Running Head: THE POWER OF PEPSI
PepsiCo:
The Power Of Pepsi The “Brand of Generations”’ Misfires Connecting Social Responsibility With Youth
Rebecca Dupont PUR 6215 Summer A 2019
THE POWER OF PEPSI
TABLE OF CONTENTS
OVERVIEW 2 COMPANY BACKGROUND 4
HISTORY OF PEPSI 4 CORPORATE SNAPSHOT 5 CELEBRITY ENDORSEMENTS: JOIN THE PEPSI PEOPLE 6 BRANDING FOR THE GENERATIONS 7 THE ELUSIVE YOUTH 8
CORPORATE CHARACTER 10 MISSION STATEMENT 10 VALUES 10 PERFORMANCE WITH A PURPOSE 10 CORPORATE REPUTATION 12
TIMELINE OF EVENTS 13 RESPONSES 14
SOCIAL MEDIA RESPONSE 14 MEDIA RESPONSE 15 PEPSICO’S RESPONSE 16
FINANCIAL IMPACTS 16 IMPACT ON STOCKS 16 IMPACT ON SALES 17 IMPACT ON REPUTATION 17 THE IMPORTANT MULTICULTURAL PERSPECTIVE 18
MOVING FORWARD 18 REFERENCES 21
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THE POWER OF PEPSI
OVERVIEW
On April 4, 2017 Pepsi released their two and a half minute campaign “Live For Now” on
Youtube featuring reality television star Kendall Jenner as a young model who leaves work to
join a peaceful protest (Monllos, 2017).
The short film features Jenner in what appears to be a high class fashion shoot where she leaves
due to hearing protesting outside of the studio. The video makes a point of the diverse crowd
with one woman wearing a hijab and several
other protesters of diverse backgrounds. It is
unclear what the protest is for other than
signs held up featuring words of peace, love
or “join the conversation” (Smith, 2017).
Figure 1: Jenner stars in commercial (Smith, 2017)
Jenner passionately takes her wig off and lipstick to join the ambiguous activists, fist bumps one
activist and joins the marchers and dancing mob. This display of lighthearted and untroubled
protest starkly differs from the reality of protests within the United States.
Jenner proceeds to grab a Pepsi from an ice cooler, approach a police officer at the frontline
which appears unrealistically calm, and hands him the Pepsi. Demonstrators hold their breath,
record and await the police officer's response. He proceeds to smile and accept the fizzy
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THE POWER OF PEPSI beverage as a peace token and all appears resolved at the protest as the crowd cheers (Smith,
2017) .
Within 24 hours of the posting of the video, social media outlash spiraled and criticism
snowballed to all media outlets. Majority of the criticism of the skit was circled around the
trivialization and appropriation of the Black Lives Matter movement and the realities of police
brutality associated with peaceful protests (Smith, 2017).
Since the launch of Pepsico’s Performance With A Purpose 2025 Agenda, for over a decade one
of the brand’s key objectives revolved around positively impacting and enriching the lives of
people (Pepsico, 2016). The brand has championed human rights, diversity in managerial roles,
empowering women and fostering equality through their initiative internally and externally on a
global scale. In an attempt to reconnect with the elusive millenial youth and generation Z through
Kendall Jenner and express their brand values of global peace, human rights and unity, the
company misfires by the perceived appropriation of a national protest movement. Some argue
the choice of Jenner’s place in an effort to promote their social concerns and company efforts of
global unity were a mismatch due to her lack of relevance to the topic.
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THE POWER OF PEPSI
Figure 2: Jenner compared to Iesha Evans during the Baton Rouge protest (Smith, 2017)
The key components of this case from a corporate communication perspective include the
significance of understanding one’s stakeholders, and message analysis. A lack of understanding
the youthful stakeholder for Pepsico deemed consequential failed to communicate a message
meant to express the brand’s commitment to diversity, inclusion and global unity.
COMPANY BACKGROUND
HISTORY OF PEPSI
Pepsi-Cola and Frito-Lay merged to become Pepsico Inc in the year 1965 and adapted as a snack
and soda company for the past 50 years (Pepsico, 2019). The company continued to grow
dramatically in the 1970’s under the management of Donald M. Kendall who advertised on a
massive, unprecedented level, and diversified the company’s products to also expand overseas
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THE POWER OF PEPSI (Reference For Business, 2016). With growing popularity, by the 1970’s it was a common phrase
to “join the pepsi people”. Today the company is one of the world’s largest providers of soda and
snacks of over 200 countries with 22 brands and collected over $65 billion in revenue last year
(Bailey, 2019).
CORPORATE SNAPSHOT
PepsiCo is one of the world’s top ten leaders in food and beverage providers with Mondelez
International as the #1 competitor of the company followed by Coca-Cola (Owler, 2019). The
New York based company holds an advantage over most competitors due to the diversified
business model in snacks which accounted for $52% of the company in 2013 (Bailey, 2019) and
leads to PepsiCo profits to almost twice of Coca-Cola.
QUICK FACTS:
● 267,000 Employees
● $2.3 Billion dollars in funding
● Over 500,000 social media
followers (Facebook & Twitter)
● 36% Senior Female Executives of
Color
● Women are paid within 1% of men
of equal skill & positions
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THE POWER OF PEPSI Figure 3: Pepsico portfolio (Bailey, 2019)
CELEBRITY ENDORSEMENTS: JOIN THE PEPSI PEOPLE
Pepsico and celebrity endorsements prevailed throughout the brand’s history, with
groundbreaking deals that set the standard for celebrity endorsements and history. Some of the
first brand awareness initiatives created for Pepsico
were by Kendall, including a photo in the newspaper
of Vice President Nixon holding a Pepsi at the
Moscow trade fair in 1959 (Reference For Business,
2016). Although not an endorsement, Pepsi became
the signature drink of the 1960’s with teenage baby
boomers as their
Figure 4: Michael Jackson endorsement (Telegraph, 2017) generation and by 1985 the Cola wars emerged with
the blind taste test of Pepsi and Cola. The brand realized the potential of influential figures in
society, and catapulted future marketing initiatives to connect with the generations.
Brand awareness only grew with the groundbreaking celebrity endorsement of Michael Jackson
in 1983 for $5 million dollars (Box, 2018). The king of pop was one of the first celebrity
endorsements consumer’s had seen, and was the highest paid endorsement agreement in history
until it’s time. Pepsico marketing and Michael Jackson’s tour were inseparable, and unified the
company with the youth, the generation and what consumers might see as trendy and it worked
with increased market shares and sales (Herrerra, 2009). The company pursued further
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THE POWER OF PEPSI endorsements with Beyonce, Britney Spears, Pink and Enrique Iglesias in a 2004 Super Bowl
commercial. This new success of brand awareness and celebrity appearances with Pepsi products
opened doors for future celebrity partnerships.
In a classic attempt to tap in with the youth, the endorsement of Kendall Jenner in 2017 comes
easily foreseen. In 2014 she was named one of the top 24 most influential teens by Time
magazine, and is the highest paid fashion model to date (Time Staff, 2014) The company’s intent
to encompass their global human rights and diversity efforts while connecting with pop culture
backfired in the short clip.
BRANDING FOR THE GENERATIONS
In the 1950’s Pepsico created a
permanent shift in their marketing by
the works of president Donald M.
Kendall to solidify the target market
and new brand identity as now “all
about the youth” (Sarosh, 2018). In
Figure 5: Pepsi’s Branding (Pepsico, 2011) 1958 the company’s slang featured “Be Sociable,
Have a Pepsi” and a few years later “Now It’s Pepsi For Those Who Think Young”.
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THE POWER OF PEPSI
The start of the 1960’s greeted a new exciting youth of the baby boomers, who’s general
optimism about the future formulated the brand’s slogans varying from “Feelin’ Free” and
“Come Alive”. This generation would later be identified as the “Pepsi Generation” by the brand
(Sarosh, 2018,). This continued into the 70’s vibe where the youth embraced Pepsi’s catchy
tongue twister slogans and the brand’s marketing perfectly mirrored the time’s attitude of pop
culture.
The 80’s marked the celebrity endorsements and continued the youthful connection with slang
like “The Choice Of a Generation”.
Pepsi branding in the 90’s capitalized on the Pepsi Generation connection, and featured
“Generation Next” and reconnecting the older phrase “For Those Who Think Young” once again
(Sarosh, 2018). The endorsements with pop culture icons continued into the 21st century and
Pepsi incorporated global unifying phrases of branding like “Every Pepsi Refreshes The World”.
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THE POWER OF PEPSI
THE ELUSIVE YOUTH
The younger generations have not proved any easier for Pepsi in recent years to connect with.
According to Adweek (2016) a brand once iconic for it’s youthful generational support now
deems it’s largest consumer base 65 or older. Rising health concerns for carbonated drinks have
also influenced this change, although the company has designed healthier food options and
objectives in their Performance With A Purpose efforts.
Millenials and the following youth differentiate their marketing and branding needs from the
generations which preceded them. According to Fromm, & Garton (2013), a salient quality of
solidifying trust with these generations is branding that cares. Engagement and partnerships with
reputable non-profits and charities are means of gaining this trust, while creating company
programs for humanitarian reasons internally as a company also prove appealing. They
continued to state over half of millennials, when asked, claim they would be more willing to
purchase a product if it was a brand they know
supports a cause. (Angone, 2014) also argued these
generations can “smell” fallacies and ingenuine
branding attempts to lure their support and
transparency and sincerity are key.
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THE POWER OF PEPSI Not only are these generations more curious about philanthropic and sustainability efforts, these
generations are also the most diverse in history with millenials 39% non-white and 48% in the
following generation (Richard & Parker, 2018). These new generations of youth are the most
educated in history, most culturally aware, and prepared to identify tone-deaf companies.
Figure 6: The multicultural millennial (Richard & Parker, 2018)
CORPORATE CHARACTER
MISSION STATEMENT
“CREATE MORE SMILES WITH EVERY SIP AND EVERY BITE” (Pepsico, 2019)
Pepsi’s mission statement is divided into five distinct categories of focus for consumers,
customers, communities, the world and shareholders all incorporating the importance of
inspiring happiness.
VALUES
One of the main points for Pepsico’s values revolve around global impacts of inclusion, diversity
and a sense of global togetherness as stated on their values page as “succeeding together”
(Pepsico, 2017). The company’s sustainability strategy from 2017 mirror’s the key values with
objectives to advance human rights globally, promote diversity, gender equality and promoting
women’s economic success (Pepsi Co., 2017).
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THE POWER OF PEPSI
PERFORMANCE WITH A PURPOSE
In 2016 Pepsico announced their Performance With A Purpose corporate social
responsibility agenda with goals to hit by 2025, and each year releases a report updating
accomplishments, mishaps and added growth to the program (Pepsico, 2016). The agenda
focuses on three key objectives: People, Planet & Product. Accordance with their “Live For
Now” campaign, the company’s investment in human rights on a global level can be seen in their
goals and sustainability reports towards the “People” objectives.
For the goal of 2025 Pepsi included
goals for human rights, fostering gender
equality, and diversity in the workplace.
For human rights goals, the company
sets global standards and goals for their
Global Human Rights Assessment
Program, Sustainable Sourcing Program
Figure 7: Pepsi’s Diversity Commitment (Pepsico, 2017)
and Sustainable farming program to ensure all employees are receiving respect
and human rights in the workplace (Pepsico, 2017). In the 2017 report they conducted successful
human rights audits on their Sustainable Sourcing program for 96% of their suppliers. Another
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THE POWER OF PEPSI human rights goal of the company is to provide access to safe water to 25 million people by
2025, which they revealed progress towards with their work in Jordan in 2017 by providing more
water to refugees and locals than consumed by the company (Pepsi Co, 2017).
Gender equality goals for the company include having 50% of management roles as women,
equal pay and a total of donations to reach $100 million dollars to empower women by 2025
(Pepsico, 2017). The company progressed towards these goals in 2017 with 39% of management
roles as women compared to 27% in 2016, donating 14.3 million dollars to empower women, the
gender pay gap was only 1% and the development of an internship program for young women in
Pakistan.
Lastly, Pepsico detailed their commitment to diversity where they set a goal for 2025 to increase
their percentage of senior executives of color greater than their current 36%. Pepsi continues
their global outreach for their corporate responsibility by also instilling several diversity
programs in Mexico including Different Abilities and Golden Years which both empower and
employ disabled individuals and seniors. Pepsi also helps fund educational opportunities for
underprivileged youth females in Turkey to prepare them for the workforce which is one of the
few global diversity efforts the company hopes to impact communities on small and large scales.
CORPORATE REPUTATION
Pepsico’s history of corporate reputation has championed over the years. In 2016, the company
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THE POWER OF PEPSI ranked # 97 in the top 100 CSR Global RepTrak with a score of 64.7 (Reputation Institute,
2016). According to the Harris Poll in 2016 Pepsico ranked #59, beating Starbucks and Chipotle
that year (The Harris Poll Releases Annual Reputation Rankings For The 100 Most Visible
Companies In The U.S., 2016). Many factors lead to the positive reputation of the brand,
including their reputation for steady dividend payments of 40 consecutive years and high
investments in healthier ingredient research (Lomax, 2013). Pepsi’s quick response and
resolutions to criticism also contributed to their reputation of listening to their stakeholder’s
concerns.
TIMELINE OF EVENTS
APRIL 4, 2017
● Pepsico posts “Life For Now Moments Anthem” two and a half minute video to Youtube
● ~12:00 PM negative feedback and criticism in comments and shares from viewers begins
on Twitter, Tumblr & Youtube
● ~7:00 PM Iesha Evans & Kendall Jenner comparison tweet goes viral on Twitter
Pepsico’s president Brad Jakeman deleted tweet about the excitement of the ad
APRIL 5, 2017
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THE POWER OF PEPSI ● 9:15 AM Bernice King Tweets criticism & tweet goes viral
● 10:44 AM Pepsico Tweets an apology for the add & announces the removal. The
company also apologizes for Jenner’s position.
● 1:30 PM Pepsico removes “Live For Now Moments Anthem” from Youtube & other
marketing outlets
RESPONSES
SOCIAL MEDIA RESPONSE: THE POWER OF PEPSI
According to the data analysis conducted by the Brandwatch React Team, the company received
1,677,000 mentions within the 24 hours of the ad posting which is over a 21,000% increase
(Gemma, 2017). With all this activity increase about the brand within the 24 hour time period,
58.6% of mentions were categorized as “negative”. Of these mentions, the most common word
used to describe the Pepsico ad with Jenner was “tone-deaf” which accounted for 77% of the
engagement according to Amobee technology (Schultz & Diaz, 2017). It may appear an
important point to mention the use of the word “tone deaf” in this scenario versus the usage of
the word “racist”. The company was not necessarily
pinned for a racist ad but more so criticized for a
lack of understanding the climate and misreading
their external stakeholders.
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THE POWER OF PEPSI Possibly the most influential viral tweet from the incident was from the daughter of Martin
Luther King, Bernice King, who tweeted an image of her father struggling with police that read:
“If only daddy had known the power of #pepsi” (Loon, 2018)
Figure 1: Tweet by Bernice King “The Power of Pepsi” (Loon, 2018)
The tweet received 182 million impressions (Schultz & Diaz, 2017).
MEDIA RESPONSE
Several news channels and newspapers covered the issue including the New York Times, and
The Washington Post and NBC News (Victor, 2017). The media focused heavily on the social
media reactions, Kendall Jenner’s involvement with previous endorsements, and the company’s
questionable decision to create the film in house (Smith, 2017).
PEPSICO’S RESPONSE
In response to the viral turmoil, the brand released a statement via Twitter on April 5, 2017 with
the statement that read:
“ Pepsi was trying to project a global message of unity, peace and understanding.
Clearly we missed the mark, and we apologize," Pepsi wrote in a statement on
Wednesday. "We did not intend to make light of any serious issue. We are removing the
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THE POWER OF PEPSI content and halting any further rollout. We also apologize for putting Kendall Jenner in
this position."
FINANCIAL IMPACTS
IMPACT ON STOCKS
Surprisingly during the
advertisement release and viral
outrage the company’s stocks
rose and immediately plummeted
following Pepsico’s apology and
removal of the video (“PEPSI
AD STOCK SURGES DURING
SCANDAL Plummets
Figure 8: Pepsi Stocks After Jenner Ad ( Pepsi Ad Stock etc., 2017) After Apology”, 2017).
IMPACT ON SALES
Although the “Live For Now” campaign caused brand purchasing intentions to be an all time low
at 28%, it did not seem to impact the sales (Marzilli, 2017). According to their end quarter sales
of June 2017, the company still earned revenue with a 2% increase (Bomey & Meyer, 2017). The
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THE POWER OF PEPSI brand’s total revenue for the quarter was $2 billion and was a 5% increase compared to the
previous year.
The brand’s immediate response to communicate an apology and pull the ad might have been
what saved consumer buying willingness. The overall purchasing willingness percentage only
changes by 1% preceding and following the crisis, and was most likely do to the response time
(Carufel, 2017). Nickelsburg (2018) argued the youthful generation’s dollar vote might not be as
strong as previously thought for sales impacts, since only 38% of millennials in the study
reported a stronger purchasing intention based on corporate social responsibility for human and
civil rights.
IMPACT ON REPUTATION
The company’s reputation according to the Global
CSR RepTrak top 100 ranking did not changed
from the ranking in 2016 to 207 at #96 but the score
dropped from 64.7 to 63.4 (Global CSR RepTrak
100, 2017). Somehow on the Harris Poll the
company ranked higher a year later from #45 to #59
for corporate reputation (“THE 2018 HARRIS
POLL RQ SUMMARY REPORT”, 2018). The
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THE POWER OF PEPSI only conclusion that might be made from this Figure 9: Pepsi’s Willingness to Buy Pepsi (Carufel,
2017)
seemingly lack of reputation change was due to the response time of the company.
According to Comcowich (2017), 85% of consumers develop their opinions about brands
depending on how they respond to a crisis. In Pepsi’s scenario, their quick response to the ad and
removal emphasized their quick method to resolve the issue, and might have been the reason
their brand suffered few financial and reputational losses.
THE IMPORTANT MULTICULTURAL PERSPECTIVE
The “Live For Now” ad presented a clear message of Pepsi’s lack of understanding the youth and
their multicultural youth consumers. Since this ad was created in house, many questioned
whether a lack of cultural diversity within the campaign lead to the tone deaf impression (Victor,
2017). Marketing Week author, Hobbs (2017), argues proper market research with the
appropriate protest and activist groups and diverse populations might have prevented the
situation with diverse perspectives. Millenials are a multicultural new market the company
strives to connect with.
MOVING FORWARD
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THE POWER OF PEPSI Pepsico, with a rich history of philanthropy, globally advocates for diversity, human rights, and
equality, erroneously promoted their values through the one-sided “Live For Now” campaign.
The company once known as “The Brand of Generations” struggles to connect with the
multicultural, socially conscious, and youthful stakeholder of today. In an attempt to express
their global corporate social responsibility efforts, they accidentally appropriated a social protest
movement.
Although the company lacks past offenses of appropriation to capitalize on social issues,
companies of Pepsico’s enduring high reputation must evolve to understand their changing
stakeholders to accurately express their intentions of global unity. It appears from this scenario,
the company was forgiven for the tone-deaf campaign according to the small impact of brand
reputation and sales, but the impact of future repeat offenses is unknown. Luckily, the majority
of stakeholder’s impression of this situation responded with the term “tone-deaf”. Although a
negative response, many other viral reactions with top mentions charting “racist” might deem
less forgivable, and the company’s perceived lack of cognizance for the social climate might
have been slightly more permissible for stakeholders.
The future of Pepsico’s expression of values must diversify their market research to
communicate with the progressive youth. Millenials and the following generations are more
concerned with corporate social responsibility than the generations before them and Pepsico’s
Performance with A Purpose efforts appeal to these growing priorities. A company whose staple
consumer once consisted of the younger demographic needs to evolve their team’s angle for
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THE POWER OF PEPSI expressing initiatives. If this diversification and communication of efforts are achieved, Pepsico
might claim the youth as their “Pepsi People” once again.
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Time Staff. (2014, October 13). Most Influential Teens 2014. TIME. Retrieved from
https://time.com/3486048/most-influential-teens-2014/
Victor, D. (2017) Pepsi Pulls Ad Accused of Trivializing Black Lives Matter. New York Times.
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https://www.nytimes.com/2017/04/05/business/kendall-jenner-pepsi-ad.html
2017 Global CSR RepTrak. (2017, September). Retrieved fro
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%20Reputation%20Institute.pdf
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THE POWER OF PEPSI
APPENDIX
Coca-Cola and Pepsi Are Both Losing Millennial Fans from Adweek (Retrieved June 2019).
https://www.adweek.com/brand-marketing/coca-cola-and-pepsi-are-both-losing-millenni
al-fans-174956/
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THE POWER OF PEPSI
TEACHING NOTES Target group: Graduates, Undergraduates
SYNOPSIS
On April 4, 2017 Pepsi released their two and a half minute campaign “Live For Now” on Youtube featuring reality television star Kendall Jenner as a young model who leaves work to end a protest by handing a police officer a Pepsi. (Monllos, 2017). Figure 1: Jenner stars in commercial (Smith, 2017)
Within 24 hours of the posting of the video, social media outlash spiraled and criticism snowballed to all media outlets, criticizing the skits trivialization of the Black Lives Matter Movement. (Smith, 2017).
Since the launch of Pepsico’s Performance With A Purpose 2025 Agenda, for over a decade one of the brand’s key objectives revolved around positively impacting and enriching the lives of people (Pepsico, 2016). In an attempt to reconnect with the elusive millenial youth and generation Z through Kendall Jenner and express their brand values of global peace, the company misfires by the perceived appropriation of a national protest movement with a privileged white influencer. LEARNING OBJECTIVE Understand the underlying causes of the negative feedback to the ad, and how the CSR might have been expressed more appropriately. KEY ISSUES
◙ Social Protest Appropriation ◙Stakeholder perceptions ◙Understanding target demographic ◙CSR Communication
DISCUSSION How could Pepsico communicated their global corporate social responsibility more appropriately to the younger audiences?
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THE POWER OF PEPSI As conscious consumers, younger generations are less tolerant of cultural appropriation and aware of the social climate. Pepsico should have expressed their promotion of global peace and unity in a way that did not trivialize a social movement. Was Kendall Jenner an appropriate endorsement for the promotion of their sustainability efforts? Although Jenner is a strong influencer of the youth, her position to promote global peace might have been out of place. Regardless, there is no hard evidence to suggest it was right or wrong, rather an opinion of strategy.
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