the brand's position and
story. Simple and clean designs are always preferred (Christian, n.d., para 4). In
Emotional Branding (2001) Gobe suggests color, typography, images, and shapes are the
major design elements that a company should concern in branding (p. 68).
Color is one of the three visual pathways in human brains and using color
appropriately can increase the brand recognition by 80 percent. By triggering very
specific responses in the central nervous system and the cerebral cortex in our brain,
colors can activate our thoughts, specific form of perception, and memories (Gobe 2001,
p.77). Therefore, a brand needs to "own" its color in mind of customers (Daye, 2011).
On the color spectrum (i.e. all the colors of the rainbow) red, orange, and yellow
are referred as warm colors; green is the neutral color; blue, indigo, and violet are cool
colors. Warm colors come forward in space as well as bring excitement and stimulation
to our heart and nervous system. Apart from showing cheerfulness, creativity, and
warmth, warm colors are considered to increase appetite. Red is especially preferred for
fine dining because it is always associated with festivity, celebration, and completeness
(Cooper, 2008, p. 25-30).
Black, white, gray, and brown are neither warm nor cool colors. They can be
used frequently and in large area without being overwhelming, so the best effect will be
using these colors with little warm colors. Using solely black and white can be
perceived as cheap and inexpensive as generic brands. However, brown is always used
to show the wholesomeness and naturalness of food (Cooper, 2008, p. 34-36).
Typography is another important element in branding. Healey defines
typography as "the art of selecting and using an appropriate style of font, in a way that
reinforces the message of the words" (2008, p.96). Different fonts carry different
connotations and can relate to brand perception and consumer memory (Childers and
Jass, 2002).
Several scholars have suggested good uses of typography in branding. First,
because typefaces have particular semantic qualities, if a specific typeface has the
similar characters to the product on the advertisements or packages; the benefits of the
product and the brand would be the most memorable to customers under both high
and low involvement (Walker, Smith, and Livingstone, 1986; Childers and Jass, 2002).
Second, typographic consistency can reinforce brand recognition and communicate the
never-changing brand standards (Healey, 2008, p. 96). Finally, customers' memory for
brand benefits will peak if the semantic association of the typeface can be activated by
the "abstract connotative dimension," such as the elaborate style of writing and creating
the abstract association with the concept "elegance" (Childers and Jass 2002).
Unique and memorable shapes of packages can also trigger the "cognitive
process of evaluation" and brand preference under both high and low involvement
(Daye 2011). Three aspects of packaging can affect buying behaviors: functionality (if
the packages can fit customers' needs), environmental concern (disposal after use or
simplicity), and communication (if the design and product information fulfill human
curiosity and interest) (Clement 2007).
Among all visual elements, image is the most effective because it can give us "a
sense that we know the places, times, and people we have never experienced."
Customers' perception to the world will then be influenced (Schroeder 2008) and
human curiosity may be fulfilled.
Snapshot photographs are the most common images used in branding today
instead of illustrations because snapshots appear to be more contemporary, authentic,
casual, and fit average customers' regular lifestyle (Schroeder, 2008). Customers'
emotion and buying behaviors will be changed when different juxtapositions, lightings,
colorations, point of view, and cultural perspective recall their memory (Healey, 2008, p.
e) Pricing
Price point is also an important brand positioning cue besides design elements.
The brand's pricing strategies can either enhance or lower the brand's perceived value
and thus contribute to maximizing or minimizing revenue and profit for a company
(Dale 2011; Aaker, 2002, p.281). Although the concept of pricing was first proposed by
economist Alfred Marshall in 1890, research on this topic has not gone very far since
then. One of the major reasons is that companies believe pricing is more of a marketing
strategy instead of including it with other pillars of branding (Smith, 2011).
Brands tend to include deep discounts and desperately believe that this is the
only way to boost sales during economic recession. In fact, discounts can either help or
hurt a brand. Price reduction may be effective to boost the sales. However, to customers
and retailers, a sharp price reduction may indicate the brand to be the same as other
lower-priced brands and thus have average qualities. Also, if the brand is still strong
after the price reduction, customers and retailers may come up with their own
explanation such as the brand being overpriced in the past (Aaker, 2002, p.281).
Premium brands that want to move down need to be even more careful. They should
try to retain some quality differentiation; otherwise they will have to struggle not to
reposition the brand as a lower-quality price brand. In fact, according to Marketing and
the Psychology of Savings by Dale (2011), only a little creativity can generate different
options of pricing strategies rather than only provide discounts.
First, value perception of a brand or a product will be enhanced by higher price.
When two brands are in the market, if their prices are the same, their target customers
will not have any significant preference. If the price of one brand is higher, customers
tend to choose that brand because the higher price indicates higher quality and value.
However, if the price difference is too high, customers will return to a cheaper choice
(Dale, 2011), especially if they believe the price of the brand is too high compared to its
benefits (Aaker 2002, p.102). Therefore, the brand needs to find that balance.
Second, if a brand owns many products, it can "offer a less attractive alternative
with similar price" (Dale, 2011). Therefore, after comparison customers will be more
likely to purchase the "more attractive" products, which is also what the brand wants to
sell. Another way will be putting absurdly expensive items together to force people to
buy the cheaper items that the brand wants to sell.
Third, the brand can also create expectation of higher future prices, so customers
will want to stock your products because of the common philosophy of "buy now and
save" (Dale, 2011). This strategy is also adopted by some luxury brands to create luxury
appeals (Heine 2011).
Aaker also suggested that another good pricing strategy is based on strong
relations with your customers. If customers become loyal to your brand, they will be
more willing to pay more money for equal or similar benefits (2008, p.320).
f) Customer Relations
Customer relations focus on the human interaction between a company and its
customers. Scholar McCarthy's 4P model (price, promotion, product, and place) in 1964
suggested customer relations were built by solely promotion, which was also the same
as persuasion (Duncan and Moriarty, 1998). However, McCarthy's suggestion was soon
rejected by other scholars. Although communication with customers is always intended
to be persuasive, the term "persuasive" has a manipulative connotation and means only
one-way communication (Duncan et al., 1998).
In fact, building strong customer relations involves many one-way (through
advertisement and media coverage) and two-way communications (through customer
support during sale and post-sale period) rather than only one-way (Davis, 2005, p.198).
The ultimate goals of these communications are to make every customer feel important
and good about purchasing the brand (Healey, 2008, p.126). Three major strategies to
achieve these goals are setting customer touchpoints (Davis, 2005, p.198) and adopting
customer loyalty program (Hlavainka et al., 2007, p.48). These strategies are common
for luxury brands to communicate with their customers to make them feel prestigious
(Heine, 2011).
Customer touchpoints build a bridge between customers and the company
(Davis, 2005, p.198). Traditionally, the touchpoints are retail stores of the company with
knowledgeable and helpful staff as well as products readily available near the cash
registers. However, post-sale touchpoints such as technical support, return policies, and
follow-up surveys should not be ignored (Davis, 2005, p. 200). As technology is more
advanced, touchpoints can be extended to the Internet, movie product replacement,
radio, TV, and even lunchrooms for advertisements, brand publicity, product
information, and even Q&A sections (Davis, 2005, p. 200). Since customers may prefer
different ways to be reached, it is important for the company to identify who its target
customers are and their needs (Davis, 2005, p. 199). Also, when the brand gets "no
permission" to talk to its customers, it will be more likely to appeal the customers and
start the conversation by teaching customers information about its products to match
customers' needs (Hlavinka et al., 2007).
Rewarding customers by discounts and free products based on their loyalty is
another way to build good customer relations. This serves as an emotional appeal to
make customers feel good about using the brand (Hausman, 2011). Although this
program was traditionally considered as a short-term promotion instead of a way to
build customer relationship (Hlavinka, 2007), more companies put effort into the
program to establish long-term relationship with their customers (Healey, 2008, p. 126).
To launch a successful customer loyalty program, a company should treat its
customers as friends by empathizing, listening, and responding to their needs quickly.
Today, database technologies make it easier to stay in touch with the customers because
the company can track their shopping behaviors before providing suitable follow-up
services or rewards around customer's interest area for the loyalty program (Hausman,
2011). However, the entry point of the loyalty programs should be lower for those lowcost target customers, and the rewards should be attainable for most of the target
customers rather than the one percent heaviest users. Thus, the company can sustain
"the dialogue" with its customers and prevent them from going to other competitors.
g) Distribution
Distribution of products is another essential element in branding because
different ways of distribution affect customers' perception to the brand. Distribution is
also known as the "place" element of the marketing mix model proposed by economist
E. Jerome McCarthy (Perreault et al., 2008). According to Needham, distribution means
selling the product at the right place, time, and quantities based on the brand's
knowledge of its target customers (2010). For instance, the sales location or product
placement should help the target customers know the existence of the brand, so that
they can purchase the products easily (Needham, Rawlinson, Coles, Harris, and
Dransfield, 1999). However, the location and (D., Rawlinson, Coles, Harris, &
Dransfield, 1999)placement of products need to differentiate from other competitors
(Kotler and Armstrong, 2010). Also, a brand wants its product to be visible at the
precise moment such as during holiday seasons, so that target customers will be
encouraged to purchase based on their actual need or impulse (Four Ps Of marketing product, price, promotion, placement, n.d., para 1).
Channels of distribution are usually categorized as direct and indirect channels.
Direct channel means manufacturers selling products directly to customers, so
manufacturers will have total control on their product. On the other hand, indirect
channel go from manufacturer, wholesaler, retailer, and finally customers (Marketing
mix: place, n.d., para 2).
Three common distribution strategies are practiced in these two channels of
distribution. The first one is intensive distribution strategy, which means "a company
sells a product in as many places as possible, so consumers see the product wherever
they go" (Cambridge Dictionaries Online, 2012). This is the most common for products
targeting the mass market such as cigarettes, soft drinks, and eggs that are available in
drug stores and grocery stores because the purchase decision of these products is made
quickly and based on convenience. Also, these products are usually consumed rapidly
and the frequency of purchase tends to be high (Miracle, 1965). The second one is
exclusive distribution strategy, which limits products to be distributed to a single outlet,
or only one retail or agent in each region (Marketing Mix: Place, n.d., para 1). This
strategy is usually practiced by products with higher "technical complexity, unit value,
and the need of customer service as well as lower 'frequency of purchase' and speed of
consumption (Miracle, 1965) such as luxury. The third strategy is selective distribution,
which means products are "available only in a limited number of stores or a particular
type of store" (Cambridge Online Dictionaries, 2012). This strategy is the most common
for manufacturers with large geographic spread and target customers who are willing
to shop around. Criteria for retail stores being chosen includes whether the retail outlets
match the brand's policies of selling product such as providing proper training and
support for their staff to handle the products (Miracle, 1965).
h) Luxury Appeal
Although luxury brands adopt some of the tactics in branding as mentioned
above, luxury appeal is created to differentiate brands from others in mass market. The
word "luxury" comes from a Latin phrase "luxus," which means "indulgence of the
sense" and "regardless of cost." (Nueno and Quelch, 1998) Luxury items are "out of the
ordinary in terms of daily living needs." (Renand and Vickers, 2003) Since luxury items
are bought for "what they mean beyond what they are" (Dubois and Paternault, 2003),
buying luxury products is also suggested as an extreme way to demonstrate one's value
(Renand and Vickers, 2003). According to Catry, premium qualities, uniqueness, as well
as the illusion of scarcity and exclusiveness are vital to create luxury appeal. When
people own luxury, they should feel differentiated from the mass due to the "emotional
value of acquiring rare and well-crafted objects." (2003)
Historically, using products that are made of materials such as gold and silver
that are naturally scarce was "a luxury." Today, luxury appeal can be created in the
following ways based on the rule of scarcity and exclusiveness: being the first in the
market, having limited edition, and adopting individual approach such as more
customized interaction between the brand and customers (Catry, 2003). Dubois and
Paternault (2003) also mention that creating "dream value" is also an important
requirement to create luxury appeal. Dream value means the eagerness of customers
owning the luxury item. This eagerness can be increased if products are made less
attainable as well as "provide extra pleasure and flatter all senses at once." (Wiedmann,
Hennigs, and Siebels, 2007).
Other factors that create luxury appeal and affect customer's decision-making
process are focusing on the perceived extended self and perceived hedonism to the
luxury brand. In general good storytelling tactics in branding, luxury brands can create
perceived extended self by integrating "the symbolic meaning into customers' identity
or image" (Vigneron and Johnson, 2004). Apart from resonating customers' identity,
luxury brands should increase its perceived hedonism by creating "intrinsic enjoyment"
and emotional value such as excitement and gratification, so that customers will feel
fulfilled and rewarded during the purchase (Weidmann et al., 2007). For instance,
people feel more prestigious and special than their friends if they are using luxuriant
brands while all their friends are using other mainstream brands. If the luxuriant
brands are popular among Hollywood celebrities or use these celebrities as brand
ambassadors, people will feel as glamorous as these celebrities.
Although a more expensive product will be less attainable and have stronger
luxury appeal, luxury brands should also embrace their own historical antecedents by
emphasizing the brand's heritage and craftsmanship (Nueno and Quelun, 2008). Heine
further elaborates this idea by suggesting that the story and the position of luxury
brands should associate with the country of its origin that has "an especially strong
reputation as a source of excellence in the relevant product category" (2011).
Conclusion of the Literature Review
A brand should understand its strengths and weaknesses in order to increase its
personal relevancy to its customers. By finding a right position, the brand can come up
with a suitable story, design, pricing point, distribution channel, and customer relations
strategies to strengthen customers' emotion bond to the brand and make them feel good
about their purchase.
These tactics are also applicable for luxury brands, but luxury appeal needs to be
created. By emphasizing the brand's premium qualities, uniqueness, the illusion of
scarcity (Renand and Vickers, 2003), and dream value (Dubois and Paternault, 2003),
luxury brands can differentiate themselves from other mainstream brands in the same
The following section of the capstone will analyze how Lindt's image leaped
from more prestigious to more mainstream based on the six pillars of branding and
luxury appeal creation presented in the literature review. Also, the capstone will look at
whether this shift was the correct decision for Lindt by reviewing sales.
III. Case Study: Lindt's Branding Effort Before and After 2008
As mentioned in introduction, Lindt has become more mainstream after the
economic downturn in 2008. This study seeks to determine, through the framework
presented, how a brand such as Lindt that was once perceived as "prestigious" rebrands
itself for the mass market.
The first step was to draft parameters of how luxury and mainstream brands use
the branding strategies respectively based on the findings of the literature review, and
the appropriate data was sought for discussion in each of the branding pillars. The next
step was choosing items used by Lindt before and after 2008 to compare the use of each
branding pillar. Due to time constraints and limited manpower, this case study will be
limited to analyze one item for each pillar of branding. Items were chosen because of
their accessibility and visibility on the internet. The ultimate goal is that the items
reviewed should reveal some changes in the branding efforts of Lindt.
The parameters, branding pillars, and the items used are shown in the table
Pillars of
Items Chose for
Qualities to Create
Luxury Appeal
How Mainstream
Brand Use the Strategy
Commercials in
2005 and 2011
Ad campaigns
before and after
Price of Lindor
Truffle balls
before and after
2. Heine, 2011
3. Greenhill, 2011
4. Fog, et al., 2002
5. Quillin, 2012
6. Atwal and Williams, 2009
7. Edberg, 2011
9. Trout, et al., 1980
Resonate the "dream
value" 1
Embrace brand
heritage and
craftsmanship 2
Purchasing the product
will help audience be
unique among other
people 3
Invite audience to join
"the journey" as the
characters in the story 3
Has only one central
message such as the
moral behind. 4
Prestigious 6
Exclusive 6
Distinctive from
competitors 7
More individualistic 8
Rarely provide
discounts to keep the
brand less accessible
and evoke association
of rarity 2
Raise price
continuously year by
year to increase
demand and to
motivate customers to
buy sooner than later 2
Simply have
celebrity, model, or
interesting objects
surrounding the
products 5
Lack central
message 5
Affordable for
everybody 2
Still somewhat
distinctive from
competitors but may
not be as much 9
Offer discounts all
the time to make
products very
accessible 2
Pillars of
Items Chose for
Qualities to Create
Luxury Appeal
How Mainstream
Brand Use the Strategy
Customer loyalty
program before
and after 2008
Mainly use
commercials and
bulkmail to reach
the mass 2
Very accessible and
easy to be found
such as being in
grocery stores 2
Boutiques of the
brand are in every
corner 2
Distribution Sales locations
before and after
2. Heine 2011
Focus the
precisely to their target
group by keeping their
brand "a secret" such
as having exclusive
events 2
Personalized pre- and
after sales experience
such as product
customization and
providing advice to
customers 2
Adopt exclusive or
highly selective
distribution policies to
maintain product
Audience may need to
initially find out the
existence of the brand
and its products 2
Boutique should only
be in prestigious
shopping areas with
other luxury brands as
neighbors 2
Waitlist and limited
edition for some
products to "fuel
customers' desire and
thrill of anticipation" 2
Flagship store to show
specific personality of
the brand 2
Pillars of
Items Chose for
Qualities to Create Luxury
How Mainstream
Brand Use the
Posters of Lindt
Excellence in
2006 and since
2. Heine 2011
7. Edberg 2011
10. Christian n.d., para 3
Link to country of origin
The brand owns its
colors and shapes as
signature elements 7
Convey the brand
identity and position 7
Project timelessness
such as having clean,
simple logos,
monograms and classic
fonts 10
Do not usually
associate with
brand history 2
Lack of consistency
in images and
design 10
With too much
details and
information on the
design 10
Lindt's Branding Effort Before and After 2008
This chart compares and summarizes how Lindt rebrands itself based on the six
branding pillars mentioned in the literature review. Items listed in the chart below were
chosen based on their accessibility and availability on the internet.
Name of the commercial:
Do you Dream in Chocolate?
Company: Lindt (USA)
Air date: 2005
(See Appendix 1 for the
Name of the commercial:
Roger Federer "Airport"
Company: Lindt (USA)
Air date: 2011
(See Appendix 2 for the
This commercial does not have a clear plot,
characters, and conflict as the typical requirements
for good storytelling (Fog et al., 2002). Instead, the
commercial used the question "Do you dream in
chocolate?" and the line "150 years of our passion
for one moment of yours" as the theme throughout
the whole commercial. The main visuals used are
the chocolatiers making chocolate, swirling milk
chocolate being poured into a Lindor Truffle, and
the question in cursive font.
This television commercial uses Roger
Federer, a Swiss tennis player, to represent the
brand's Swiss heritage. The commercial uses the
storytelling tactics mentioned by Fog et al. (2002)
including a plot, characters, conflict, and a central
message. First, the commercial starts clearly by
showing Federer going through the security check
at the airport, and then how and why he is stopped
by the guards, and finally what the guards want to
do with his chocolate. The structure is easy to
follow and keeps the commercial interesting.
Second, conflict is introduced when the guards have
to find a reason to "steal" the chocolates based on
their emotional needs and they are not supposed to
do this. The question "Do you dream in chocolate"
in cursive font and the chocolatiers are making
chocolates are not used in this commercial. Only the
swirling milk chocolate being poured into the
Lindor Truffle appears quickly.
Lindt's positioned itself as similar to its major competitor Godiva
as luxury chocolate brand ("Lindt & Sprungli," 1999) and targeted 35 to
54 years old females with a household income of more than $50,000 ("A
Lindt Opts for Print," 2001).
The brand used "Do you dream in chocolate?" ad campaign to
maintain its prestigious image.
1. Prints ads were in lifestyle magazines such as Vanity Fair, Better
Homes, and Martha Stewart Living ("A Lindt Opts for Print,"
2. Created more classy and sensual mood on print ads and
television commercials by using visuals such as rich chocolate
being poured into a Lindor Truffle, headline "Do you dream in
chocolate" in cursive font, and a faint illustration of two old
chocolatiers ("A Lindt Opts for Print," 2001)
Lindt's repositions itself by using Roger Federer's likability to "talk
to existing Lindt customers in a more casual way" (Mahmud, 2010)
The brand launched the "Federer Campaign" to show its more
down-to-earth position.
1. Choose famous Swiss tennis player Roger Federer as the brand
2. Sense of humor is used in both television commercial and print ad
a) In the television commercial, the security guards try all the
ways to own the Lindor Truffles (Mahmud, 2010)
b) In the print ad, truffle balls are flying above the tennis racket
held by Federer (Mahmud, 2010)
3. The "Federer Campaign" also launched a sweepstake called "The
Perfect Match" in 2010. The sweepstake opened to everybody and
the winner could go to Federer's tennis games (Mahmud, 2010).
Lindor Truffle was 50 cents in the retail store (Exotikittenx,
2008). Also, a box of 60 Lindor Truffle balls cost $23.99 on (Chocolate Candy, 2004). That means each Lindor
Truffle ball cost about 40 cents. According to Lindt's annual report in
2002, the brand avoided working with hard discounter in order to keep
its premium and prestigious image (p.32).
A pack of 5.1 ounce Lindor Truffle with 12 truffle balls costs about
$4 regularly, which means each Lindor Truffle ball is about 33 cents.
Sometimes the same-sized pack only costs $3.50 in grocery stores such as
Giant and Walmart. That means each truffle ball is about 30 cents.
Customer Relations
Although Lindt had over 100 stores as its touchpoints before 2008,
it also had a customer loyalty program called "Lindt Lovers' Reward
Program" (Lindt Lovers' Reward, 2012). The program opened to
everyone as long as they filled out the application at the stores or on the
company's website. Members got one point for every dollar they spent
in Lindt retail stores or its online store. Once they had 100 points, they
would receive a $5 gift card as a reward. Also, they received newsletters
regularly and member-only offers as other benefits.
Lindt launched another customer loyalty program in May 2011
called “Lindt Excellence Influencer Club” besides the "Lindt Lovers'
Reward Program." This new program is exclusively open to 150 customers
who are willing to use Facebook as their primary communication channel
and match the criteria set by Lindt such as being passionate to the brand
and the products of the Excellence line. These 150 members were selected
from 9,000 applicants and can regularly receive samples, coupons, and
recipes, which allow them to provide feedbacks to Lindt and share with
their friends (Excellence Team 2011). Since only limited amount of
customers are chosen and the new club makes them more special than
other customers, this new club increases the brand's luxury appeal.
According to the Lindt's CEO Thomas Linemayr, Lindt was a "hitor-miss" item and only for specialty markets when it first entered the
U.S. market (Pacyniak, 2001). Customers had to purchase Lindt's
products in special confectionary stores. Afterward, the brand had its
own retail stores as a way to showcase the brand personality (Lindt,
Lindt gradually allowed some duty-free stores to carry its product;
however, product placement in the duty-free stores was under strict
rules. For instance, the products had to be in a fixed position in every
store as "Lindt Block," so they will be clearly recognizable to customers
(Lindt, 2002, p. 32). Lindt also had "Shop-in-Shop" program, which was a
six-tier self-contained wooden shelf displaying its products, in only 160
exclusive retail agents in the East Coast (Pacyniak, 2001).
Although Lindt used to have more than 100 retail stores, only 21
retail stores are left today. The majority of them are located in the outlet
malls or normal shopping areas in the East Coast. Only several stores are
located in prestigious shopping areas such as The Rolex Building on the
Fifth Avenue in New York City (Lindt Store Locator, 2012). The brand
heavily relied on local wholesale and grocery stores as its major
distributors. However, not all the grocery stores can carry Lindt's products.
For instance, most Walgreens, CVS, and Target can carry Lindt's products
but only selected Walmart stores are allowed to (Lindt store locator, 2012).
These stores need to follow specific requirements such as placing the
seasonal products at eye-catchy position in addition to normal shelf spaces
(Lindt 2011). Apart from retail stores, Lindt products can be purchased
through its own online store and other online confectionary stores.
Poster for Lindt Excellence in 2006
The poster layout is simple and clear. A
piece of Lindt Excellence chocolate is tilted in
the center and captures audience's attention. The
setting looks like being inside a pot of chocolate
and the light is shining from the right to light up
the pot inside, just as discovering some secret.
The chocolate piece rising from the creamy
chocolate ripple creates some dynamic.
Poster for Lindt Excellence from 2011
Although the elements used in this poster
are the similar to the poster in the past such as the
color combination and the chocolate ripple image,
this poster shows the whole chocolate bar with
the light coming from the top right corner to the
center instead of showing a piece of Lindt
Excellence. This poster looks cramped and busy
because the main visual is blown to more than
half page of the poster. Also, the chocolate bars
just immerse in the chocolate rather than coming
out from the ripple as the old poster.
This comparison of past branding strategies to present has proven that Lindt has
become more mainstream today, especially from the brand's prices and distribution
channels. However, the brand still keeps some of its luxury appeal in its positioning,
storytelling tactics, design, and establishing a more exclusive customer loyalty program
called the Excellence Influencer Club.
How Lindt Rebrands Itself for Mass Market
The first feature of Lindt losing its luxury appeal is to adopt deep discounts.
Although Lindt claimed that it would adhere to strict pricing policies and only give
limited discounts to maintain its prestigious positioning (Lindt, 2011), each piece of
Lindor Truffle dropped from 50 cents to 30 cents, which is 25 percent lower. Also, after
2008 discounted Lindor Truffles can be seen more often in large grocery stores such as
Target and Giant with each piece of Lindor Truffle being 30 cents.
According to Dale (2011) and Aaker (2002), deep discounts can hurt the brand's
perceived value and luxury appeal. Although deep discounts can increase demand in
short-run, they can decrease the sales in long-run because deep discounts indicate that
the brand has the same qualities as other less expensive brands in the market. Also,
customers may think that the brand was overpriced in the past. This impression will be
hard to change; unless the brand can maintain some quality differentiation from other
lower-priced brands.
Lindt's distribution strategy is another obvious feature to show the brand
becoming more mainstream. In the past, the brand enforced an exclusive distribution
strategy to maintain its luxury appeal. The brand strictly controlled its products to be
sold only in its retail stores and selected duty free stores. According to Miracle (1965),
this strategy is usually practiced by products with higher technical complexity, unit
value, and low speed of consumption such as luxury.
Today, although Lindt's products cannot be found in every grocery store and the
stores have specific rules to carry Lindt's products based on its selective distribution
strategy (Bryne 2010), the products are more accessible and visible in many mass retail
stores. Since distribution can affect customers' perception of the brand (Perreault et al.,
2008), by being too attainable, Lindt violates "the rule of scarcity and exclusiveness" for
creating luxury appeals (Catry, 2003).
Lindt tries to repositions itself from being more luxuriant to more down-to-earth
by using Roger Federer as the spokesperson and launching the new "Federer
Campaign" with sweepstakes and advertisements. Since tennis is a sport for a wider
range of audience and Federer is a famous tennis player, this approach can resonate his
fans or tennis lovers to pay attention to and purchase Lindt because it "carves out the
special niche" by bringing a "stronger emotional benefits than its competitors" (Aaker,
2008, p.179) and increasing personal relevancy to the brand (Trout et al., 1980).
This approach is similar to the chocolate dream ad campaign in the past. By
asking the question "Do you dream in chocolate?" and using more relaxing background
music, more sensual and classy feelings (emotional benefits) are created for Lindt's
target audience (35 to 54 years old female with high income). Also, when they see the
possibility of having their own chocolate dream or are reminded of the chocolate dream
they had before, it increases their personal relevancy to the brand.
However, compared to the visuals of chocolatiers and swirling milk chocolate
used in the ad campaign before 2008, the new position focuses less on Lindt's luxury
features such as its craftsmanship and exclusiveness (Atwal and Williams, 2008), which
also decrease the brand's functional benefit (Trout et al., 1980) because Lindt was
famous of its smooth Swiss chocolate and it is what the brand is always proud of.
The new commercial has effective storytelling tactics because it includes the four
major elements suggested by Fog et al.: plot, conflict, central message, and characters
(2002), and these elements make the commercial more structured and interesting.
However, the commercial has has less luxury appeal as the commercial in 2005.
First, compared to the line "150 years of our passion for one moment of yours" as
well as the visuals of the chocolatiers and the swirling milk chocolate in the television
commercial in 2008, the new commercial does not have as much luxury appeal. Instead,
the new commercial just subtly communicates the brand's heritage (Heine, 2011) by
having the Swiss tennis player Federer as well as its and well-craftiness (Heine, 2011) by
showing the excitement of the security guards and the visual of swirling milk chocolate.
Second, the new commercial does not invite the audiences to join the journey as
Federer (Greenhill, 2011) but simply shows his experience with the security guards. In
contrast, in the old commercial the question "Do you dream in chocolate?" leads the
audiences who had not had a "chocolate dream" before to pursue their unique versions
of chocolate dream by purchasing Lindor Truffle. Once the audiences know that such a
"sweet dream" is attainable, the brand starts relating to them more. Also, they will feel
the need to purchase Lindor Truffle and eventually may purchase the product. Thus, a
"goal-oriented action-outcome" sequence will be created and this is one of the keys for
successful storytelling (Escalas, 2004)
On the other hand, the new commercial still keeps some luxury appeal by
including dream value despite being more subtle. By humorously showing the
excitement of the security guards as they are eating Lindor Truffle, "extra pleasure"
provided by Lindor Truffle is resonated because the chocolate "flatters all senses at
once" (Weidmann et al., 2007). Therefore, the audiences will still be eager to have this
experience (Dubois et al., 2003) just as the chocolate dream, which demonstrates some
luxury appeals.
Visual elements are the first things to catch customers' attention and evoke their
emotions to make purchase decision. The elements should match the brand's position
and story (Simmons, 2007). Both posters have good color combination with the large
area of black and little warm color, which makes the posters pleasant to look at (Cooper,
2008, p.34-36).
The brand wants to position itself as more down-to-earth yet luxuriant because
the new poster uses a more contemporary font but still has similar elements as the old
poster such as the chocolate ripple symbolizing Lindt's craftsmanship. According to
Childers and Jass, fonts can carry different connotations to trigger and relate to the
brand's perception, and the san-serif font used in the new posters can convey a more
contemporary and down-to-earth quality of the brand. On the other hand, the cursive
and elaborate font used in the old poster is usually perceived as more elegant (2002).
Luxury appeal in the new poster is not presented as obvious as the old poster.
Although the new poster still wants to communicate the luxury appeal by using the
creamy chocolate ripple to show its craftsmanship (Heine, 2011), it is harder for
audience to associate that the chocolate bars are coming from the ripple because they
seem to just immerse into the ripple.
The new poster could have added more luxury appeal to avoid being completely
mainstream. First, the product should have a more unique placement as the old poster
because unique shape and signature design will make the brand more memorable
(Heine, 2011; Daye, 2012) as well as more comparable to luxury brands. Second, the
image of the new poster should have been smaller because the poster look busy and out
of proportion. Simple and clean design is always helpful to differentiate the brand from
other mainstream brands in the market (Christian, n.d., para 3).
Customer Relations
Apart from positioning, storytelling, and design, Lindt retain its luxury appeal
through its customer relations strategies during its rebranding. Instead of reaching its
target audiences by bulk mail as mainstream brands (Heine, 2011), the brand establishes
a more exclusive customer loyalty program called the "Excellence Influencer Club"
besides having the Lindt Lovers' Reward Program. By exclusively selecting 150
customers, solely using Facebook for communication and collecting feedbacks, as well
as keeping the club events private, Lindt becomes more comparable to other luxury
brands because this new club focuses its communication precisely on its target
audiences and is secretive to other non-members (Heine, 2011). The use of social media
also takes the "Excellence Influencer Club" to a different level from the Lindt Lovers'
Reward Program. Also, as the brand's "VIPs," these customers feel more special about
purchasing Lindt products. This positive emotional appeal will eventually strengthen
their loyalty about the brand (Catry, 2003; Hausman, 2011).
Conclusion of How Lindt Rebrands Itself for Mass Market
Based on the analysis, although Lindt has reduced its prices and increased its
distribution as comparable to more mainstream brands, from its storytelling tactics,
design, customer relations, and positioning strategies, the brand still tries to resonate to
its customers its luxury appeal by emphasizing its well-craftiness and keeping some
exclusiveness. These qualities form a special niche for Lindt and distinguish it from
other mainstream brands, which are also its competitors.
Is Lindt's Rebranding Successful?
Lindt can still maintain growth in its sales after rebranding for the mass market.
The annual report from 2002 to 2007 mention that Lindt's sales had more than 10
percent growth every year before 2008. After the economic downturn in 2008, its sales
still have had an eight percent increase every year according to Lindt's annual report
from 2008 to 2011. Based on the steady sales growth, Lindt's rebrand can be considered
as successful and this shows the possibility for more luxuriant brands becoming more
Part of Lindt's rebranding success can attribute to the brand keeping some of its
luxury appeals even when it decided to enter the mass market. Therefore, although
Lindt's products are more accessible and less expensive as other mainstream chocolate
brands such as M&M Mars and Hershey's, most people will still differentiate the brands
from the competitors.
Kapfere and Bastien (2009b, p.318) as well as Dubois et al. (1995) mentioned that
completely removing the luxury appeals affects customers' perceptions to the brand. If
the brand becomes over-diffused or suddenly too mainstream, it will damage the
brand's image even though it is the best seller. The reason for luxury brands being
"luxury" is based on the rule of scarcity and exclusiveness. Once this rule is broken, the
dream value will also decrease because owning the brands is not as exciting and special.
Customers can access the brands easily as other mainstream brands instead of having to
dream about owning the brands. In Lindt's case, by establishing a more exclusive
loyalty program as well as emphasizing the brand's heritage and its expertise of making
chocolate, the brand is still somewhat special to the customers despite a lower price and
being more visible.
Guidelines for Luxuriant Brands to be More Mainstream
Based on Lindt's case study, the guidelines are drawn for other luxuriant brands
that want to rebrand for the mass market.
More Affordable Pricing:
Discounts should not be offered very often because customers who first knew the
brand as more prestigious will change their perception to the brand. When the
brand lowers the prices of its products, it should keep some qualities of
differentiation such as adding more luxury appeal in other branding pillars.
Therefore, the brand can separate itself from other mainstream or lower-priced
brands in the market (Dale, 2011).
Selective Distribution:
Selective distribution strategy is recommended and it should be followed strictly.
Instead of relying heavily on mass retail stores, a brand may consider of using
department stores as another distribution channel for its products. Because
department stores are not as accessible as grocery stores, the products can be
somewhat exclusive and will not perceived as accessible as other mainstream
Positioning with Stronger Personal Relevancy:
Famous and likable spokesperson can be used to position the brand as more
down-to-earth. Yet, he or she should be able to increase audiences' personal
relevancy to the brand and convey the brand's well-craftiness, exclusiveness, or
heritage to maintain the some of the luxury appeal.
Storytelling Skills:
The sense of humor and the four storytelling skills (plot, characters, central
message, and conflict) should be used to keep the brand story more interesting
(Fog et al., 2002, p.56). Also, it should communicate an attainable dream, and the
dream should resonate the audiences' past experience to increase the brand
relevancy to them.
More Contemporary Design:
Good color combinations (Cooper, 2008, p. 34-36), clean and simple layout
(Christian, n.d., para 3), as well as unique packages (Clement, 2007) are always
important to capture audiences' attention. Also, the design should have a good
balance of luxury appeal and contemporary style. For instance, when the image
shows a unique shape and color of the product as the luxury appeal, san-serif
fonts or snapshot photos (Schroeder, 2008) can be used as the contemporary
Customer relations to Build Stronger Loyalty:
Loyalty or reward program is recommended. There should be one program just
for more important customers as the Lindt Excellence Influencers Club and
another one for lower-cost customers as an encouragement for their loyalty
(Hausmann, 2011). Therefore, the brand can be more open to the mass market yet
still maintain some exclusiveness to be luxuriant.
This study looks at how Lindt rebrands itself from a more prestigious brand to
more mainstream after the economic downturn in 2008 based on the six pillars of
branding and the concept of luxury appeal.
The research revealed that Lindt's rebranding has been successful based on its
steady sales growth since 2008. Lindt's pricing strategies and distribution channels
make the brand more accessible as other mainstream chocolate brands; especially after
the brand decided to expand its U.S. headquarters in Stratham, New Hampshire in 2006
for a larger scale production and distribution (Lindt 2006). However, Lindt is able to
maintain some of its luxury appeals in its positioning skills, storytelling tactics, design,
and customer relations program and this might be a reason for its continued success.
Since only one item was analyzed for each pillar in this study, it is recommended
that two or more items should be compared to get a more thorough analysis of Lindt's
rebranding strategies. For instance, future research can look at the role of using social
media to strengthen customer relations and the designs of promotional materials of
different products owned by the brand. Also, for future research on rebranding
strategies, multiple case studies can be done, so that the research can further examine
how and why certain shift from being more luxuriant to more mainstream.
The findings of this study are important because it examine the barriers and
benefits for a more luxuriant brand to enter the mass market. Finally, based on Lindt's
case analysis, guidelines are drawn as for other luxuriant brands that want to enter the
mass market in the future.
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Appendix 1 -- Television Commercial of Lindt in the Past (2005)
(Calming classcial background music)
VO: Do you dream in chocolate?
VO: Let's discover the Lindor Truffle
(Calming classcial background music)
VO: Crafted with perfection and
passion by Lindt's master chocolatiers
(Calming classcial background music)
(Calming classcial background music)
VO: Its lushly smooth center starts to
VO: And so… will you? A 150-year
passion all for that one moment of your
VO: Lindt
Appendix 2-- Television Commercial of Lindt in the Present (2011)
(Background noise: people walking by)
(Sound: "ding ding…")
Federer: Hello
Security: Come check this out
(Background music: ding ding…)
(Background sound: unzipping bag)
VO: Lindor Truffles.
(Background sound: unwrapping Lindor
VO: When the smooth center starts to melt
Security: We are going to confiscate these.
Federer: Why is that?
Security: It's a new policy. I think we
should do a strip search too.
Federer: Excuse me, are you kidding me?
(Background music: ding ding…)

Helen Wong Do You Dream in Chocolate?

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