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Adaptation by
MM II Term Paper
Lal Bahadur Shastri Institute
of Management
61- Neha Shrivastava
62- Sagar Patel
63- Ritesh Dhundhuani
64- Pragyaa Shree Prasad
65- Sanchit Jain
84- Ratul Nagpal

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Convergence & Marketing
Communication adaptation by MNCs


In a globalised world it makes strategic sense for companies to expand their operations across national
boundaries. They get access to new markets and key resources such as specialized skills, mineral resources
and new sources of information. However the opportunities that comes by their worldwide presence up
need to be converted into competitive advantage. And for this MNCs need to launch to adapt to the right
strategies of marketing communication, build organizational capabilities and manage operations in a
diverse, complex and volatile competitive international arena. Also many markets are converging, as
communication and logistics networks become more integrated and firms from all parts of the world are
expanding operations on a global scale. This purpose of this paper is to study how convergence and
marketing communications are being adapted by MNCs across the globe and examine how this strategy
in marketing works and how well it has been employed by the companies.

Objective: To study how convergence and marketing communication adaptation have been
used by MNCs and how effective it has been for them.
Methodology: This methodology followed for this paper is intensive studying of various business
journals, newspapers and articles which highlight the Adaptation strategies employed by MNCs in
marketing. The study also includes analyzing various articles and visiting websites pertaining to the how
leading MNCs have adopted the global strategies for market communications.

With the ever faster communication,
transportation, and financial flows, the world is
rapidly shrinking. Countries are increasingly
multicultural and products and services
developed in one country are finding
enthusiastic acceptance in others.

Just as the internationalization boom of the
1990s proved instructive with regard to market
assessment, so there is much to be learned from
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the marketing strategies adopted at entry by

western companies in emerging markets. While
most attention has been paid to market entry
mode questions, such as the choice between a
joint venture or a subsidiary, it is notable that
most MNCs made the same assumption about
their marketing entry strategynamely, that
they would replicate the competitive strategy
that had served them well in developed markets,
transferring their developed market brands and

strategies to emerging economies without

The dramatic changes taking place in the global
marketplace thus have important and necessary
implications for the marketing strategies to be
adopted by the leading and other MNCs in the
world. These companies need to reformulate
and reorganize their global marketing strategy
keeping in mind the convergence of marketing
communications and look at a broader aspect.

So this includes trying to develop new initiatives
to stimulate and gain demand in their traditional
markets as well as to introduce new strategies to
target wide range of growth opportunities in
other countries throughout the world. Despite
shifting borders, unstable governments, foreignexchange
technological pirating companies (MNCs) selling
in global industries need to internationalize their

The multinational and the global corporation are
not the same thing. The multinational
corporation operates in a number of countries,
and adjusts its products and practices in each
at high relative costs. The global corporation
operates with resolute constancyat low
relative costas if the entire world (or major
regions of it) were a single entity; it sells the
same things in the same way everywhere.
Which strategy is better is not a matter of
opinion but of necessity. Worldwide
communications carry everywhere the constant
drumbeat of modern possibilities to lighten and
enhance work, raise living standards, divert, and
entertain. The same countries that ask the world
to recognize and respect the individuality of their
cultures insist on the wholesale transfer to them
of modern goods, services, and technologies.
To turn around their business in these markets,
multinationals must in effect reenter the
markets by rethinking their marketing strategy
at two levels:
First, they must embrace a massmarketing mindset. While most MNCs
have lost the mass-marketing
competence that made them huge
corporations in the first place (because
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of the intensified competition and

fragmentation that has developed in
their home markets), this approach is
suitable both for current conditions in
emerging markets. This mindset, which
includes the need for aggressive
attention to price competitiveness,
should be reintroduced as the mediumterm goal of the MNCs in emerging
Secondly, MNCs must develop dynamic
strategies for reaching those mass
markets; in effect, market expansion
strategies that will take them out of the
elite niche.

Convergence is a constant process, not an end
point. Technology, creativity, and media are
constantly evolving, and so is the converged
company. It is a never-ending challenge to adapt
a customer experience that, in our digital age,
will always be in flux. Too often, businesses are
far behind consumers in embracing
technological change, a problem that has
everything to do with how the organization is set

Problem discussion

Within the field of international business
marketing, decision of standardization or
adaptation issue is one of the longest debates.
The differences between MNCs home markets
and the emerging markets in external
environment could make different of
international business marketing strategy and
influence performance of MNCs. As advocated
by Jansson (2007) it is not possible to separate
the world of business from the social side, as for
example the world of politics or ethics.
Therefore MNCs should find out how they must
adjust a business marketing strategy in order to
how adapt convergence and marketing
communications- best fit new market demands,
suit local tastes, meet special market needs.

To be successful and competitive every firm has
to use special policy and strategy for each
market. Positioning of the product and brand,

channels of distribution, types of promotion, and

identification of customer need to be matched in
different markets.

In the last decades, business in general has
increased and most companies have extended
their product offerings across national
boundaries and cultures respectively. The
researchers have also observed that in the quest
to maintain a market share in the escalating
competition in international markets as well as
to realize profits, multinational corporations
(MNCs) are constantly faced with the challenge
to remain economically afloat by deciding which
product strategy to use as they enter and strive
to survive in international markets.


For any MNC to decide to enter into any market

it is important to take into consideration many
factors. These factors or drivers actually
important aspects for the entry of a company
into any new market or strengthen its position in
its existing market

Industry Global Drivers:

There are four broad groups of industry
globalization drivers market, cost, Government
and competition (Table-1 below).

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Together, these four sets of drivers cover all the

major critical industry conditions that affect the
potential for globalization. Drivers are primarily
uncontrollable by the worldwide business.
Each industry has a level of globalization
potential that is determined by these external

How many markets to enter:

The company must decide how many countries
or regions to enter and how fast to expand.
Typical entry strategies are the waterfall
approach, gradually entering countries in
sequence, and the sprinkler approach, entering
many countries simultaneously. Increasingly,
firms especially technology intensive firms- are
born global and market to the entire world from
the outset.

BMW, General Electric, Benetton, Ranbaxy have
followed the Waterfall approach. It allows for
firms to carefully plan their expansion and is less
likely to strain human and financial resources.
Whereas when first mover advantage is crucial
and a high degree of competitive intensity
prevails, the sprinkler approach is adopted.
Microsoft sold over 150
copies of Windows 7 in 100 countries in 2009
with only minor marketing tweaks.

Developed or Developing Markets:

One of the sharpest distinctions in the global
marketing is between developed and developing
or emerging markets. The plateauing growth in
the developed world has resulted in a costly
battle for market share. Driven by a growth
imperative and faced with slackening demand in
traditional markets , firms have been compelled
to increase promotional expenses and innovate
(e.g. developing new products or new product

Deciding how to enter the Market:

Once a company decides to enter a particular
entry, it must determine the best mode of
entry. Its broad choices include:

Indirect and Direct Export:
Companies typically start with export,
specifically indirect exporting, i.e. they work
through independent intermediaries. Domesticbased export merchants buy the manufacturers
products and then sell them abroad.
Domestic-based export agents, including
trading companies, seek and negotiate foreign
purchases for a commission.
Cooperative organizations conduct exporting
activities for several producers often of
primary products such as fruits or nuts- and are
partly under their administrative control. Export
management companies agree to manage a
companys export activities for a fee. Successful
companies adapt their Web sites to provide
country-specific content and services tohighest

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variants) to maintain market position. As a result

many firms are looking for new growth
opportunities the developed world. These
include both large emerging markets such as
India, China and Brazil and second tier emerging
markets referred to as Next 11 such as Indonesia,
Turkey, Egypt, Nigeria, Mexico, the Philippines
and Vietnam.

potential international markets, ideally in the
local language
An international licensing agreement allows
foreign firms, either exclusively or nonexclusively to manufacture a proprietors
product for a fixed term in a specific market.
Summarizing, in this foreign market entry mode,
a licensor in the home country makes limited
rights or resources available to the licensee in
the host country. The rights or resources may
include patents, trademarks, managerial skills,
technology, and others that can make it possible
for the licensee to manufacture and sell in the
host country a similar product to the one the
licensor has already been producing and selling
in the home country without requiring the
licensor to open a new operation overseas.
The licensor earnings usually take forms of one
time payments, technical fees and royalty
payments usually calculated as a percentage of

Joint Ventures:

There are five common objectives in a joint
venture: market entry, risk/reward sharing,
technology sharing and joint product
development, and conforming to government
regulations. Other benefits include political
connections and distribution channel access
that may depend on relationships.[30] Such
alliances often are favourable when:

The partners' strategic goals converge

while their competitive goals diverge

The partners' size, market power, and

resources are small compared to the
Industry leaders

Partners are able to learn from one

another while limiting access to their own
proprietary skills


Any marketing strategy focus on the ideal
product mix to achieve maximum profit
potential. Multinational Corporations must
decide how much to adapt their marketing
strategy to local conditions. At one extreme end
is the Standardized marketing Strategy
worldwide, which promotes cost effective
marketing. Some of the benefits of this program

Economies of scale in production and
Lower marketing costs,
Ability to leverage good ideas quickly
and efficiently,
Uniformity of marketing practices.

At the other extreme is an adapted marketing
strategy in which the company, consistent with
the marketing concept, believes consumer
needs vary and tailors marketing to each target

Consumer behavior may reflect cultural and

social differences that can be pronounced across

Hofstede identifies 4 cultural dimensions that
can be used to differentiate countries and

Individualism versus Collectivism: In
collectivist societies, the self-worth of an
individual is rooted more in the social
system than in individual achievement.
(High Collectivism: Japan; Low: USA)

High versus low power distance: High
power distance cultures tend to be less
Masculine versus Feminine: This factor
measures how much the culture is
dominated by assertive males versus
nurturing females. (High Masculinity:
Japan, Low: Nordic Countries)

Weak versus strong uncertainty
avoidance: This dimension defines the
risk taking ability of the society as a

Consumer behavior difference as well as
historical market factors leads to marketers to
position brands differently in various different

For example:
- Heineken beer is a high-end super-premium
offering in the United States but a middle
product in the Dutch market.
- Also the Toyota Camry is the essential middle
class car in the United States but is at the highend in China.

International strategy scholars have observed
that all MNCs do not follow similar strategies.
For ease of understanding the model below
explains the pre-dominant strategies followed
by different MNCs.

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The European MNCs followed the Multinational


- Focuses primarily on one of the different means
national differences to achieve most of its
strategic objectives.
- Focus is on revenue side, by differentiating
their products & services in response to

The US MNCs followed the International

- MNCs headquartered in large technologically
advanced countries adopted this strategic
approach to exploit home-country innovations.
- Centralize those resources that are key to
developing innovations;
- Go where locals dont have your skills. Power
systems, Airplanes, specialized machinery and
other Hi-tech equipment.

The Japanese MNCs followed the Global

- Utilizes product standardization. Products like
watches, music systems, PCs and cameras are
global products. Assuming that the consumer
looks for functionality, quality and low cost only.

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customer needs, industry characteristics & Govt.

- Subsidiaries depend on local-for-local
innovations, a process to identify local needs and
use its own resources to respond to those needs.

- Best use of experience curve and high

- This is the low cost strategy that depends
primarily on developing global efficiency.
Transnational strategies are not country

- Core competencies can develop in anywhere of
the firms worldwide operations.
- Flow of skills & product offerings occur
throughout the firm. (Global learning)
- Makes sense where there is pressure for both
cost reduction & local responsiveness
- Focuses on management of costs & revenues
simultaneously with efficiency and innovation
both important.


Developing global product strategies requires

knowing what types of products or services can
be easily standardized and appropriate
adaptation strategies.


The first view is the standardization standpoint

(as proposed by Jain, 1989; Levitt, 1983).
According to these authors, supporters of
standardization believe that there is a union of
cultures with similar environmental and
customer demand around the globe. They argue
that trade barriers are getting lower and those
technological advances and firms are displaying
a global orientation in their strategy. As they
believe, creating one strategy for the global
market and standardizing the marketing mix
elements can achieve consistency with
customers as well as lower costs.
Levitt (1983) argues that companies that are
managed well have moved away from
customizing items to offering globally
standardized products that are advanced,
functional, reliable and low priced. According to
him, companies can achieve long-term success
by concentrating on what everyone wants rather
than worrying about the particulars of what
everyone thinks they might like.

Standardization and international uniformity has
many advantages. For one, people can expect
the same level of quality of any specific brand
anywhere around the world. Standardization
also supports positive consumer perceptions of
a product (Products and International
Marketing, n.a). If a company enjoys strong
brand identity and a strong reputation, choosing
a standardized approach might work to its
benefit. Positive word-of-mouth can mean an
increase in sales around the globe.
Another advantage includes cost reduction that
gives economies of scale. Selling large quantities
of the same, non-adapted product and buying
components in bulk can reduce the cost-perunit.

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Examples of Standardization of product:

Consider the cases of Coca-Cola and Pepsi-Cola,

which are globally standardized products, sold
everywhere and welcomed by everyone. Both
successfully cross multitudes of national,
regional, and ethnic taste buds trained to a
variety of deeply ingrained local preferences of
taste, flavor, consistency, effervescence, and
aftertaste. Everywhere both sell well.

Cigarettes, too, especially American-made, make
year-to-year global inroads on territories
previously held in the firm grip of other, mostly


Warren Keegan has distinguished five product
and communications adaptation strategies:

Straight Extension: It introduces the product
in the foreign market without any change.
Tempting because it requires no additional R&D
promotional modification, its been successful
for cameras, consumer electronics and many
machine tools. In some other cases it can be a

Product adaptation: This strategy alters the
product to meet local conditions or likings and
preferences. Flexible manufacturing enables to
do so in several ways.

A company can produce a regional version of its
product, for example, such as a Western
European version. Finnish cellular phone
superstar Nokia customized it 6100 series phone
for every major market.
Alternately, a company can produce a country
version. Kraft blends different coffee for the
British and for the French.
A company may also produce different retailer

Product Invention
Backward Invention: this strategy reintroduces
earlier product forms well adapted to a foreign
countrys needs and wants.
Forward Invention: It creates a new product to
meet the need in another country.


Changing marketing communication based on
each of the local market is a process called
Communication Adaptation. We can have 5
numbers of strategies revolving around
adaptation considering both the product to be
marketed and also the communication strategy
to be adopted.

1. Product and Communications Extension
Dual Extension:
At one extreme, a company might choose to
market a standardized product using a uniform
communications strategy. Early entrants in the
international arena will often opt for this
approach. Also, small companies with few
resources typically prefer it.
Dual extension might also work when the
company targets a global segment with similar
needs. E.g. The Japanese firm, Shiseido, the
worlds sixth-largest cosmetics company by sales
volume, sells in Europe, the Americas and across
the Asia- Pacific, including Australia and New

2. Product Extension Communications
Because of differences in the cultural or
competitive environment, often the same
product is used to offer benefits or functions that
dramatically differ from those in the home
market. These differences between the foreign
and home market drive companies to market the
same product using customized advertising
E.g.: Clothing Company Levis uses this approach.
Although the famous Levis brand name carries
clout in many parts of the globe, and the basics
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Steps in Product invention:

1.Define your product
2.Define your market
3.Define the business
4.Identify major driver pushing your product.

such as manufacturing and distribution are

pursued by Levis relatively uniformly, there are
wide differences in its communication strategies
within different markets.

3. Product Adaptation Communications
Alternatively, firms might adapt their product
but market it using a standardized
communications strategy. Local market
circumstances often favor the case of product
adaptation. Another source for product
adaptation is the companys expansion strategy.
Many companies add brands to their product
portfolio via acquisitions of local companies.

E.g.: British Petroleum- BP delivers a series of
adapted energy products in more than 100
countries (e.g., different formulae of petrol to
meet each countrys unique regulations).
However, the core brand values remain almost
identical and the communication strategies and
commercials are very similar in each market. The
logo and most visible aspects of BP are markedly
consistent in most countries.

4. Product and Communications Adaptation
Dual Adaptation:
Differences in both the cultural and physical
environments across countries call for a dual
adaptation strategy. In such circumstances, the
most viable option for international expansion is
adaptation of the companys product and
communication strategy.

E.g.: Kelloggs Pop-Tarts were a huge failure in
Great Britain for two reasons, one, very few
homes had toasters and second, Pop-Tarts were
too sweet tasting for the British pallet. Kelloggs

would have to adapt their product for a market

that lacked toasters and change the product to
make it less sweet.

5. Product Invention:
Genuinely global marketers try to figure-out how
to create products with a global scope rather
than just for a single country. Instead of simply
adapting existing products or services to the
local market conditions, their mindset is to zero
in on global market opportunities.

E.g.: Black & Decker is a good example of a
company that adopts the product invention
approach to international market expansion.
Black & Decker aims to bring out new products
that cater to common needs and opportunities
around the world to manage its global product
development process.


Since its introduction to the world of ICT in the
1970s, the term convergence has come to
mean something different to just about
everybody you ask: fixed and mobile, voice
and data, access devices, media and
entertainment, unified communications . . .
the list goes on and on. Too many people,
however, consider convergence a technology
issue and overlook the wider business
implicationsincluding its impact on marketing
and, in particular, digital marketing.

Commercial Implications

At the customer level, convergence will force the
CIO to reconsider the supply chain and the
organizations sourcing strategy. Network- and
application-level convergence will also change
the needs and behaviors of the end users, driving
a change in technology requirements.
Suppliers will have to address these changing
customer requirements, but theyll also want to

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How to address the doors that have

been opened to new entrantsand new
The increasing need for systems to be
The CIOs need to address the strategic
drive for improved productivity and cost

Providers will obviously need to be aware of the
increasing threat of new entrants as all
technology players make a move for the services
space. Add to this the fact that the digital
revolution is fuelling disintermediation and
substitution in all areas, and youll need to
consider what this means for your portfolio,
pricing, and sector strategies. In addition to
ensuring that your value proposition addresses
the changing role of the CIO, you may also have
to work much more closely with organizations
that are also or have previously been your

These "five C's" are areas in which some of the
most interesting new "fusion" concepts can be
customized and standardized offerings
and messages
CommunityConvergence of virtual
and physical communities
ChannelsSeamless convergence of
call, click, and visit
Competitive valueConvergence of
new and traditional competitive value
equations and pricing models
Choice toolsConvergence of new
search engines and decision tools for
consumers and company-provided

These are areas in which new technologies and
systems create opportunities for customers to
do things they could never do before, but they
are also areas in which customers are creatively
combining the old with the new to create a
fusion. Most of the initial discussion of these
topics over the past few years has focused on

what consumers can do in these areas employing

new technologies.

Convergence can also create a merged market
were a product was once considered a
commercial product is now blurred into a
consumer/commercial product. For example
the personal computer (PC) is now both a
consumer product and a commercial product. At
the lower-end of its price/performance curve is
focused on the home PC market and the higherend is focused on commercial products like
servers and workstations. The converging
technology will cause a threat of product
substitutes to a firm. As the railroads
experienced with the advent of the automobile
and airplane or the film photography
experienced with the advent of the digital



As managers become more mobile and move
across national borders from one country to
another, increasing cultural diversity in their
outlook creates greater interests and sensitivity
to culturally and economically diverse market
opportunities. The spread of communication
links between and within countries and regions
and proliferation of the technology has further
facilitated the firms ability to develop market
knowledge competencies in relation to
customers, competitors and suppliers as well as
the market and institutional infrastructure.
Hence there is abundance of opportunities for
the leading MNCs to make use of these
technology, gain more insights into the
convergence of tastes, preferences, wants of
customers and thereby develop their marketing
communication strategies and also decide how
to use Marketing Adaptation.

We already have a lot of MNCs using the
convergence in their marketing communication
adaptation strategies. A few examples are
mentioned below:

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McDonald's and the Marketing Mix :

One company that has managed to highlight the
benefits of both the standardized and
adaptation approach is McDonalds. With more
than 33,500 restaurants in 119 countries the
company skillfully manages its franchise model,
delivering a remarkably consistent customer
experience and branding (Im lovin It) while still
allowing for locally relevant menu and service
variations in segments across the globe.
Furthermore, all advertisements are shot in 12
different languages, featuring the customized
products catered to each region. In 2003,
McDonald's introduced the McArabia, a
flatbread sandwich, to its restaurants in the
Middle East.
It also introduced the McVeggie in India and the
EBI-Fillet-O shrimp burger in Japan.


Gillette has sold variations on its razors and

blades, including versions geared to women


Apple computers highly successful Mac vs. PC

ad campaign featured two actors bantering. One
is Hip (Apple) and the other is nerdy (PC).
Apple dubbed the ads in Spain, France Germany
and Italy but chose to reshoot and rescript for
the United Kingdom and Japan two important
markets with unique advertising and comedy
cultures. The UK ads followed a similar formula
but used two well known characters and
tweaked the jokes to reflect the British humor.
Whereas the Japanese ads avoided direct
comparisons and were more subtle in tone.

LG: Third Time Lucky:

After two failed joint ventures, it made a re-

entry into the Indian market in 1998 all by itself.

LG began with a rapid national roll-out, mass
communication and products adapted
specifically for Indian markets. It used product

customization to suit the needs of Indian

consumers and gained lots of profits.


When Hyundai came to India in 1998, with a

name prone to mispronunciation and virtually
no, it signed up Shah Rukh Khan to educate the
consumers about the brand. Behind the scene,
the company resorted to extensive market
studies and technical camps before coming up
with its first offering, Santro. To date, Hyundai
has stayed true to its strategy and played by the
conventional Indian market rules to tailored to
suit its specific targets.

KELLOGGS: From tasteless to tasteful

Kelloggs is one of the most successful Global
brands from U.S. which was worlds leading
producer of cereal and convenience foods. It is
hugely popular breakfast cereal brand that is
being sold in 160 countries with sales turnover of
over $9 billion. On its initial entry into the Indian
market, it used similar marketing mix which it
had been using in other Global markets

When Kelloggs first entered India in 1994, it
heavily bet on transforming the Indian breakfast
cereal market through switching breakfast
habits of Indian consumers who were used to
hot breakfast foods. The company wanted the
Indian consumer to change its traditional habits
of having either Idli Dosas or Paranthas in their
breakfast and these habits too varied from
region to region with the northern region
preferring Paranthas and southern region
preferring Idlis, and Vadas etc. and the western
region preferred alternatives like Poha


Despite all these setbacks faced by company,

Reebok eventually came out as a winner in the

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Indian market with a 53 percent market share of

the branded sportswear market with an
estimated size of Rs. 3500 crore per annum.
Reebok as a brand enjoys total brand recall in
Indian market and it is available at the lowest
price point starting from Rs. 990 per pair which
helped to establish the brand as a mass market
brand for the Indian market. The brand has got
more than 300 stores to cater to the lower end
of the market offering close to 80 SKUs for
under Rs. 2590. The company to grow further
added a lot more of product lines and SKUs for
adults, kids, teenagers and even females so that
it could grow its market.
It has launched a lot of sub brands in the Indian
market named Easytone, Fish Fry, and separate
range for kids, women and senior citizens
keeping in mind the different requirements of
these different kinds of consumers.
Reebok also now has come up with latest
technology shoes called Reezig its energy
Running shoes for health freaks. It is
communicated on the television as fitness freak
shoes positioning it like that during marketing


In summary, it is important to note the

converging status of consumers all around the
world and their changing preferences. Every
company be it a MNC or a domestic company, in
its aim to deliver the best value to its customer
should take into consideration the latest
technological advancements and plan their
marketing communication effectively. They
should wisely decide which adaptation strategy
to use so that in the long run it fetches them the
most profitable business.



1. Marketing Management By Kotler, Philip;Keller, Kevin Lane; Koshy, Abraham & Jha, Mithileshwar.

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