Building Partnering Relationships

Building Partnering Relationships

True / False Questions

1. Although each of the eras of the evolution of personal selling is associated with a particular time period, all of the various roles for salespeople still exist.
TRUE

2. Value is measured the same way for both buyers and sellers.
FALSE

3. For consumers, value equals selling costs minus the selling price and effort.
FALSE

4. The sum of the purchases a customer makes over their entire life is equimarginal value of a customer.
FALSE

5. The market exchange is the highest level of long-term relationship that a buyer and seller can commit to.
FALSE

6. Customer satisfaction occurs when the buyer’s expectations are met and needs fulfilled.
TRUE

7. Relational partnerships are created explicitly for the purpose of uncovering and exploiting joint opportunities.
FALSE

8. The typical goal for market exchange selling is to maximize lifetime customer relationships.
FALSE

9. Boundary-spanning employees are only needed in the early stages of the development of the buyer-seller relationship.
FALSE

10. Supplier relationship management uses existing vendor relationships to cultivate new vendor relationship.
FALSE

11. Lead users face and resolve problems after the rest of the marketplace has addressed these needs.
FALSE

Multiple Choice Questions
12. A(n) ___________ profit is the selling price minus cost of goods sold and selling costs.
A. economic
B. seller’s
C. production
D. buyer’s
E. partnering

13. A(n) ___________ profit is the selling price minus cost of the product and time and effort needed to purchase it.
A. economic
B. seller’s
C. production
D. buyer’s
E. partnering

14. Another name for a buyer’s profit is:
A. value
B. barter
C. CRM
D. a market exchange
E. trust

15. The Internet often increases buyer’s profit through
A. economic competence
B. strategic supply chain management
C. production efficiency
D. reduced costs of shopping
E. ecological partnering

16. Gerry’s company brought in the top performing salespeople and studied their sales presentations. Using the information gathered, the company developed a(n) _____________ for all salespeople to use without deviation.
A. customized variable presentation
B. automatic rebuy promotion
C. canned sales pitch
D. exploratory sales pitch
E. win-win presentation

17. During which stage in the evolution of personal selling was the role of the salesperson to serve as provider?
A. marketing
B. sales
C. production
D. growth
E. partnering

18. During the production era, the primary activity for salespeople was to:
A. persuade people to purchase products
B. match available offerings to buyer’s needs
C. promote long-term relationships with customers
D. take orders and deliver goods
E. prospect for potential buyers

19. During the _____ era of the evolution of personal selling, the role of salespeople was to aggressively convince buyers to buy products.
A. marketing
B. sales
C. production
D. maturity
E. partnering

20. The aggressive, arm-twisting, customers’-wants-don’t-matter style of selling that created some of today’s negative images of the selling profession is most closely associated with which era of the evolution of personal selling?
A. marketing
B. sales
C. production
D. decline
E. partnering

21. Bonnie’s Doughnut Factory produces a variety of breakfast sweets like those frequently sold at convenience stores. Drivers from Bonnie’s sell the snacks on established routes all over the tri-state area. Since the company professes to have a relationship marketing philosophy with its customers, we should expect which employees to be oriented toward providing customer satisfaction?
A. the route drivers (sales force)
B. the route drivers plus the advertising department
C. everyone who works at Bonnie’s
D. the marketing department
E. all employees who come in direct contact with customers

22. During the _____ era of the evolution of personal selling, salespeople took on the role of problem solver and became responsible for identifying the customers’ needs and demonstrating how their products would satisfy those needs.
A. marketing
B. sales
C. production
D. growth
E. partnering

23. In the _____ era of the evolution of personal selling, salespeople are value creators who work with their customers and their company to develop outcomes that enhance the profits of both firms.
A. marketing
B. sales
C. production
D. growth
E. partnering

24. The primary objective of the partnering-oriented salesperson is to:
A. create a market-exchange relationship
B. develop long-term relationships with customers
C. close the sale quickly
D. act ethically when dealing with international customers
E. satisfy the short-term needs of the supplier

25. Which of the following statements about the partnering stage of the evolution of personal selling is true?
A. In this stage, salespeople do not expect the customer to be as committed to the relationship as they are.
B. The role of salespeople at this evolutionary stage is to serve as order takers.
C. The objective of the salesperson during at this evolutionary stage is to develop a long-term relationship with customers.
D. Salespeople can expect considerable discussion about short-term problems in a company that has reached the partnering stage of its evolution.
E. All of the above statements about salespeople in the partnering stage are true.

26. Each of the two major soft drink companies know approximately 40 percent of consumers always buy their company’s products, without consideration of alternatives or price. Consumers who purchase their product out of habit are ___________ loyal.
A. attitudinally
B. behaviorally
C. customarily
D. dependably
E. strategically

27. For many years thousands of loyal fans followed the Grateful Dead around the country, rarely missing a concert. These fans, known as “Dead Heads” were ___________ loyal.
A. attitudinally
B. behaviorally
C. customarily
D. dependably
E. strategically

28. Universities constantly send information, promotions and solicitations to their graduates, even recent graduates who are unlikely to make major donations to the school. Universities know if they can create loyalty, the _______________________ or sum of graduates’ purchases and donations over their entire life can be considerable.
A. average return on investment
B. behavioral loyalty return
C. customer selling value
D. donor gratitude endowment
E. lifetime customer value

29. Which of the following transactions can occur without the buyer and seller having a relationship?
A. Beverly purchases a pair of sandals from a retail sales clerk
B. Leon buys a vacuum cleaner from a door-to-door salesperson
C. Art acquires a new Volvo from a car dealership
D. Ursula hires a weekly diaper service
E. No sale can take place without some buyer-seller relationship being established

30. In which type of salesperson-customer relationship will the time horizon be the shortest?
A. market exchange
B. functional relationship
C. straight rebuy exchange
D. partnering relationship
E. modified rebuy exchange

31. The nature of the relationship between the salesperson and his or her customer in a strategic partnership can be described as:
A. competitive
B. bargaining
C. short-term
D. conflict
E. coordination

32. Which of the following statements about functional relationships is true?
A. The sole benefit of functional relationships is short-term profit.
B. Functional relationships are a type of partnering relationship.
C. The relationship between the buyer and the salesperson in a functional relationship is described as cooperative.
D. The typical time horizon in a functional relationship is short term.
E. All of the above statements about functional relationships are true.

33. As Azi traveled across the state of Tennessee, he stopped and bought gas, a soda and a bag of corn chips at a small convenience store that he will probably never visit again. Azi engaged in a:
A. market exchange
B. functional relationship
C. straight rebuy exchange
D. partnering relationship
E. modified rebuy exchange

34. The two types of market exchanges are:
A. functional and strategic relationships
B. tactical and behavioral market exchanges
C. solo market exchanges and functional relationships
D. tactical market exchanges and profit relationships
E. one-sided relationships and bipartisan market exchanges

35. Which of the following is the BEST example of a solo market exchange?
A. Jimmy buys a new suit from a tailor who visits his offices quarterly
B. Mariah purchases a bag of corn chips from the convenience store nearest to her home
C. After the flood damaged his home in Des Moines, Jon hired a waste management company to haul away the rotten carpeting in front of his house
D. Sunil purchases a service contract from a cleaning company, which will clean his home one day a week
E. On his way home from calling on a new prospect who was unwilling to buy, Fred stopped to talk to his insurance agent about additional life insurance

36. For the customer, _____ is the critical issue in a market exchange.
A. price
B. product novelty
C. profit
D. promotion
E. distribution

37. _____ are long-term market exchanges in which the buyer purchases out of habit or routine.
A. Strategic partnerships
B. Tactical relationships
C. Relational partnerships
D. Functional relationships
E. Routine partnerships

38. Without _____________, behavioral loyalty cannot develop.
A. strategic likeability
B. tactical training
C. relational dissolution
D. customer satisfaction
E. Routine purchasing

39. Corina almost always shops at Gas-N-Go. She finds it to be easy to access from the highway, likes the people and receives special discounts as a frequent customer. Corina is less likely to shop around for her next purchase because Gas-N-Go has reduced the hassle, thereby:
A. reducing the gas station’s profit margin
B. maximizing Corina’s solo exchange profit
C. increasing Corina’s buyer’s profit
D. replacing a functional relationship with a boundary-spanning customer satisfaction investment
E. producing an exploratory relationship

40. Franco raises fish as a hobby. For the last nine years he has gone to Fins-to-You, a local pet store that specializes in tropical fish and aquarium supplies for all of his needs–from fish food to aquarium heaters to replacement fish. Which of the following terms best describes the relationship Franco has with Fins-to-You?
A. strategic partnership
B. tactical relationship
C. relational partnership
D. functional relationship
E. routine partnership

41. Every third Wednesday in the month, LuEllen’s Barbecue Shack orders four pick-up truckloads of hickory for slow-cooking the meat. She always orders from Samson Wood Products Company because they deliver on time and she likes the quality of the wood. Since both parties act like close friends rather than business acquaintances, this exemplifies a(n):
A. functional relationship
B. relational partnership
C. utilitarian relationship
D. hierarchical relationship
E. buyer-seller alliance

42. Which of the following statements about functional relationships is true?
A. Buyers and sellers are both concerned about the welfare of the other party.
B. Price is of low concern for both buyer and seller in a functional relationship.
C. Functional relationships are examples of win-win partnerships.
D. Functional relationships continue as long as the customer is satisfied.
E. In a functional relationship, both the buyer and the seller have a long-term commitment to the relationship.

43. Research indicates that as long as a buyer is ___________________, switching is unlikely.
A. striving to make more money
B. satisfied with the supplier’s performance
C. unable to exert pressure on suppliers to reduce price
D. finds the supplier likable
E. all of the above

44. The two types of partnerships between buyer and seller are called:
A. functional and mutual
B. tactical and strategic
C. cognitive and affective
D. relational and strategic
E. tactical and functional

45. Hugh is a salesperson who primarily stocks the DVDs and compact disks at convenience stores. His primary role in the functional relationships he has set up with store buyers is to:
A. sell on the basis of product quality
B. sell as much as he can to each buyer
C. ignore the price element of the marketing mix as a selling point
D. ignore his competition
E. make sure the buyer has no reason to go and look for a new supplier

46. For which of the following transactions would a functional relationship between the buyer and seller be LEAST appropriate?
A. An apartment complex owner’s procurement of 80 gallons of paint for the once every three year repainting of all buildings in the complex
B. A dentist’s purchase of dentures, plates, and other mouth apparatus from a dental lab where they are made
C. A commuter’s purchase of a daily newspaper to read on his ride to work
D. A job foreman’s purchase of lubricating oil for an assembly line
E. An interior decorator’s purchase of a cellular phone

47. A _____ partnership will occur when buyer and seller have close personal relationships that allow them to communicate effectively with each other.
A. hierarchical
B. functional
C. mutual
D. transactional
E. relational

48. Caitlin Gold has sold business textbooks for seventeen years. She makes it a point to try to create a personal relationship with her customers. When a committee of professors selected a new marketing book, her book was one of the three finalists. Because the committee chairperson considered herself a close friend of Gold, she convinced the committee to select Gold’s text over the other options. The committee chairperson trusted Gold to provide a good text at a fair price. This is an example of a:
A. relational partnership
B. functional partnership
C. transactional relationship
D. transformational partnership
E. strategic partnership

49. _____ are the long-term business relationships in which the partners make significant investments to improve the profitability of both parties in the relationship.
A. Strategic partnerships
B. Win-lose partnerships
C. Functional relationships
D. Hierarchical partnerships
E. Buyer-seller alliances

50. A few years ago, the salesperson for a glass bottle manufacturer suggested to the H.J. Heinz Company that it needed to redesign its catsup bottle to improve yields on the bottle-filling line and to make the bottle lighter. Because Heinz’s purchasing agent and the salesperson for the glass bottle manufacturer were engaged in ____, Heinz readily implemented the salesperson’s suggestions and saw increased savings.
A. reciprocal partnership
B. buyer-seller alliance
C. strategic partnership
D. win-lose partnership
E. hierarchical relationship

51. Strategic partnerships are created to:
A. get lower prices
B. make more immediate sales
C. create a negotiation platform
D. uncover and exploit joint opportunities
E. persuade both parties that each will get “the bigger piece of the pie”

52. Which of the following statements about the relationships between buyers and sellers is true?
A. There are long-time, win-win horizons in functional relationships.
B. There is a high level of coordination in strategic partnerships.
C. The potential benefits of a transactional relationship are high.
D. Concern for the other party is highest in relational marketing.
E. Trust is lowest in a strategic partnership.

53. Philips Electronics is the only supplier of Toyota auto headlamps. Because of their ____, Toyota was able to develop further its just-in-time inventory management system and Philips was able to institute a total quality management approach to its production and acquire more business from other Japanese car manufacturers.
A. reciprocal partnership
B. buyer-seller alliance
C. strategic partnership
D. tactical partnership
E. hierarchical relationship

54. Zeller’s, a 205-store Canadian discount store, owes much of its success to its ability to develop _____ with its vendors. It has developed cross-functional teams with experts from the retailer and from its vendors. These teams work together to develop information systems to improve relationships between the vendor and Zeller’s and to develop promotions tailored to help both the vendor and the retailer sell more.
A. relational partnerships
B. buyer-seller alliances
C. strategic partnerships
D. win-lose partnerships
E. hierarchical relationships

55. Which of the following statements about strategic partnerships is true?
A. Strategic partnerships are not found anywhere outside the U.S.
B. Strategic partnerships are created for the purpose of uncovering and exploiting joint opportunities.
C. Strategic partnerships typically have a shorter time horizon than functional relationships.
D. Strategic partnerships have lower levels of risk than functional relationships.
E. The strategic partnership can best be described as competitive.

56. Strategic partnerships do not necessarily mean __________________ for either buyer or seller.
A. mutual customers exploration
B. discretionary spending
C. exclusivity
D. functional literacy
E. lead user confirmation

57. Which of the following serves as a foundation for a successful, long-term relationship?
A. mutual trust
B. organizational support
C. shared goals
D. open communication
E. all of the above

58. Which of the following serves as a foundation for a successful, long-term relationship?
A. autocratic leadership
B. a profit-orientation
C. a simple, easy-to-sell, commodity-type product
D. shared goals
E. all of the above

59. The key to the development of successful, long-term customer relationships is:
A. the existence of trust between the two parties
B. the availability of resources
C. an innovative idea
D. similarity of mission statements
E. similarity of organizational structures

60. Corning’s Erwin, New York plant produces ceramic parts. Since entering a strategic partnership with a cardboard box manufacturer, it has saved about $10 million, and the box manufacturer has tripled its sales. According to the text, one of the reasons a long-term relationship like this would survive for so long is the:
A. existence of trust between the two parties
B. availability of resources
C. an innovative idea
D. similarity of mission statements created by the two companies
E. similarity of organizational structure used by the companies

61. Baxter Healthcare is a leading supplier of hospital products. It has entered into a strategic partnership with many of the hospitals it serves. Baxter supplies them with one-day delivery service of quality products and inventory management assistance. In return, the hospitals give Baxter all of their business. The foundation of their relationships is trust, which is based on:
A. a perceived dependability
B. the ability to supply quality products on one-day’s notice
C. concern for each other
D. inventory management expertise
E. all of the above

62. When salespeople and buyers trust each other, they:
A. are more likely to monitor each other’s daily activities
B. find more opportunities available to take advantage of each other
C. communicate more efficiently with each other
D. seldom achieve mutually beneficial outcomes
E. do not engage in risky behavior

63. When salespeople and buyers trust each other, they:
A. are more willing to share ideas
B. communicate more efficiently
C. assume that each party will be honest with the other one
D. assume there is no need to constantly monitor the activities of the other
E. are described by all of the above

64. Trust in a buyer-seller relationship develops from a combination of five factors. Which of the following is NOT one of those factors?
A. dependability
B. honesty
C. likeability
D. obstinacy
E. competence

65. Zero Zone, Inc. manufactures and sells display refrigeration and freezer units to supermarkets. The manufacturer is successful because it is able to make promises like its all-steel construction with 3-inch thick CFC-free urethane insulation is the thickest in the industry and keep them. All customers know that Zero Zone’s salespeople and its products live up to all the promises made. This is an illustration of which factor necessary for mutual trust to develop?
A. dependability
B. sales orientation
C. likeability
D. flexibility
E. competence

66. Zero Zone, Inc. manufactures and sells display refrigeration and freezer units to supermarkets. When its salespeople use federal government research information and trade data to explain to customers why 3-inch thick CFC-free urethane insulation is important for keeping products fresh, the salesperson is demonstrating which factor used to develop mutual trust?
A. dependability
B. honesty
C. likeability
D. flexibility
E. competence

67. Zero Zone, Inc. manufactures and sells display refrigeration and freezer units to supermarkets. When the supermarket manager called one of Zero Zone’s salespeople and told him that his Zero Zone rear load refrigeration display unit needed to be defrosted about three times more than was normal, the salesperson immediately cancelled his dinner plans and drove to the market. There the salesperson worked for two hours installing a new oversized coil to fix the problem. This example illustrates which factor needed for the development of mutual trust?
A. dependability
B. honesty
C. likeability
D. a customer orientation
E. competence

68. Which of the factors used to develop mutual trust between a buyer and a seller is LEAST important?
A. dependability
B. honesty
C. likeability
D. a customer orientation
E. competence

69. The salesperson for Spectrum Pool Products sent the buyer for a chain of store that was one of his biggest customers a newspaper clipping of the buyer’s son showing the boy after he hit a grand slam in a Little League game and a congratulatory card. Which of the following factors involved in developing trust would be most affected by this gesture?
A. dependability
B. honesty
C. likeability
D. a customer orientation
E. competence

70. Common goals:
A. are important for the establishment of a strategic partnership
B. help to sustain a strategic partnership when the expected benefits are not realized
C. give both members of the strategic partnership a strong incentive to pool their resources
D. allow partners in a strategic relationship to focus on opportunities rather than arguing about how profits are divided between them
E. are accurately described by all of the above

71. Common goals:
A. are important for all market exchanges
B. inevitably cause a strategic partnership to terminate when expected benefits are not realized
C. give both members of the strategic partnership a strong incentive to pool their resources
D. often cause partners in a strategic relationship to argue about how resources are used and profits are divided up
E. are accurately described by all of the above

72. Which of the following statements about the effects of a successful buyer-seller relationship on organizational structures and cultures is true?
A. Only the organizational structure of the seller needs to change for a successful partnering relationship to be implemented.
B. It is difficult to create and maintain organizational culture that will facilitate the implementation of a partnering relationship.
C. Organizational cultures are unaffected by partnering relationships.
D. Organizational structures are unaffected by partnering relationships.
E. Only the organizational structure of the buyer needs to change for a successful partnering relationship to be implemented.

73. Jenkins is a new sales rep for Aber technology. His company has developed a series of sophisticated programs in conjunction with another company. He learns these _____________ are specific to the relationship with the other company and cannot be easily transferred to another project he would like to work on.
A. in-kind services
B. market exchanges
C. functional resources
D. mutual investments
E. win-win trusts

74. Carla’s responsibilities include customers, vendors, and finance. Carla is a(n):
A. strategic sales rep
B. boundary-spanning employee
C. customer relationship manager
D. solo exchange monitor
E. behavioral loyalty specialist

75. Which of the following is NOT a phase of relationship development for a seller and a buyer?
A. awareness
B. exploration
C. commitment
D. attraction
E. expansion

76. The salesperson for Fashion Seal Uniforms is telling the owner of fifteen retirement homes how important it is that caregivers have clean and attractive uniforms that will withstand countless hot water washes. The salesperson has brought several styles of uniforms that have been washed hundreds of times to show how well his company’s uniforms are made. The owner of the retirement homes tells the salesperson that she is planning on opening one new center every six months for the next ten years and will need a lot of uniforms. Then the owner agrees to buy six, but with no commitment to extend the relationship. This is an example of which stage of the relationship development process?
A. awareness
B. exploration
C. commitment
D. attraction
E. expansion

77. Bobbi is creating a ________________ system to identify opportunities for cost reduction, greater efficiency, and other mutual benefits with her vendors.
A. lifetime customer value
B. customer relationship management
C. supplier relationship management
D. corporate relational marketing
E. vertical vendor analysis

78. In the ______ stage of the relationship development process, the owner of several retirement centers has agreed that Fashion Seal Uniforms will be the only uniforms worn by her more than 300 employees. The salesperson for Fashion Seal has agreed to make some modifications in the uniforms to suit the needs of the retirement center personnel. Both participants view this as a long-term relationship built on mutual trust.
A. awareness
B. exploration
C. commitment
D. attraction
E. expansion

79. The only stage of the relationship development process that may not occur in every relationship is the _____ phase.
A. awareness
B. exploration
C. commitment
D. dissolution
E. expansion

80. Caesar salad dressing made correctly contains raw eggs, but fear of salmonella poisoning forced many restaurants to use an inferior tasting bottled dressing on their Caesar salads. Davidson has developed a process for pasteurizing eggs on a large-scale basis. The pasteurization of eggs is a complicated process that took years to perfect. Because Davidson developed the process and will share it with poultry farmers, the company would be classified as a:
A. competitive partner
B. marketing niche company
C. lead user
D. power marketer
E. market guru

81. J. B. Hunt Transportation sells its delivery service across the United States. The trucking firm is using IBM-designed on-board computers in its trucks so its drivers can send and receive messages, and store information about their loads, including estimated time of arrival. The system also allows the home office to monitor driving speed and engine information. J. B. Hunt is using technology to:
A. increase its efficiency
B. increase its economies of scale
C. decrease its need for credible commitment
D. decrease its mutual dependency
E. do all of the above

Essay Questions
82. What is the difference between buyer’s value and seller’s value?

Buyer’s value is the benefit received minus the selling price and the costs or hassles of buying. Seller’s value is the selling price minus the cost of goods sold and selling costs.

83. What different types of relationships can exist between buyers and sellers?

The four types of relationships between buyers and sellers are solo market transactions, functional relationships, relational partnership, and strategic partnership.

84. What are the characteristics of relational partnerships?

Relational partnerships are characterized by long-term time horizon, medium concern for the other party, high trust between buyers and sellers, relatively low investment in the partnership relationship, high risk in the relationship, and potentially high benefits in the relationship.

85. Discuss the following statement: “Partnering-oriented salespeople are value creators.”

Partnering-oriented salespeople work with their customers and their companies to develop solutions that enhance the profits of both. These salespeople develop an understanding of their customers’ needs and convince the customer that their firm can satisfy this need. Then the salespeople go back to their company and arrange for their company to create a product tailored to the customers’ needs.

86. How is a market exchange relationship a win-lose relationship?

In a market exchange, both parties are negotiating over how to “split up the pie” — who is going to make the most on the transaction. One party gets a bigger piece of the pie at the expense of the other party.

87. List the five foundations of a successful, long-term relationship between a customer and a salesperson.

The foundations of successful, long-term relationships are (1) mutual trust, (2) open communication, (3) common goals, (4) a commitment to mutual gain, and (5) organizational support.

88. How is organizational support important to selling?

Organizational support is critical to developing and maintaining partnership relationships. All employees must “buy in” to the commitments made to the customer. Organizational support can involve changes in the structure, culture, training, and reward systems used in the organization.

89. Why is maturity critical for a successful partnering relationship?

Maturity is critical for salespeople because they need to realize that they will not make a sale every time they approach a prospect. Setbacks and rejections will occur. It takes maturity to not focus on the negative experiences.

Short Answer Questions
90. What evolutionary stage of personal selling has existed since 1990?

partnering

91. What are the two types of customer loyalty?

behavioral and attitudinal loyalty

92. What is the term used to describe a consumer’s total purchase over their life?

lifetime customer value

93. What type of selling relationship exists when the time horizon is short-term, the level of trust is low, and the nature of the relationship is bargaining?

solo market transaction

94. What are the two types of partnerships between buyer and seller?

relational and strategic

95. What is the primary goal of long-term relationship selling?

building trust

96. What is required of each partner in a strategic partnership?

Significant investments to improve the profitability of both parties.

97. In many parts of the world, what is required before a strategic partnership can be established?

personal relationships

98. What are boundary spanning employees?

salespeople and purchasing agents with the necessary support to meet customer needs.

99. What have strategic partners committed to when both parties spend money to improve each other’s products and services?

mutual investment

100. How does a salesperson demonstrate competence to a customer?

by using accurate product and company information

101. What is the first phase in the development of a partnering relationship between buyer and seller?

awareness

102. At which stage of the customer relationship building process will the buyer and seller pledge either implicitly or explicitly to continue the relationship for a period of time?

commitment

103. What is a company creating when it uses technology and statistics to identify supplier relationships and opportunities for greater efficiency?

supplier relationship management system

104. When will the dissolution phase most likely occur in a partnering relationship?

There is no specific time. Dissolution can occur at any point in the relationship.

105. What are companies which face and resolve needs months or years ahead of the rest of the marketplace called?

lead users

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