This document provides an analysis of different retailers' entry and performance in the South Korean market, including Walmart, Tesco, and Costco. It discusses their market entry strategies, segmentation approaches, and marketing mix decisions. Key insights include Tesco leveraging its partnership with Samsung for domestic recognition, while Costco focused on upscale shoppers. Both Tesco and Costco saw growth in sales volume, though traditional Korean retailers still dominated food sales. The analysis examines how adapting to local consumer preferences and culture was important for their success in South Korea.
The case study was given to us by our Professor in Business Policy and Strategy where we were to analyze Patagonia's achievements and successes as well as their downfalls, and give them new ways to expand their business. We took a look at they're corporate strategies, finances, and sales, and then provided feedback with data for where they should ultimately take their company which was described in the case analysis that was given to us.
This international marketing plan seeks to identify and evaluate the best foreign markets for TJ’s by selecting market indicators that are potentially impactful on consumer acceptance of TJ’s and its unique culture and brand
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HBR Case: Ethiopia: An Emerging Market Opportunity?Kristian Moeller
The Ethiopia: An Emerging Market Opportunity? case centers on the potential and challenges of entering an emerging market. It provides a brief overview of the Ethiopian market, market reforms and policies, and the business environment faced by foreign companies. Three multinational businesses, CareCo, ShoeCo, and MedCo, must decide whether and how to enter the Ethiopian market. Students are asked to make a recommendation for each company based on the attractiveness of the market, the factors that matter most for success, and an assessment of what applies to the companies.
The case study was given to us by our Professor in Business Policy and Strategy where we were to analyze Patagonia's achievements and successes as well as their downfalls, and give them new ways to expand their business. We took a look at they're corporate strategies, finances, and sales, and then provided feedback with data for where they should ultimately take their company which was described in the case analysis that was given to us.
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A quick summary or a general outlook on international business management of South Korea. The outline is written below:
Introduction to South Korea
Economic Transition & Business-Industrialization Stage
Political Admin, Public Policy, Society & Culture
Geopolitics to Geo-economics
Emergence of Chaebol Industry
Foreign Investment Climate
Business Culture & Etiquette
This was my first presentation and first time to use ppt office, since then i have been improving.
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Neil McCulloch, The Policy Practice
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Business Environmental AnalysisPart III4. Give your team’s recVannaSchrader3
Business Environmental Analysis
Part III
4. Give your team’s recommendation on how to respond to the opportunities and threats (no response may be valid if you can justify it)
In section entails external forces that affect the operations of the company by providing opportunities and threats. Opportunities are positive chances created by external factors that a company can utilize and earn a competitive advantage while threats are negative conditions created by external forces that can affect the companies operation. For Nike Company, there are several environmental forces that will affect the company either positively or negatively. In order to analyze the macro-environmental factors that will affect Nike Company, PESTEL analysis will be used; thus the factors to be analyzed will be; political factors, economic factors, social factors, technological factors, environmental factors, legal factors and ethical factors (Okoye 2017).
9.Make a go/no go decision if the firm should pursue this international opportunity and why
Political factors involves the degree to which a government intervenes in the economy and this can include; government policies, political stability or instability in foreign markets, tax policy, foreign trade policy environmental laws, labor laws and trade restrictions among others. Secondly, economic Factors are factors have a significant impact on how a firm does business and also determines the profitability and includes; economic growth, exchange rates, inflation and interest rates among others. Thirdly are social factors which involve beliefs and attitudes of population and includes population growth, age distribution, career attitudes among others. The fourth aspect is Technological factors which affect marketing and management by deriving new ways of production and distribution of goods and services and also new ways of accessing and communicating with target markets. Environmental factors are also important due to factors such as carbon footprint targets set by governments, scarcity of raw materials and operating business as an ethical and Sustainale Company. Also, there are legal issues which include advertising standards, product labeling and product safety, consumes rights and laws among others. Finally, ethical factors which involves issues such as fair trade, slavery acts and child labor among others
Opportunities
· Opportunities that exist for Nice Company includes;
· Political stability in most countries they perat in
· Lack of trade restrictions
· Many people believes that they are among the top in the market hence people have positive attitude towards their products
· Many football cubs are continuously being formed hence providing continuous market expansion.
· Many young people are currently opting to shift their careers to sports.
· Increased advancement in digital marketing technologies
· Advancement in online purchases
Threats
· Political instability in other countries
· Broad economic uncertainty.
· High ...
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https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
In this webinar, we won't focus on the research methods for discovering user-needs. We will focus on synthesis of the needs we discover, communication and alignment tools, and how we operationalize addressing those needs.
Industry expert Scott Sehlhorst will:
• Introduce a taxonomy for user goals with real world examples
• Present the Onion Diagram, a tool for contextualizing task-level goals
• Illustrate how customer journey maps capture activity-level and task-level goals
• Demonstrate the best approach to selection and prioritization of user-goals to address
• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
2. China Russia
North Korea
Japan
North-East Asia
It is bound by North Korea to the north, the Yellow Sea to the west as
well as the Korea and Cheju Straits to the south.
3. Population Religions Language
2010 Total population Confucianism, Shamanism, Chr The Korean language is related
(thousand persons): 49,410; istianity, Buddhism and to Japanese and Mongolian
Chondokyo
Males: 24,758 a large number of Chinese
Female: 24,653 cognates exist in Korean
Source: Statistics Korea, 2011 Source: Datamonitor, 2011 Source: Datamonitor, 2011
4. Dry & Cold in winters Famous for Winter Sport
Hot & Humid in summers Activities fluctuate for heavy rain
5. WHICH MARKETS
TO ENTER External analysis
Political factors
Economical factors
Social factors
Technological factors
Environmental factors
Legal factors
MARKET ENTRY STP strategy
STRATEGIES Entry mode strategy
MARKET Marketing mix (the 4 Ps)
PROGRAMME Case study
Opportunities
6. WHICH MARKETS
TO ENTER External analysis
Political factors
Economical factors
Social factors
Technological factors
Environmental factors
Legal factors
MARKET ENTRY STP strategy
STRATEGIES Entry mode strategy
MARKET Marketing mix (the 4 Ps)
PROGRAMME Case study
Opportunities
7. PESTEL analysis of South Korea
A framework of macro-environmental factors used in the environmental
scanning component of strategic management.
Political factors
Economic factors
Social factors
Technological factors
Environmental factors
Legal factors
8. Political factors
Government Form: Republic
Government effectiveness: 86.7 % (2009). Pursuit stability in policy formulation and
implementation.
International Relation: Strongly ties to the U.S., China, Japan, and Russia.
9. Political factors
Current Strengths Current Challenges
• Centralization of Power • Military influence in South Korean
• Political will for economic reforms politics
• Strong foreign relationships • Factionalism in the ruling party
Future Prospects Future Risks
• Strengthening relationships with EU • North Korea remains a major threat
• By-election result indicate increasing
discontent with the government
Source: Datamonitor, 2011
10. Economic factors
Strong economic growth in 2010 after achieving modest growth in 2009.
GDP Source: Datamonitor 2011
11. Economic factors
Major business trade relation
Source: Economist Intelligence Unit, 2009
12. Economic factors
SMEs(small manufactures enterprise) in South Korea are financially weak.
Foreign investment has been decreasing.
Source: Datamonitor 2011
13. Social factors
Low fertility rates and Aging society
Rapid Urbanization
South Korea 1960 2000
Population in the Seoul 5 Million 21 Million
Metropolitan Area
Percentage 20.8% 46.3%
Source: Datamonitor 2011
14. Social factors
Highly-educated workforce.
Working Age Population will be 72.9% in 2016.
High wages and Rising power of labor unions
Labor market flexibility has been hampered by high costs and the militancy of
the country's labor unions.
Source: Datamonitor 2011; Korea Statistics, 2011
15. Social factors
Cultural Dimensions
Live in a hierarchical and collectivistic society
Live in a feminine and long-term oriented society
Most uncertainty-avoiding country
Source: geert-hofstede
16. Social factors
Examples:
Zhang and Dodgson(2007) have given an character sketch of the founder of a
Korean start-up IT company, Mr. Lee:
“We found Mr. Lee was influenced by his parents, and sometimes followed
their advice-even though he knew they were not necessarily right, because he
could not face losing business relations from his personal networks.“
Source: Hollensen, 2011
17. Technological factors
The most wired country- communications and internet facilities- in the world.
Well known for technological innovation.
• There are about 900 R&D centers that include foreign participation.
• The gap between innovation and commercialization is very small.
Source: Datamonitor 2011
18. Environmental factors
Limited natural resources, soil erosion
Strong governmental intervention to protect environment
Environmental technology development
Source: Datamonitor, 2011
19. Legal factors
Strong government support:
• Simple foreign investment process.
• Tax reduction and exemption.
• Equal treatment with Korean nations
Low investment freedom. (government intervention)
Laws and regulations are often framed in general terms and are subject to differing
interpretations by government officials, who rotate frequently.
Source: The PRS Group, 2011; Datamonitor, 2011
20. Insights:
South Korea is a very attractive market due to:
1) Fast pace of economic growth;
2) Strong government support;
3) Highly educated workforce;
4) Technological capability.
However,
• North Korea issue arouse concerns both politically and economically.
• Social and cultural pride may lead to Koreans’ restrict to new brand or foreign
brand.
Generally, South Korea is a country of moderate investment risk.
21. WHICH MARKETS
TO ENTER External analysis
Political factors
Economical factors
Social factors
Technological factors
Environmental factors
Legal factors
MARKET ENTRY STP strategy
STRATEGIES Entry mode strategy
MARKET Marketing mix (the 4 Ps)
PROGRAMME Case study
Opportunities
22. Sensitive to health issues
E.g. Health food market
A consumer survey conducted in 2005, indicating that 80% of consumers
purchased organic products because they concerned about their family’s
health; 72% concerned about food safety.
Source: OECD,2011
24. STP strategy
Longer life expectancy
Increasing life expectancy and falling fertility is driving population ageing.
People aged 65+make up 7% of the total population.
Younger people purchase more
Young consumers have become consumer trendsetters in Korea, as their
spending power increases.
Source: OECD,2011
26. Entry mode strategy
1)Export entry modes; 2) Contractual entry modes; 3) Investment entry modes
Investment entry mode
Requires the greatest commitment of management and financial resources.
FDI Failure Examples: Planet Hollywood restaurant
Source: Hollensen,2011; Min 2005
27. Entry mode strategy
Joint ventures/strategic alliances
In Korea, economy is dominated by business conglomerate like Samsung.
There is a often complex love-hate relationship with foreign brands.
Insights: In Korea, business relationships are built upon personal ties and social
introductions. Language barrier and established business circles makes it extremely
difficult to enter Korean market. Therefore, local representation is essential for the
success of foreign firms in the Korean market, especially the support from chaebols.
Source: OPA; Hollensen,2011; Min, 2005
29. A unique opportunity: the rapidly growing LCD TV market and champions
industry-wide standardization of LCD TV sizes.
Goal
Construct a mutually beneficial relationship
After joint venture
A stable supply of LCD panels
Efficient production output in supporting the LCD TV
business efforts at both companies.
Source: Samsung, 2011; BBC News, 2011
30. WHICH MARKETS
TO ENTER External analysis
Political factors
Economical factors
Social factors
Technological factors
Environmental factors
Legal factors
MARKET ENTRY STP strategy
STRATEGIES Entry mode strategy
MARKET Marketing mix (the 4 Ps)
PROGRAMME Case study
Opportunities
31. Marketing mix: Product
Koreans value product quality, service and safety, consumers focus more on
health than before.
Strong pride in domestic brands.
High requirement of localization.
Insights: Marketers have to adopt localization strategy when marketing
their products to the demanding Korean consumers in face of their loyalty
to Korean local brands. After-sales service is supposed to contribute the
same importance compared to product quality itself.
Source: OPA; Park, 2004
32. Marketing mix: Product
Examples: McDonald’s double-digit growth for 5 years
Customized breakfast.
Kimchi and bulgogi burgers are offered along
with a red bean pie.
Home delivery
Source: Kim, 2011
34. The Korean slice of the Web is relatively small
compared to the English-language chunks of
cyberspace.
NAVER: Knowledge iN, where users post
questions that are answered by other users.
"Korean netizens like to interact with other
people, they want to answer questions, they
want to reply."
Source: Burt Herman, 2006
35. Marketing mix: Pricing
Generally price sensitive.
Quality conscious and brand loyal, less likely to switch to less-expensive products.
Insights: A strong brand loyalty is a very important aspect for marketers to
consider in order to make more profits.
Low price strategy should not be used for luxury brands because it may
increase the intrust.
Source: Datamonitor,2011; M. Kim et al. 2010
36. Marketing mix: Distribution
Korean corporate retailing
Traditional channel
Department Specialist Franchising Non-store
Supermarket
Stores Stores Chain Stores Merchandising
Internet Home TV Catalogue Home Visitation
Shopping shopping Ordering Sales
Source: Min, 2004
37. Marketing mix: Distribution
Korean distribution channel: Archaic, complicated network
Traditional Distribution Channels: higher brand values.
Mass distribution strategy threats luxury brand legitimacy.
Insights: When choosing distribution channels, company should consider
their positioning strategy and use proper distribution channels. Price
sensitive products should not be distributed to Koreans through
department stores.
Source: M. Kim et al. 2010 Dion&Arnould,2011 Min, 2004
38. Marketing mix: Distribution
Examples:
LV’s distribution channel in South Korea: Specialty
stores and department stores.
Traditional Distribution Channels: higher brand values.
Achieving higher social value, utilitarian value and
emotional value.
Source: M. Kim et al. 2010
39. Marketing mix: Promotion
Koreans as uncertainty-avoidance consumers, prefer utilitarian benefits.
Demonstrations, consumer contests, the use of novelties (free gifts), and
guaranteeing quality.
Using Coupons is viewed as being less affluent in Korea.
Insights: Compared to more hedonic benefits, it is more effective to give out
utilitarian benefits to attract more Korean consumers.
Use free products and promotional sales rather than low price strategy.
Source: Kwok& Uncles, 2002; Raymond& Lim, 1996
40. Marketing Communication
TV and Internet share most of the media
market in South Korea.
Korean marketer tend to emphasize visual
brand information.
Insights: International marketers must pay more
attention to the communicative power of physical
attributes and features( especially virtual
communities) of brand identity that can translate into
gains in IMC.
Source: Koreanclick New Survey, 2008; Lee, 2011
41. Marketing Communication
Conformity with family, friends, and neighbors opinions.
Word of mouth is the most trusted source for Korean consumers.
Respect for authority.
Insights: Marketers should develop their promotion strategies through
virtual, authority-involved-advertisements. Service aspect should be paid more
attention due to the word- of- mouth effect.
Source: Taylor et.al, 1993; Raymond & Lim, 1996; Koreanclick New Survey, 2008
42. Marketing Communication
Examples: Brand placement
Korean practitioners connect symbolic
assertion and brand familiarization strategies
that were supported by indirect, mood-
creating visual messages to brand placement
practice.
Source: Lee, 2011
43. Case study
Wal-Mart & Tesco & Costco
in South Korea
“Think globally, act locally”( R. Mead, 1998)
44. Background
Sales of food retailers compare with GDP
1998 2001 2003 2005
Sales of big super chain 91.8 114.2 170.4 188.4
GDP of Korea 394.7 486.2 662.6 721.4
Sales of big supermarket 20.2% 23.6% 25.7% 26.5%
chain /GDP
In spite of financial crisis, big supermarkets’ has been growing constantly,
Source: The Bank of Korea, 2006
45. Korea Market Wal-Mart Tesco Costco
1994 Price Club & Shinsegae:
Enter Korea
1996 liberalization of the food • Market saturation in U.S.
retail sector by the Korean • Forced to develop
government international market
• Enter Korea
1997 Economic crisis Resumed Costco brand
name
1998
1999 • Samsung needed a
Foreign supermarkets’
foreign partner for
discount strategy
restructuring(financi
consumers start to choose
al crisis)
foreign discount retailer
• Samsung & Tesco:
over department store
Enter Korea
2006 • Withdrawal from Korea
• sold 16 stores to Shinsegae
for 882million
Source: Choe, 2006
47. Traditional markets are still Korean’s favorite place to purchase food (others 57%).
Costco Lotte
1% 10% E-Mart Hyundai
6% Department
Store
2%
Others Samsung
57% Tesco
Domestic 5%
retailers
(34 firms)
19%
Market Share of Food Retailing in Korea
Source: Euromonitor, 2011
48. Concept of value exchange
Highlights the importance of focusing on value determined by customers
and tailoring products and service accordingly rather than focusing on the
comparison of the previous year’s figures as well as competitor-based
performance.
Source: Grant and Schelsinger, 1995
49. Market entry Strategy
Wal-Mart Tesco Costco
• Enter Korean • Use Samsung’s name to create domestic • Price Club&
market without recognition Shinsegae=
any local partner • Hire local managers with only a few Costco of Korea
operational experts from UK
• Implemented its • Support English training
U.S. model • Leverage on Samsung’s knowledge and
expertise of local market condition
• “Shinbaration” culture=eastern (contribution
&enjoy) +western culture(rational)
• Time ”mileage” system: awards those who
work overtime
Source: Choe, S. H., 2006
50. Segmentation
Wal-Mart Tesco Costco
• Middle class • Urban consumers • Upscale shoppers
• Lower middle • Quality focused • Especially small-business
class • Teenagers owners
Source: Gorton, M. & Sauer, J. & Supatpongkul, P., 2011
51. Marketing strategy: Product Decisions
Korean’s Attitude Wal-Mart Tesco & Costco
• take freshness of food • offer bulk-size products for • Focus on fresh food and beverage.
products very seriously. longer storage. • Transform the traditional outdoor
market into a convenient indoor
• Willing to make frequent • Assume customers make fewer format in hypermarkets by offering
trip to markets to buy frequent trip to supermarkets live seafood, local delicacies, and on-
small volume of fresh like American customers. site packaging services.
products. • Offers partially processed fresh
• Uniform merchandizing & products and repackaged into a
• Prefer small packaging distribution strategies that ready-to-cook(eat) form.
products, given their small limits product choice and • Its meat section has sales staff that
houses with limited constraint in adapting local cuts and custom packages according
storage and freezing tastes and preferences. to customer’s preference.
spaces. • A deli- section that sells popular
traditional Korean food (Tesco).
• Costco don’t pretend to be Korean but
sells lots of new/different products to
make shopping interesting.
Source: Jungmo, K., 2008
52. Marketing strategy: Promotion & Pricing decisions
Korean’s Wal-mart Tesco Costco
expectation
• Prefer free products • Pricing • Homeplus Family • Worldwide standardized
and promotional System: EDLP Membership card membership System
sales than every day (Everyday
low price Low Price) • Buy one get one • Offer discounted pricing
free on smaller quantities
• Are quality conscious • Value=price (such as E-Mart)
and brand loyal, and
so are less likely to • Value=quality
switch to less-
expensive products
Source: Jungmo, K., 2008
53. Marketing strategy: Service
Korean’s Wal-Mart Tesco Costco
expectation
• Unwilling to • Ware house style without • “Applause mileage • Taking care of
compromise assistance of sales people card” for good customers and
customer service who give out free samples service employees.
and quality for and help package and wrap • “Great Stone Face” • Takes
low price products in the store business model: precedence over
• Expect more • Wal-Mart believes that balancing rewarding
customer service shareholders are best growth(Market shareholder
(ex: salespeople served if employers do all Value) and Social • Average hourly
in each aisle of they can to hold down Contribution(Social wage is $17 an
store) costs, including the costs of Value)-”The Korea’s hour.
labor. most admired
• Average pay of a full-time company”
worker at Wal-Mart is
$10.11 an hour
Source: Yoo-Taek Lee, 2010
54. Marketing strategy: Retail Environment
House of Parliament in Britain vs. Samsung Tesco in Korea
We’ll always listen to our customers.
Source: Jungmo, K., 2008
55. Marketing strategy: Internal Management
Korean’s expectation Wal-Mart Tesco
• Location determines where • Assume consumers use • Strategically upscale its
they shop vehicles to shop and store atmosphere: Value
• Shops mostly in the distance is a less critical Store Touching Store
metropolitan areas factor Green Store
• Prefer stores with close • Built stores in distant areas • First retailer in the world
proximity where land prices were low who emphasize store
• Expect a more tailored retail (had only one in 16 stores in identity->UK House of
environment Seoul metropolitan area) Parliament
• Failed to achieve economies
of scale because of store
location
Source: Renee B. Kim, 2008
56. WHICH MARKETS
TO ENTER External analysis
Political factors
Economical factors
Social factors
Technological factors
Environmental factors
Legal factors
MARKET ENTRY STP strategy
STRATEGIES Entry mode strategy
MARKET Marketing mix (the 4 Ps)
PROGRAMME Case study
Opportunities
58. Market prospect
Alcohol consumption: South Korea ranked 13th in the world. (WHO, 2011)
Market value is expected to keep growing in the next few years
Source: Euromonitor International,2011
WHO, 2011
59. The change of drinking culture
Socialize/ Business meeting/Gift
Women’s increasing participation in social and economic activities
Source: Euromonitor, 2012
60. Flavored alcoholic drinks –pattern from strong to light drinking
More aware of their health.
The increasing popularity of luxury brands.
Branding and product image have a growing role in the market.
Source: Euromonitor, 2012
62. Market prospect
Coffee continued to record strong retail sales growth in 2010.
Annual coffee consumption per person in Korea
400
291 312
283
300 253 248
200
100
0
2006 2007 2008 2009 2010
Source: Korea Statistics, 2011
63. Market prospect
Coffee market is expected to grow continuously.
Fresh coffee and instant coffee recorded positive sales growth while
following health and wellness trends.
Source: Euromonitor , 2010; TransWorldNews, 2011
64. Coffee culture in Korea is booming
Korean consumer increasingly enjoy the taste of coffee.
More customers prefer high- quality coffee.
Koreans like to spend a lot of time in coffee shops.
Enjoy hanging out to socialize or study using a coffee shop.
Coffee is also at the center of soap operas.
e.g. 2007 , Popular TV series ‘The 1st Shop of Coffee Prince’
e.g. 2010, Popular TV series ‘Coffee House’
Source: Euromonitor , 2010; Southerton, 2007; Arirang, 2011
65. Fresh Coffee drives the coffee culture and follows the trend
Coffee has developed in line with the coffee culture in cafés and specialist coffee
shops.
E. g. Starbucks
Starbucks as a popular meeting place for Koreans
Starbucks as one of the top 3 chained specialist coffee shops in 2010
Over 1,392 branches across the country in 2010
e.g. Available customers to stay
e.g. Long opening hours
e.g. Provide quality coffee and food
Euromonitor , 2010; Arirang, 2011
67. Market prospect
The market share of hotel industry in South Korea will increase by
44.3%, 12.7 billion in 2015.
Asia- Pacific Hotel industry market share
Others China
40% 43%
Japan
8%
South Korea
Taiwan 6%
3%
Source: Datamonitor,2011
69. South Korea has 62 legal holidays, not including weekends
Tend to travel in Groups, 56% consumers travel with families.
52% people have more than 3 vacations a year.
Source: Lee & Sparks,2007
70. Prices sensitiveness and prefer short vacation.
Brand recognition, prefer international brand.
Leading company in South Korea hotel industry
Wyndham Worldwide Best Western Accor Hilton World Wide
Source: Datamonitor, 2011; Lee & Sparks,2007
71. Conclusion
Merit:
Economic strength and continues to report high growth.
Strong support from Government to encourage foreign investment.
World-Class Multinational Companies.
Equal treatment with Korean nationals generally.
Demerit:
Language problem.
Management style .
Conservative culture.
73. Limitations
Cannot cover all industries.
No in-depth analysis in each industries and products specifically.
Difficult to access information.
Neglect the comparison between neighboring countries such as China and Japan.
74. References
• Chandon, P., Wansink. B. & Laurent(2000) “A Benefit Congruency Framework of Sales Promotion Effectiveness,” Journal of Marketing, 64, pp. 65-81.
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