IES602

M-1340-E
January 2016

BCN Brand: Selling Barcelona Around the World

“We knew that if we succeeded in foreign markets we would get attention at home.”
Pablo Caralps, general manager of BCN Brand

On November 24, 2015, Pablo Caralps, a 44-year-old economist and general manager of BCN
Brand, arrived on the Champs-Élysées ahead of schedule. He had arranged to get together with
Marc Pons, a childhood friend who was a fashion marketing consultant working in the French
capital. He wanted to ask for advice about BCN Brand.

The company had taken off very quickly and the time had come to make some decisions,
beginning with the most urgent one: Should Caralps hire a marketing director? Until then Caralps
hadn’t wanted to limit his reach. However, BCN Brand was growing and it might eventually be
too much for him to handle.

BCNBrand: A Meteoric Rise

“Meteoric” is a fitting adjective to describe BCN Brand. In just three years, the company had
carved out a niche for itself in Spain, the United States, Dubai, Lebanon, France, Japan, Korea,
Germany, and elsewhere.

He remembered how, in mid-2012, it had occurred to him that his ad agency’s logo would look
great on a pair of sneakers. “It would be great to make sneakers in lots of different colors,” he
thought. And that was how it all began. He brought up the idea at home and asked his wife to
look for potential manufacturers. The first 100 pairs were ready by Christmas 2012 and they
flew off the shelves. The next order was for 400 pairs: a single model, for men, in 10 colors.
The initial marketing strategy? Door to door. Caralps put on his backpack and took to the
streets to do his own personal market study. He was interested in presenting his product, seeing
people’s reactions and gathering direct information on possible distributors.

This case was prepared by Sara Sicart, case writer, under the supervision of Professor Xavier Oliver, as the basis for class
discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The case authors
are grateful for the contributions of Ángel Arrese, professor at the University of Navarra. January 2016.

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M-1340-E BCN Brand: Selling Barcelona Around the World

With the help of trade fairs and certain marketing strategies, the company’s growth in just three
years had been spectacular. Not only had it developed an appealing, high-quality portfolio of
products but the turnover was also on a par. In 2014, the company had a turnover of €700,000
and the estimates for the fiscal year 2015 were around €1million, 70% of which originated
abroad. For 2016, the company predicted that the figures would double.

The products took their inspiration from Barcelona, and BCN Brand could manufacture
anything someone from Barcelona with a specific profile might want or need. “Anything?”
Pons asked, surprised. “I have the sense that the possibilities are endless, so long as the brand
image remains intact,” Caralps answered without hesitating. That is how BCN Brand had gone
from those first 100 pairs of sneakers in 2012 to polo shirts, bathing suits, casual clothing and,
finally, motorcycle helmets, sunglasses, leather goods, bridal sneakers and even bicycles and
fire extinguishers. It was all top-quality and with an exquisite design.

Pons was still astonished. “But how did you get from sneakers to fire extinguishers?” he blurted
out, dumbfounded. “Anything is possible with an open mind and a good dose of enthusiasm.
The fire extinguisher isn’t just any fire extinguisher,” Caralps said with a smile as he showed
Pons a few pictures.

Pons preferred to give his friend an honest answer:

“I think it’s really impressive that you’ve built all this in such a short time. On the one hand,
I’m thrilled by your story. But, on the other, I have to confess that as a marketing expert, it
worries me. The way you talk about it shows a mixture of inspiration, instinct and luck,
Pablo, but I honestly think that what you need is a good marketing director.”

The Economic Climate, Competition and Prices

BCN Brand had been founded in 2012 – in the midst of an economic crisis. Given the complex
economic situation in Spain at the time, the domestic market did not seem like the best choice,
and Caralps was aware of this from the beginning: if the brand was successful abroad, it would
be easier to grow in Spain.

In terms of competition, BCN Brand had diversified and its competition was imprecise: to date,
no other clothing brand sold products such as bicycles and fire extinguishers. Caralps’ vision
was special, no doubt. Pons asked his friend if he had ever done a study of the company’s main
competitors and who he considered to be its competition. Caralps answered:

“So far, we haven’t done any real study of the competition. We’ve looked at trends, designs,
prices and distribution strategies, but we haven’t actually done a formal study. You know,
it’s hard to analyze our competition. First, because we’re aiming for a comprehensive
concept: fashion, housewares, beauty, food (currently in development), bedding, fragrances,
a T-shirt line, etc. We also want to start a range of wine and cava. Second, because we’re
looking to occupy a ‘no-man’s-land’ in each sector: a niche where prices are higher than
mass production goods but lower than luxury items. For example, in footwear, our prices
are between €125 and €150, approximately. We’re above the €80 to €90 range of New
Balance and Nike, but below the €200 for brands like Premiata, Armani, Hugo Boss and
Dolce & Gabbana.”

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 BCN Brand: Selling Barcelona Around the World M-1340-E

The same sneakers started at €125 in Spain, €130 in France, €165 in the United States (pending
a sales review and a new strategy) and €228 in Japan. (For more information on the prices of
BCN Brand products in Spain, see Exhibit 2.)

Customers and Products

For BCN Brand, customers and products went hand-in-hand. The products were targeted at
professional urbanites between the ages of 25 and 45 with significant purchasing power.
However, Caralps himself recognized that the company lacked data. In that regard, he claimed
that the store it had opened in Barcelona just a few years earlier worked as its laboratory. Those
in the company knew what it sold, they gauged customers’ reactions and they knew what kind
of customers came into the store. The clerk at the Barcelona store was convinced that nearly 90%
of her customers were foreign, but that was based on the names she saw on their credit cards.

With regard to the company’s products, Pablo explained:

“We put lots of pictures of Barcelona in our brochures. We say that our goal is for our
designs to convey what the city evokes:a fresh, colorful attitude full of life and joy. BCN
Brand means: 1)transmitting the feeling of an eternal summer and 2) exporting the
Barcelona lifestyle.”

Pons interrupted his friend: “But what does that mean? How do you choose what represents
Barcelona and what doesn’t?” Caralps was lost in thought for a few seconds, and then he
answered confidently: “The brand concept was created as we went along, the Barcelona
lifestyle, the urban concept… urban clothing lines. We start with a person, our prototype, and
we think about what that person might use both at home and out around the town.”

But Pons still didn’t understand the move from sneakers to fire extinguishers. Caralps told him:

“So it turns out that there was a fire in a friend’s kitchen and somebody said: ‘We should really
have an extinguisher in the kitchen, but they’re so ugly.’ And that was it.” (See Exhibit 1.)

The company’s first fashion show forced it to expand its product portfolio in the span of less
than three months.1 What could the company get ready quickly and easily? It decided on polo
shirts and bathing suits. Moreover, since it had begun with sneakers, it continued along the
same lines toward a complete look, creating clothing that incorporated shoelaces, playing with
leather and iconic images of Barcelona.2 Based on the city’s brand, the company used obvious
Barcelona-themed prints for its products, including the flower shape from the art nouveau
paving stones and Gaudí’s trencadís mosaic, along with some of the floor tile designs from
apartments in the Eixample district. (See Exhibit 1.) From there, its slogan became: “Pasear
Barcelona por el mundo” (Strolling Barcelona around the world).

In reality, the only limits Caralps had set involved not harming the brand, though he was fairly
reluctant to get involved with perishable goods. However, he already had a design for beer
bottle labels and that he had considered several restaurant possibilities. In fact, when BCN

1 http://www.080barcelonafashion.cat/es/edicions/julio13, accessed November 2015.

2 http://www.stilo.es/2013/07/080-barcelona-fw-bcn-brand-zapatillas-con-sello-barcelona, accessed November 2015.

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M-1340-E BCN Brand: Selling Barcelona Around the World

Brand was registered as a trademark, they registered it, in Caralps’ words, “almost everywhere,
in lots of sectors.”

BCN Brand products had “a heritage touch without being retro.” Regardless of the product,
Caralps always used the same adjectives: exclusive, fresh, relaxed, colorful, modern, elegant,
designer and made in Barcelona. Here Pons once again interrupted his friend: “Do you
manufacture everything in Barcelona?” Caralps explained that the fire extinguishers were made
in France and the helmets in Valencia. Furthermore, in the future, there was the possibility of
more outsourcing, but the designs would always be 100% Barcelona. Caralps always did the
designing himself even though he had never studied design.

Given his specialty, Pons was interested in learning how BCN Brand had evolved. Caralps told him:

“The fashion lines have expanded gradually. BCN Brand started with men’s sneakers. Just
men’s. For no particular reason – essentially because I’m a man and that’s what we started
with, but we gradually came around to the reality of the market. We still sell 70:30 (70%
men and 30% women), but our goal is to gradually shift to 60% women and 40% men,
because women buy a lot more.”

Licensing Contracts
When venturing into the bridal concept, with bridal sneakers (for dancing) adorned with
Swarovski crystals, BCN Brand realized that it was not familiar with the sector – the company
needed to work with someone who knew a lot about weddings. (See Exhibit 1.) Those at BCN
Brand first approached Raimon Bundó because Caralps had a contact at that company and
because most of their sales were also concentrated outside Spain. Raimon Bundó loved the
concept and an agreement was forged: BCN Brand would manufacture the sneakers and they
would be in charge of the jewel detailing, since it was a technique Raimon Bundó already used
in its gowns. The sneakers were launched at Barcelona Bridal Week in May 2014.

Thus, BCN Brand began using licensing contracts as the main tool for expanding its portfolio:
“Licenses help to ‘build product.’ Our licensees are specialized, plus they have distribution down
pat,” Caralps said. BCN Brand began pinpointing lines that could be licensed, products that would
attract attention. That was the case with motorcycle helmets: “In the store windows they look
amazing and, if you sell them, the brand gets carried around the city on people’s heads,” they
said. The idea was born before Christmas 2014, and the prototypes were ready by the following
Christmas, although they didn’t go on sale until the following spring. Caralps stated:

In November 2015 they had agreements with Raimon Bundó for the bridal sneakers; with NZI
for the motorcycle helmets; with Fire Design for the fire extinguishers; with Ossby for the
bicycles; with Lugupell for the leather goods; and with Pegaso Eyewear for the sunglasses.

Licensing was helping the company grow. Certain controls had to be added, but it was entering
new distribution channels and gaining visibility. Some revenue was being lost, but on the other
hand the company wasn’t putting in 100% of the investment.

In any event, the licensing contracts were valid for two or three years. Ifeverything went well,
some of the licenses might be recovered, and if they weren’t taking off they could be let go.

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 BCN Brand: Selling Barcelona Around the World M-1340-E

Distribution
In matters of distribution, BCN Brand had significant unresolved issues. To begin with, Caralps
told Pons that he needed to make a decision about the company’s presence in the department
store El Corte Inglés. When they began back in 2013, Caralps had contacted El Corte Inglés in
Madrid, but BCN Brand wasn’t well known at the time and the response was clear:

“We offer a margin of 2.5 over the recommended retail price. We can offer you the same
retail price but with 3.2 against your margin. Plus zero inventory, financing of receivables
and a 50% share in all discount promotions. We have 97 stores,” El Corte Inglés had said.

El Corte Inglés did any number of promotional campaigns, and a 50% share meant giving up
a lot. The numbers obviously didn’t add up for Caralps, so he made a quick exit. However, a
few months prior to the friends’ conversation in Paris (2015), the department store had called
and accepted the standard sale conditions for BCN Brand: “forget zero inventory, 2.5 and
payment in a maximum of 90 days.”

For the time being, BCN Brand had only entered El Corte Inglés in Barcelona (Plaça Catalunya
and Diagonal). In addition to footwear, the chain also wanted BCN Brand in other departments,
but Caralps wanted his company to have a space of its own so that all the products would be
together in order to convey the brand image.

As far as opening its own stores was concerned, when the company entered the Japanese market
the first thing people wanted to see was pictures of its stores. But there weren’t any stores. There
were pictures of showrooms and kiosks. Finally, an opportunity presented itself and the company
decided that a store could be a good way to learn about retail trends. BCN Brand opened the
store in mid-March 2014 in Barcelona’s Born neighborhood, and the official opening event was
held in May.

The store was located between Santa Maria del Mar and Via Laietana, at number 7 Carrer dels
Canvis Nous, a back street in the heart of the Gothic Quarter, with its gray stone houses, clothes
hanging on clothes lines, and graffiti on the walls. In any event, there were unique, noticeable
brands in the neighborhood. The BCN Brand store actually appeared on the TREND map, a city
map that shows the trendiest restaurants and cultural, design, fashion and art venues.

Until that time, BCN Brand had worked primarily in showrooms and multibrand stores through
licensing contracts, but BCN Brand would not settle for just any store. It looked for special locations
with quality products, design, image and good prices: “My dream is to have a flagship store
somewhere and for our products to be carried in multibrand shops in all the major cities around
the world, but in unique places and stores. In two or three places per city,” commented Caralps.

In addition, working abroad gave BCN Brand financial advantages: “You’re paid what you’re due,
without having to worry about it.” In Spain things were different: “In 2014, we had products at
Gallery Madrid and Gallery Plus, but when the payments stopped we had to cut ties.
Fortunately, we were insured and we managed to get back 80% of what we were owed.”

There was pressure to put more emphasis on the domestic market, but the company’s business
model had run in the opposite direction so far. Many people would say that the usual process
would be to build a strong profile in your home country before venturing abroad. Caralps,

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M-1340-E BCN Brand: Selling Barcelona Around the World

however, seemed more interested in increasing his company’s presence abroad and then
entering the domestic market with a bang. As he saw it, a presence in different places gave the
sense of a globalized market.

For example, beginning in July 2014 Caralps had made several trips to Japan, which had yielded
results: “The first order was delivered in September. It was for a store that’s opening in Tokyo’s
central train station; it’s one of the shopping centers owned by the international chain Takashimaya.
They’ve already placed another larger order for spring-summer.” Looking toward 2016, BCN Brand
also planned to work with large department stores such as Hankyu and chains such as FootMind,
FootPride and Akaikutsu in Tokyo, Osaka, Nagoya, Yokohama and Hakata. An e-platform would
also be launched for the Japanese market. In the United States, however, the company did not want
to spread itself too thin before cementing a presence in certain strategic points. With its entry into
Japan, it was on the right path.

In terms of Internet sales, the company website included an online store where most of the products
in its portfolio could be purchased (see Exhibit 3) within Spain. The website had a section called
“Latest Products,” but for the moment there were no plans to offer special deals or flash sales. The
company had not had much surplus up to that point. When it came to textiles, it worked with digital
printing and could manufacture goods practically on demand. With footwear that wasn’t the case –
there had to be stock, and Caralps confessed to Pons that it was an issue that concerned him.

Marketing and Image

Around April 2013, BCN Brand began working with a Los Angeles agency that collaborated
with U.S. celebrities:

“Fifty-two men and 52 women were contacted. Sixteen men and 25 women responded.
There are two ways of working with celebrities. If you have the financial resources, you can
contact a public figure and, for a fee of €30,000 or so, they’ll tweet a picture of themselves
with your product. That wasn’t the case with us: we opted to send them our products as
gifts and cross our fingers. They have our product and we can say they own it. As far as
whether or not they actually wear it, it’s pretty hard to control. What we do is monitor their
photos on the Internet. It’s more complicated with sneakers, because pictures usually just
show the top half of someone.”

That was how the company worked with Scarlett Johansson and Pau Gasol, among others. As
Caralps talked, he was showing Pons pictures on his iPad. But Pons was frowning; he wondered
whether it was possible to achieve growth using this marketing strategy, whether it was worth
it or whether the results were too small-scale and too volatile. How did they choose who they
wanted to have their products?

Unfazed by his friend’s reaction, Caralps went on to tell him about the company’s next
marketing strategy: trade fairs. In April 2013 he had found out about 080 Barcelona Fashion.3
He knew without a doubt that the company had to start investing in advertising, and 080
seemed like a good opportunity. The platform aimed to provide independent designers with
more visibility and each edition was held in a different venue in the city, using fashion to help

3 http://www.080barcelonafashion.cat/es, accessed November 2015.

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 BCN Brand: Selling Barcelona Around the World M-1340-E

sell the image of Barcelona. It seemed like the perfect fit for BCN Brand, but Caralps
remembered how last-minute everything had been: “We had to fill out all the paperwork really
quickly and provide drawings of the designs (at the time we only had the sneakers). We made
the first cut and they told us to come back in May to present to the jury.”

When the company found out in late May that it would be participating in a fashion show in
July, nothing had been manufactured except the sneakers. Plus, those in the company had no
idea how the fashion world worked. However, the first fashion show was a turning point for
BCN Brand; it provided the company with lots of graphic material and support so it could
venture abroad and give off the sense that the company had a structure behind it.
With that under its belt, the next step was the company’s participation, in the summer of 2013,
in Magic4 (Las Vegas), the most emblematic fashion fair because of its history and because it
is attended by participants from more than 120 different countries. The company paid around
€15,000 for a little stand and made lots of contacts, primarily from Asia. After that it went to
Who’s Next5 in Paris, and then to Los Angeles6 and Miami.7 From those four fairs it landed
another store in the United States.

Until then, BCN Brand had focused on trade fairs, although in Caralps’ words, “Your options
are more limited.” It’s true that there’s a bit of everything at the fairs and they don’t always
bear fruit. “That happened to us at Magic. We sent out a lot of samples but nothing came of
it,” he said. In Spain, aside from 080, the company had also set up at Palo Alto Market and
Expohogar, among other fairs.

In addition, it had launched other marketing initiatives, such as local production and an
explanation regarding the color range of its sneakers: “On the one hand, at the start of a brand
local production is a very important selling point. As far as the colors go, we also built up a
marketing argument around them: blue is for the Mediterranean; yellow, for the Barcelona
sun; gray, for the sidewalks…”

Another strategy involved alliances with similar brands. For example, the company partnered
with Moritz and BCN Gin, both of which were also strongly associated with Barcelona. It also
worked with Ham on Wheels, Euromoda, Bagmovil, Shoko and Tuset&Riera, among others. As
detailed above, strategic alliances with other brands through licensing contracts were also a
way of entering other sectors with hardly any investment.

What Caralps was looking for in his partners was a flawless reputation and compatibility with
BCN Brand’s image and values. As he said, “Every decision affects the brand, either positively or
negatively.”

4 http://www.magiconline.com/, accessed November 2015.

5 http://www.whosnext-tradeshow.com/, accessed November 2015.
6 http://fashionweekla.com/, accessed November 2015.
7 http://www.miamifashionweek.com/, accessed November 2015.

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M-1340-E BCN Brand: Selling Barcelona Around the World

Likewise, the agreements it had made with famous people, especially with models, opened
doors for the company beyond pictures on social media websites. For example, through models
such as Malena Costa and actors such as Maxi Iglesias, the BCN Brand had appeared on TV
programs, blogs, at parties and at other functions.

On the other hand, when Caralps and Pons had first spoken by telephone back in September,
Caralps had mentioned that he had received a proposal for another promotional strategy that
morning: participating in newspaper promotional offers. It was the second offer he had
received. The first time he had flat out refused because he thought it would harm the brand
image. The second time, however, he saw it a bit differently: if it could be done with a product
that hadn’t been released yet, that wasn’t available in stores… maybe it wasn’t such a bad idea
after all. Above all, Caralps was afraid of harming the brand.

Pons now had plenty of information, but before ending the meeting he wanted to know how
BCN Brand imagined its presence on the Internet and social media. The first time Caralps
contacted him, Pons had Googled the company. The first result when he typed in “BCN Brand”
was the family’s communication consultancy. Caralps’ company website, which came up just
below, was associated with the domain Strollinbcn.com and was fairly basic. There were not
very many products. Plus, it was mixed in with the blog, which was not up-to-date. The
company did not seem to be very active on Twitter either and only had 3,223 followers.

Yet Caralps insisted that social media was an important part of his marketing strategy. In fact,
each product came with a postcard thanking the customers for their purchase and for “strolling
Barcelona around the world.” Customers were then asked to share their photos wearing BCN
Brand products via Twitter, Instagram and Facebook. (See Exhibit 4.) The result? Countless
pictures on social media websites, without the need for any investment, and a connection with
customers: “People do some really creative things,” claimed Caralps.

Caralps also announced that the company had just released a new version that was more
dynamic and comprehensive, using the Bcnbrand.com domain and more in line with the brand
image. It had an online store that now carried almost all the company’s products.

Pons asked whether the company had considered following any guidelines for social media or
working with a community manager, and Caralps answered: “Our growth on social media is
organic. We work with guidelines that cover post types and style that help us create the
Barcelona lifestyle, which is what we want to export.”

Time to Think Things Over

After his conversation with Caralps, Pons sat in his office alone, thinking. BCN Brand was moving
on uncertain ground. If it wanted to create a solid foundation for growth, it needed to start
collecting information through a quantitative and qualitative market study, undertaken by a
skilled marketing director, in order to define certain aspects.

One month later, Caralps was headed to the store to take care of a few things when he ran into
his sister in the square in front of the church Santa Maria del Mar and they sat down to have
a glass of wine. He needed to tell her that he’d received the consulting report from Pons and

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 BCN Brand: Selling Barcelona Around the World M-1340-E

that the conclusion was clear: he strongly recommended hiring a marketing director. Caralps’
sister wasn’t convinced, however:

“Pablo, you’re not a standard-issue guy. Everything you’re envisioning takes different skills:
contacts, partnerships, design… If you start bringing outside people into the company you’ll
have to delegate, and then you’ll lose control. The bureaucracy will start up and everything
will be more complicated. How many marketing directors would have let you do what
you’ve done? Now you have four people from your own family who can do a little of
everything. They don’t need a title on a business card. Can’t we follow his recommendations
some other way?”

Caralps thought it over. In order for the company to grow, he would have to make some
concessions and even give up some shares. Suddenly his cell phone rang. He had a message
from his wife: “The sneakers are selling really well in Tokyo and the turnover is great.” Up to
that point his intuition had been spot-on. However, as Pons had said, there was a kind of
marketing that daydreamed and a kind that planned. Did he want to build his company on
something solid or did he want to keep using trial and error? Freedom of movement or careful
planning?

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M-1340-E BCN Brand: Selling Barcelona Around the World

Exhibit 1
BCN Brand Products

Source: Document provided by the company.

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 BCN Brand: Selling Barcelona Around the World M-1340-E

Exhibit 2
Some BCN Brand Products and Prices

Billetero Modelo… Portamonedas BCN Brand… Brave BCN Brand Woody… Extintor De Diseño BCN…
64,95 € 18,50 € 84,00 € 99,00 €

BCN Brand Curve by Ossby BCN Curve Eléctrica by Ossby

Bicicletas Bicicletas
860,00 € 1.495,00 €

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M-1340-E BCN Brand: Selling Barcelona Around the World

Exhibit 2 (Continued)

Casco Eurus BCN Montjuic Casco Rolling BCN Corporative Casco Tonup BCN Skin Casco Zeta BCN Modernism
Cascos Cascos Cascos Cascos
214,00 € 189,00 € 174,00 € 129,00 €

Portamonedas BCN Brand… Billetero modelo… Billetero modelo Gracia Sneakers Púrpura
Billeteros Billeteros Billeteros Sneakers-colección Classics
18,50 € 64,95 € 69,95 € 125,00 €

Source: http://www.bcnbrand.com, accessed November 2015.

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Exhibit 3
BCN Brand Online Purchasing

Source: http://www.bcnbrand.com, accessed November 2015.

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M-1340-E BCN Brand: Selling Barcelona Around the World

Exhibit 4
Postcard Sent With Products

Source: Document provided by the company.

14 IESE Business School-University of Navarra

This document is authorized for use only by Marwan Azouri ([email protected]). Copying or posting is an infringement of copyright. Please contact
[email protected] or 800-988-0886 for additional copies.