Lec 09- Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility- 2
Summary
TLDRThis video script delves into the realm of ethical marketing, highlighting the distinction between laws and ethics, and their influence on marketing behavior. It discusses societal culture, business practices, corporate culture, and personal moral philosophies as key factors shaping ethical decisions. The script also covers concepts of social responsibility, including profit, stakeholder, and societal responsibility, illustrating their importance through examples like green marketing and cause-related marketing. It concludes by emphasizing the positive impact of ethical practices on business performance and societal well-being.
Takeaways
- 📚 Laws are systematic, universally accepted rules and regulations created by appropriate authorities like governments, enforceable through penalties, distinct from ethics, which are principles guiding right or wrong behavior in society.
- 🌐 Societal culture and norms refer to shared values and attitudes that dictate moral standards, which can vary among societies and change over time, affecting ethical marketing behavior.
- 🏢 Business culture includes the rules of the game, boundaries between competitive and unethical behavior, and codes of conduct in business dealings, all of which influence ethical conduct in exchange relationships and competitive behavior.
- 🔄 Ethical exchanges between sellers and buyers should result in mutual benefit, with recent consumer protection laws like the Consumer Protection Act 2019 emphasizing strict penalties for misleading advertisements and guidelines for e-commerce.
- 💼 Corporate culture consists of values, ideas, and attitudes shared among an organization's members, which can affect ethical behavior through expectations, informal codes of ethics, and the actions of top management and co-workers.
- 📜 A Code of Ethics is a formal statement of ethical principles and rules of conduct within an organization, addressing issues like contributions to officials, customer relations, conflict of interest, and record-keeping.
- 🤔 Personal moral philosophy, influenced by social, business, and corporate cultures, can be categorized into moral idealism, which upholds universal rights and duties, and utilitarianism, which focuses on the greatest good for the greatest number.
- 🌱 Green marketing involves efforts to produce, promote, and reclaim environmentally sensitive products, reflecting the growing interest in sustainable development and ecological responsibility.
- 🔑 Cause-related marketing ties a firm's charitable contributions to sales of specific products, differentiating the brand by associating it with a cause that consumers believe in and supporting.
- 🌿 Sustainable development is about conducting business that protects the natural environment while making economic progress, with companies implementing initiatives that focus on working conditions and ecological responsibility.
- 🏆 Companies that demonstrate social responsibility, such as through green marketing and ethical business practices, often benefit from favorable consumer perceptions and can outperform less responsible companies financially.
Q & A
What is the primary difference between laws and ethics as discussed in the script?
-Laws are systematic sets of universally accepted rules and regulations created by appropriate authorities, such as governments, and can be enforced by penalties. Ethics, on the other hand, are principles that guide a person or society to decide what is right or wrong in a given situation, focusing on moral rules and guidelines.
How does societal culture influence ethical marketing behavior?
-Societal culture refers to a set of values, ideas, and attitudes shared among a group, which dictates what is morally right and just. These standards can vary between societies and may change over time, creating ethical dilemmas for businesses operating in different cultural contexts.
What is the significance of UPS's Ethics program in the context of ethical marketing behavior?
-UPS follows a global Ethics program, adhering to a consistent set of ethical standards across more than 200 countries worldwide. This demonstrates the company's commitment to maintaining high ethical standards irrespective of varying societal cultures.
What are the three components of business culture, and how do they influence ethical conduct?
-The three components of business culture are the effective rules of the game, the boundaries between competitive and unethical behavior, and the code of conduct in business dealings. These components affect ethical conduct by providing guidelines on how businesses should operate within the market while maintaining ethical standards.
What is the Consumer Protection Act 2019, and how does it relate to ethical marketing?
-The Consumer Protection Act 2019 is a legislation that replaced the 1986 Act, introducing stricter penalties for misleading advertisements and guidelines for e-commerce and electronic service providers. It is related to ethical marketing as it enforces ethical standards and consumer protection in business practices.
Can you explain the concept of economic espionage and its ethical implications?
-Economic espionage involves the illegal collection of trade secrets or proprietary information about a competitor, providing offenders with cheap access to critical information and causing victims to suffer economic losses. It is both illegal and unethical, carrying serious criminal penalties for the offending individuals or businesses.
What is the role of corporate culture in influencing ethical practices within an organization?
-Corporate culture consists of the values, ideas, and attitudes shared among the members of an organization. It influences ethical practices by setting expectations for ethical behavior, establishing an informal code of ethics, and reflecting the ethical actions of top management and co-workers.
What is a Code of Ethics, and why is it important in an organization?
-A Code of Ethics is a formal statement of ethical principles and rules of conduct within an organization. It is important because it provides a unified platform for individuals from diverse backgrounds to understand and adhere to the organization's ethical standards.
What are the two prominent personal moral philosophies mentioned in the script, and how do they impact the marketplace?
-The two prominent personal moral philosophies are moral idealism and utilitarianism. Moral idealism considers certain individual rights or duties as universal, while utilitarianism focuses on the greatest good for the greatest number by assessing the cost and benefits of consequences. Both philosophies impact the marketplace by guiding ethical decision-making and actions of individuals and organizations.
What is the concept of social responsibility in marketing, and what are its three main concepts?
-Social responsibility in marketing refers to the idea that organizations are accountable to society for their actions. The three main concepts are profit responsibility, which focuses on maximizing profits for owners or stockholders; stakeholder responsibility, which emphasizes obligations to those who can affect the organization's objectives; and societal responsibility, which refers to obligations for the preservation of the ecological environment and the general public.
How does cause-related marketing tie a brand to a consumer, and what are some examples provided in the script?
-Cause-related marketing ties a brand to a consumer by associating the brand with a relevant cause that the consumer believes in. Examples provided in the script include Procter and Gamble raising funds for the Special Olympics through product purchases, and MasterCard International linking card usage with fundraising for institutions that combat various social issues.
Outlines
📚 Introduction to Marketing Ethics and Social Responsibility
This paragraph introduces the concept of marketing ethics, distinguishing between laws and ethics, and their impact on marketing decisions. Laws are systematic rules enforced by penalties, while ethics are moral principles guiding behavior. The paragraph outlines factors influencing ethical marketing behavior, including personal moral philosophy, societal culture, business culture, industry practices, and corporate expectations. It also introduces the concept of social responsibility in marketing, which encompasses ethical and socially conscious actions by businesses.
🌐 Societal and Business Cultures in Marketing Ethics
This section delves into the role of societal and business cultures in shaping ethical marketing behavior. It explains how societal culture, with its values and attitudes, influences moral standards that can vary among different societies. The business culture is described as comprising rules of the game, boundaries between competitive and unethical behavior, and codes of conduct in business dealings. The paragraph highlights the importance of ethical behavior in exchange relationships and competitive conduct, referencing the Consumer Protection Act 2019 and unethical competitive behaviors like economic espionage and bribery.
🏢 Corporate Culture and Personal Moral Philosophy
The third paragraph focuses on corporate culture and personal moral philosophy as key influences on ethical practices. Corporate culture is defined as the shared values and attitudes within an organization, which can be reflected in its code of ethics and the behavior of its management. The paragraph also discusses the importance of top management's ethical behavior as a role model for employees. Personal moral philosophy, learned through socialization and education, is explored through two prominent philosophies: moral idealism, which upholds universal rights and duties, and utilitarianism, which assesses the ethics of actions based on their consequences.
🌱 Concepts of Social Responsibility in Marketing
This paragraph introduces the concept of social responsibility, which holds that organizations are accountable to society for their actions. It outlines three levels of social responsibility: profit responsibility, which emphasizes maximizing profits for stockholders; stakeholder responsibility, which broadens the view to include obligations to all parties that can affect a company's objectives; and societal responsibility, which includes ecological preservation and obligations to the general public. The paragraph also touches on the triple bottom line approach of people, planet, and profit, and provides examples of green marketing and eco-labels.
🔗 Cause Marketing and Sustainable Development
The fifth paragraph discusses cause-related marketing as a strategy that ties consumers to a brand through a shared cause, distinguishing it from standard charitable contributions. It highlights how this approach can enhance corporate sales and profits while addressing public concerns. Examples of cause marketing are given, such as Procter & Gamble's support for the Special Olympics and MasterCard's fundraising for various institutions. The paragraph also covers sustainable development, which aims to balance economic progress with environmental protection, and mentions companies that have responded to concerns about working conditions in offshore manufacturing facilities.
📘 Conclusion and Review of Ethical Marketing Behavior
In the concluding paragraph, the module summarizes the framework for understanding ethical behavior in marketing, revisiting the factors discussed throughout the script, including societal cultures and norms, business culture and industry practices, corporate culture and expectations, and personal moral philosophy. It emphasizes the importance of these factors in shaping ethical marketing decisions and behaviors. The paragraph also acknowledges the sources used for the module's material and ends with a thank you note.
Mindmap
Keywords
💡Ethical Marketing
💡Laws and Ethics
💡Societal Culture and Norms
💡Business Culture and Industry Practices
💡Corporate Culture and Expectations
💡Code of Ethics
💡Ethical Dilemmas
💡Moral Idealism
💡Utilitarianism
💡Social Responsibility
💡Green Marketing
Highlights
Introduction to the concept of laws as systematic and universally accepted rules and regulations enforced by penalties, contrasting with ethics as moral principles guiding right and wrong.
Ethics in marketing are influenced by personal moral philosophy, societal cultures and norms, business culture and industry practices, and corporate culture and expectations.
Societal culture's impact on ethical marketing behavior, with moral standards being relative and changing with societal evolution.
UPS's global Ethics program as an example of consistent ethical standards across different societies.
Business culture's role in defining the boundaries between competitive and unethical behavior, and the importance of ethical conduct in seller-buyer relationships.
The introduction of the Consumer Protection Act 2019 and its focus on stricter penalties for misleading advertisements and guidelines for e-commerce providers.
Economic Espionage and bribery as common unethical competitive behaviors in business, with serious criminal penalties.
Corporate culture's influence on ethical practices within an organization, including the importance of a formal Code of Ethics.
The role of top management and co-workers in shaping ethical behavior through their actions and responses to unethical conduct.
Moral philosophies such as moral idealism and utilitarianism and their impact on marketplace ethics and decision-making.
The concept of social responsibility in marketing, encompassing profit responsibility, stakeholder responsibility, and societal responsibility.
Green marketing as an initiative towards sustainable development, focusing on environmentally sensitive products and practices.
Caus-related marketing as a strategy to tie consumers to a brand through a relevant cause, differentiating the company in the market.
Sustainable development's emphasis on conducting business that protects the natural environment while making economic progress.
Evidence that socially responsible companies benefit from favorable word-of-mouth and typically outperform less responsible companies financially.
The importance of working conditions in offshore manufacturing facilities and how companies like Reebok and Nike are imposing codes of conduct to ensure fair labor practices.
A conclusion summarizing the framework for understanding ethical behavior and the various concepts of social responsibility in marketing.
Transcripts
thank you
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welcome to introduction to marketing
Essentials in this module
we will try to identify the factors that
influence
ethical and unethical marketing
decisions
we will also discuss each of these
factors separately and then we will
describe the different concept of social
responsibility in marketing
to start with
laws may be understood as the systematic
set of universally accepted rules and
regulations
created by an appropriate authorities
such as a government
so
they are a systematic set of universally
accepted rules and regulations
all laws are systematic set of
universally accepted rules and
regulations
which are created
by whom by an appropriate Authority
such as the government of that
country or state or or the district
laws can be enforced
by imposing penalties
while as ethics are the principles that
guide a person or Society created to
decide what is right or wrong in a given
situation so you see that there is a
difference between laws and ethics
ethics are the principles that guide a
person or Society
created to decide what is right or wrong
in any given situation
so it regulates the person Behavior or
conduct by applying the moral rules and
guidelines in this there are some Modern
rules and guidelines that we are talking
of
the following slides will discuss
ethical behavior and social
responsibility in marketing now let us
look at the ethical marketing Behavior
ethics are the moral principles and
values
that govern the actions and decisions of
an individual or a group
they serve as guidelines on how to act
rightly and justly
when faced with moral dilemmas
researchers have identified numerous
factors that influence ethical marketing
Behavior
so as it will be shown in the figure in
the next slide so this is the figure
this is the framework for understanding
ethical Behavior
this box
is on personal molar philosophy and
ethical Behavior
while here we have this
societal cultures and norms
then we have business culture and
Industry practices
and then we have corporate culture and
expectations
so what is societal culture and norms
so as we have seen in module 5 culture
refers to a set of values
ideas and attitudes that are learned and
shared among the members of a group
culture also serves as a socializing
force that dictates what is more morally
right and just this means that moral
standards are relative to particular
societies so these moral standards are
always have always to be looked upon
on the basis of a particular society so
as the society changes the moral
standards may also change so that is why
different societies have different moral
standards these standards often reflect
the laws and regulations that affect
social and economic behavior
and that is why this can create ethical
dilemma
for example UPS
the world's largest package delivery
company operating in more than 200
countries worldwide
follow the Ethics program which is
global in nature they follow a
consistent set of ethical standards
across the globe irrespective of the
changing Society societal culture
so this UPS has
a consistent set of ethical standards
that they use across the globe not just
in one country now let us look at the
business culture and the industry
practice
societal cultures provide a foundation
for understanding moral behavior in
business activities
and the business culture comprises of
one the effective rule of the game
the second is the boundaries between
competitive and unethical Behavior
and the third is the code of conduct in
business dealings so this these are the
three things that a business culture is
made up of what are the effective rules
of the game the boundaries between
competitive and unethical Behavior
because and the code of conducting
business dealings now you see that there
are no clear-cut demarcations in these
and the boundaries are fuzzy so that is
why there is a need to have
some ethical behavior that governs these
boundaries so business culture affects
ethical conduct in the exchange
relationships
between Sellers and the buyers
and ethical conduct
in the competitive Behavior among
sellers now let us look at the ethics of
exchange ethical exchanges between
sellers and buyers should result in both
parties being better off after that
transaction
so the exchange process is Central
to the marketing concept this exchange
process is Central to the marketing
process and obviously this exchange
process should also be ethical at the
same time consumer protection act 2019
has recently replaced the three decade
old consumer protection act
1986. introduction of a central
Regulators strict penalty for misleading
advertisement and and guidelines for
e-commerce and electronic service
providers are some of the key highlights
of this new Act
then what are the ethics of competition
there are two kinds of unethical
competitive behavior that are most
common the first is economic Espionage
and the second is bribery
first and second
so we are talking of ethics of
competition
what is economic Espionage economic
Espionage is the gland steel collection
of Trade Secrets or proprietary
information about a company's competitor
offenders get cheap access to critical
information
leading victims to suffer steep economic
losses
this practice is illegal and unethical
and Carries serious criminal penalties
for the offending individual or
businesses
this SP NH activities they include
illegal trespassing
thefts fraud and misrepresentations
wiretapping the search of a competitors
trash and violations of written and
implicit employee agreements with
non-competing clauses
what is bribery
the practice is more common in business
to business and government marketing
than in consumer marketing
in general bribery is most evident in
Industries
experiencing intense competition
too many competitors
trying to sell the same kind of products
to
a small set of consumers so in general
bribery is most evident in Industries
experiencing intense competition
and in countries in the earlier stages
of Economic Development
according to a United Nations study
40 percent of all companies in Asian
countries have to pay briberies to win
or retain businesses now you see that
this is a huge amount of companies
giving briberies in order to get or to
retain the existing businesses
now what is corporate culture and
expectations
a third influence on ethical practices
is Corporate culture so what is
corporate culture so we have seen ah
what is culture so now now we will talk
about what is corporate culture it is
the set of values ideas and attitudes
that is learned and shared among the
members of an organization so now we are
talking about the values ideas and
attitudes that are learned and shared
among the members of the organization
not the members of a society now we are
talking of members of an organization
the culture of a company demonstrates
itself
where in the dress that people wear
sayings how do they talk and the manner
of work of employees so how do they
dress how do they talk and the manner in
which they work
so that reflects the culture of a
company culture is also apparent in the
expectations for
ethical Behavior present
informal code of ethics and the ethical
action of top management and co-workers
what is Code of Ethics a code of ethics
is a formal statement of ethical
principles and Rule of conduct now you
see that
in an organization people from across
different parts of the country or the
different parts of the world they may be
working
they may be coming from different
education backgrounds and different
countries across the world they may be
male or female their age may be
different so now how to bring all of
them on on a single platform
so for that a code of ethics is required
this code of ethics is a formal
statement of ethical principles and
rules of conduct
code of ethics typically address
contribution to government officials and
political parties customers and Supply
relations
conflict of interest and accurate record
keeping
what is the ethical behavior of top
management and co-workers
one reason for violating code of ethics
rest in the perceived behavior of top
management and the co-workers
observing peers and top management and
gauging responses to unethical Behavior
play an important role in individual
actions ethical dilemmas can bring
personal and professional conflict
so you see how dangerous this ethical
dilemma is that it can bring in both the
personal and professional conflict and
for this reason
numerous states have laws protecting
whistleblowers
employees who report unethical or
illegal action of their employers
now let us try to understand what is
moral what is personal moral philosophy
and ethical Behavior
moral philosophy is learned through the
process of socialization with friends
and family and by a formal education it
is also influenced by the societal
business and corporate culture in which
a person finds himself or herself
two prominent personal moral
philosophies have direct bearing on the
marketplace
one is moral idealism and the second is
utilitarianism what is moral idealism
that is the first one what is moral
idealism moral idealism is a person's
moral philosophy that considers certain
individual rights
or duties as universal regardless of the
outcome for example the right to know
applies to probable defects in an
automobile that relate to safety
this philosophy also applies to ethical
duties
an example of a fundamental ethical duty
is to do no harm
for example adherence to the fundamental
ethical Duty
prompted 3M executive to face out
production of a chemical 3M had
manufactured for nearly 40 years so this
3M is the company it used to manufacture
a chemical for nearly 40 years but the
ethical duty of its Executives
forced the company to phase out the
production of this harmful chemical
believing that the substance could be
possibly harmful in large doses
3M voluntarily stopped its production
resulting in a dollar two hundred
million loss in annual sales
what is utilitarianism
an alternative perspective of moral
philosophy is utilitarianism
it is the personal moral philosophy
now you see that this is a personal
modern philosophy not the organization
moral philosophy that focuses on the
greatest good for the greatest number by
assessing the cost and benefit of
consequences of ethical Behavior
if the benefits exceeds the cost then
the behavior is ethical if the benefits
are less than the cost then the behavior
is unethical another important concept
or issue current Trend in marketing is
that of social responsibility
this social responsibility refers to the
idea that
organizations are part of a large
society and are accountable to that
Society for their actions
so this company is accountable to not
only to the customers and suppliers but
but also Society
so there are three concepts of social
responsibility one is the profit
responsibility
the second is stakeholder responsibility
and the third is
societal responsibility
what is profit responsibility so profit
responsibility holds that companies have
a simple Duty
to maximize profits for their owners or
stockholders so this view was expressed
by Nobel Laureate Milton Friedman who
said there is one and only one social
responsibility of business
to use its resources and engage in
activities
designed to increase its profit
so long as it stays within the rules of
the game
which is to say engage in open and free
competition without deception and fraud
what is stakeholder responsibility
stakeholder responsibility is the
criticism of the profit view so the
profit view was that
to maximize profit for the owners and
the stockholders then came another view
that is the stakeholders responsibility
so what is the stakeholder
responsibility that is the criticism of
the profit View
that has led to a broader concept of
social responsibility that is the
stakeholder responsibility so this
stakeholder responsibility
focuses on the obligation
and organization has
to those who can affect achievement of
its objective
social responsibility focuses on
obligations
obligations for whom who can affect
achievement of its objectives
so these
constituencies
these groups include
one is are the consumers
second are the employees
third are the suppliers and fourth are
the Distributors so these are the four
constituency constituencies that can
affect achievement of the
objectives of this company what is
societal responsibility
and even broader concept of social
responsibility has emerged in recent
years and that is called as societal
responsibility
what is societal responsibility it
refers to
obligations that organizations have
for what first is to is the preservation
of the ecological environment and the
second is
to the General Public
so this social responsibility emphasizes
on the triple bottom line approach
recognition of the need for
organizations
to improve the state of people
the planet and the profit simultaneously
is necessary if they are to achieve
sustainable long-term growth so these
are the three bottom lines people planet
and profit
and it is necessary
for the sustainable and long-term growth
growing interest in green marketing
course marketing social Audits and
sustainable development reflects this
recognition
what is green marketing green marketing
refers to the marketing efforts to
produce
promote and reclaim environmental
sensitive products
example Xerox design for the
environmental program focuses on ways to
make its equipment recyclable and
remanufacturable
today 100 percent of Xerox design
products are remanufacturable so there
is nothing left every product that they
make they can be re-manufactured again
so there are no waste
that will end up in a landfill and then
it may affect the environment and the
groundwater this efforts have kept more
than 2.3 billion points of equipment
from being discarded in U.S landfills
another example is that of Wipro
infotech Wipro infotech is the first ID
company to launch its Econo eco-friendly
Wipro greenware desktops
manufactured with material completely
free of deadly chemicals like polyville
chloride that is that is commonly known
as PVC and brominated flame retardants
that are called as bfrs in India
the third example is that of Eco labels
equal labels identify the environmental
friendly products and services
Eco level criteria guarantee that a
given product or service is fit for use
and will have reduced environmental
impact throughout its life these are the
various Eco labels that you can find on
various product and they ensure they are
given only to those those
products that have reduced environmental
implant impact throughout the product
life cycle
what is cost marketing
in today's time there is a plethora of
advertisements and multiple mediums of
reaching out to the Target consumers
the companies they keep on looking for
different ways to break through the
Clutter and differentiate themselves in
the eyes of the consumers
this cost related marketing has become a
successful and relevant strategy
as it ties the consumers to the brand
with more than just the product but a
relevant cause
but a relevant cause that the consumer
believe in so now this
caus related marketing is being used to
tie the brand with the consumer which
cause the cost that is relevant to our
consumers cost marketing refers to tying
the charitable contribution of a firm
directly to sales produced through the
promotion of one of its products
this definition distinguishes
cause marketing from a firm's standard
charitable contribution which are
outright donations so money spent on
this cost marketing is not counted as
charitable donations
or charitable contributions cause
marketing programs incorporate all the
three concepts of social responsibility
by addressing public concerns and
satisfy consumer needs
they can also enhance corporate sales
and profits
because the consumer may think that they
are doing very good
They are promoting a cause they are
spending money in that so that that that
will affect the consumers and they may
come back or they may buy more from this
company Procter and Gamble for example
raises funds from the Special Olympics
when consumers purchase selected Company
products
MasterCard International links usage of
its card with fundraising for
institutions that combat cancer heart
disease
child abuse drug abuse and muscular
diastrophy
another example is PNG shiksha
this shiksha attempts to address the
cause of the right to education by
building and supporting schools in India
when consumers
buy any of the PNG product
the company contributes to the shiksha
initiative
the advertising strategy
urges consumers to make a conscious
choice of choosing PNG product for a
better India next is
sustainable development
so sustainable development involves
conducting business
in a way that protects the natural
environment
while making economic progress so it is
about achieving both these objectives at
the same times
preserving the national environment and
also the economic progress it is not
that the natural environment will be
protected
while sacrificing the economic progress
and it is also not that the economic
progress will be made by sacrificing the
national environment so sustainable
development focuses on achieving both of
them at the same time
completes that evidence social
responsibility
has been rewarded for their efforts
the research has shown that these
companies
first benefit from favorable Word of
Mouth among consumers and second
typically outperform less responsible
companies
in terms of financial performance
ecologically responsible initiatives
such as green marketing represents one
initiative towards sustainable
development so that green marketing is
one initiative of sustainable
development
recent initiatives related to working
conditions
at Offshore Manufacturing
sites that produce goods for U.S
companies focus on quality of life
issues
public opinion surveys show that 90
percent of U.S citizens are concerned
about working condition under which
products are made in Asia and Latin
America companies such as Reebok Nike
less Cal bone Levi's Strauss and metal
have responded by imposing code of
conducts
has responded by imposing course of
conduct to reduce harsh or abusive
working conditions at Offshore
Manufacturing facilities
Reebok for example now monitors
production of its exporting apparels and
equipments to ensure that no child labor
is used in making its products
to conclude this module
and also the first part
we started this module by introducing a
framework to understand ethical Behavior
each factor influencing the ethical
Behavior was discussed separately
which included the following the social
cultures and Norm
one second is the business culture and
Industry perspective the third is
Corporate culture and expectations and
the fourth one is personal moral
philosophy and ethical Behavior
at last different concept related to
social responsibility in marketing were
discussed
and these are the three books from which
the material for this module was used
thank you
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good
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