Harnessing Distribution to Enhance Inclusive Growth of Women Entrepreneurship
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14-06-2009, 02:10 AM


Harnessing Distribution to Enhance Inclusive Growth of Women Entrepreneurship
*Dr. Moli P. Koshy
This paper outlines the distribution networks and hurdles of women entrepreneurs in
selling their products and the need to harness the distribution function to enhance the
inclusive growth of women entrepreneurship in Kerala.
Introduction
Traditionally, women tend to be withdrawn from the main stream of development and
stay in the background literally hiding their lamp under the bushel or restraining their
talent in a safe proximity of their operation. Women in our country have always remained
a victim of discrimination and neglect. The need for women to work outside the home is
getting increased day by day for maintaining better living standards for the family and the
society as a whole. While in the rural areas, underemployment is a prevalent
phenomenon; the urban situation is characterised
by
a high level of open
unemployment. The Eleventh Five-Year plan (2007-2012) aims to achieve faster and
more broad-based inclusive growth in India (GOI, 2006). It is against this background
that the role of women entrepreneurship arises.
Most of the women entrepreneurs are awed at the thought of marketing their products.
According to an ILO study (1988), women around the world face more obstacles than
men in setting up their businesses. Women face more problems than men in acquiring
technical and entrepreneurial competencies (Easwaran, 1992) and marketing constraints
scored a second place to financial constraints, when the resources constraints of women
entrepreneurs were studied in the state of Haryana (Singh,1992). A survey conducted
in 1995 among the women entrepreneurs in Kerala revealed that raw material stocking
and marketing were the major problems of their small scale units. The cottage industries,
such as, those engaged in making mats and baskets, where female employment was very
high, failed because of reasons of inadequate availability of raw materials and working
capital problems.
An industry, where entry is easy because of low technical threshold, is characterized by
overcrowding of manufacturers and consequently subnormal profits, making it
impossible for small firms to grow significantly (Eugene and Morse, 1965). This is
especially true for the women entrepreneurs who generally choose low technology and
low risk project and implimentations for their business units. A close look at the problems of most of the
small scale units, particularly the women entrepreneurial units reveal the fact that the
main element of most of the sick units is not finance but marketing.
*Reader
School of Management Studies, Cochin University of Science & Technology, Kochi “ 682 022
Email: mollykoshy@cusat.ac.inPage 2

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
2
Most of the small scale units lack resources to undertake vital tasks, such as advertising,
sales promotion and establishment of distribution channels. Poor sales realisation,
defective pricing policy, unscrupulous sales/purchase practices etc., are cited as the
marketing problems leading to industrial sickness (Narayanamurthy, 1990). Vaidya
(1990), assigned reasons for failure of most of the small units in the market, to incorrect
product selection, launching, pricing and sales promotion.
The Distribution Channel
Distribution channel is concerned with the transferring of goods and services from the
producers to the final buyers. Broadly speaking, there are two ways of doing this. First,
the direct sale to consumers by the manufacturer, in which case the goods remain the
property of the producer till they are sold to the customers. The second method of selling
the goods involves middlemen of various categories. In a marketing strategy, selection of
a distribution channel is important as it exercises a powerful influence on the remaining
elements of the marketing mix (Kotler, 2007). The choice of distribution channel depends
on the product and the level of customer satisfaction desired.
Women business owners under-performed on both survival and growth dimensions,
which raised the crucial question of whether initial goals for the business influenced
financial outcomes (Srinivasan, Woo, and Cooper,1994). Women in the small scale
sector face problems in marketing their products as their resources and experiences are
limited and are unable to make their products reach far off destinations where their
products could be of demand. Dependence on a limited number of customers and single
or a limited number of products put constraints on their
formulation of strategies
regarding the marketing mix (product, price, place and promotion). The products which
are placed with low margins in an already overcrowded market with competing products
fail to bring in enough returns due to lack of widespread reach of the products. For
instance, the ready made garment units of women entrepreneurs show less growth rate in
comparison with business units in most of the other products category (Koshy and
Joseph, 2000).
Even though the Government of India has set up agencies such as National Small
Industries Corporation (NSIC) Market Development Centres and Small Industries
Development Corporation (SIDCO) to assist the small scale entrepreneurs, the assistance
of these agencies are not reaching or availed by most of the women entrepreneurs. Most
of them have very tiny units operating in very small niches.
In view of the constraints in getting wide distribution coverage, the distribution of
products of the small scale industrial units of women entrepreneurs was considered for
this study.
Methodology
This study had the specific objectives to understand the type of distribution channels used
by the women entrepreneurs in the Small Scale Industrial (SSI) sector and the factorsPage 3

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
3
influencing the choice of the channel. A random sample of 54 SSI units of Ernakulam
district of Kerala was selected for this purpose. Ernakulam district stood at the highest
position in terms of total number of SSI units, employment provided, investment and
value of production (Economic Review, 2007). Units that have been in business for at
least five years alone were selected as samples. Data were collected by interviewing
the respondents using a questionnaire. The industrial units were grouped into five,
namely, plastic-rubber; readymade garments; concrete-wood-carton; food-chemicals; and
electrical units. The entrepreneurs were asked to rank the methods used, attributes
considered, problems faced and so on, giving a rank of one to three in the order of
decreasing importance. Weighted scores and average weighted scores were used to
express the degree of feeling, attitudes and frequencies.
Distribution Channels
An analysis of the levels of distribution channels used by the sample units (Table 1) show
that 35 % of the sample units, including the three ancillary units, have a zero-level
channel i.e., involved in direct sales. Direct sales and the use of retailers were found in
about 20 % of the represented units, where the retailers are operating in the nearby areas
of the marketing organisation. Thus, more than 50 % of these entrepreneurs are operating
with no channel members or using retailers to a very limited extent. Even in the units that
market food products and products such as detergents direct distribution and the service
of limited number of retailers is significant.
One unit in rubber products which sold to industrial customers only used agents for
distribution. Unlike the large scale sector which has formalized the distribution, majority
of these units resorted to more than one form of distribution channel to sell their wares.
About 13% of the readymade garment units, 40% of the concrete-wood-carton units,
11.8% of food-chemical units and 11% of the total number of units used direct sale and
agents for distribution. Twenty percent of the plastic-rubber units, about 19% and 6% of
of the readymade garments units and food-chemical units respectively were using direct
sale to customers and agent-retailer customer channel, the total of this manner of
distribution being practiced in 11% of the entrepreneurial units.
One unit in food-chemicals, two units in electrical and three units of the total number
used direct sale to customers in combination with wholesaler-retailer-customers channel.
One unit manufacturing plastic-rubber products, adopted agent-retailer-customer chain
and wholesaler-retailer-customer channel in distributing their products. One unit in
plastic-rubber and two units in readymade garments categories were making use of agent-
retailer-customer and retailer-customer channels of distribution representing 5.6% of
the total number of units. One unit in plastic-rubber products group went for retailer-
customer and wholesalers-retailers-customers channels of distribution.
A combination of different channels was the predominantly used manner of distribution
in which direct sale along with retailers to customers channel (20%of the total) came nextPage 4

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
4
to direct distribution alone. The combination channels of distribution use was the
highest in the food-chemicals unit.
Table 1: Distribution Channels Used
proportion (%) of the SSI units
Sl.
No.
Channels used
Pl-
Rub
(10)
R.Gar
(16)
Con-
wood -
cart
(5)
Fo- Ch
(17)
Elec
(6)
Total
(54)
1
Direct sale (zero-level)
-
43.8 (7)
60 (3)
5.9 (1)
33.3 (2)
24 (13)
2
Agents-customers
10 (1)
-
-
-
-
1.9 (1)
3
Retailers “ customers
-
-
-
17.7 (3)
-
5.6 (3)
4
Direct sale + agents
-
12.5 (2)
40 (2)
11.8 (2)
-
11.1 (6)
5
Agents+ agents-
retailers-customers
-
-
-
5.9 (1)
-
1.9 (1)
8
Direct+ agents-retailers-
customers
20 (2)
18.8 (3)
-
5.8 (1)
-
11.1 (6)
9
Direct+ retailers-
customers
10 (1)
12.5 (2)
-
41.2 (7)
16.7 (1)
20.4 (11)
10
Direct+wholesalers-
retailers-customers
-
-
-
5.9 (1)
33.3 (2)
5.6 (3)
11
Agents-retailers-
customers+wholesalers-
retailers-customers
10 (1)
-
-
-
-
1.9 (1)
12
Agents-retailers-
customers+retailers-
customers
10 (1)
12.5 (2)
-
-
-
5.6 (3)
13
Retailers-
customers+Wholesalers-
retailers-customers
10 (1)
-
-
-
-
1.9 (1)
14
Manufacturing only/job
work
30 (3)
-
-
5.9 (1)
16.7 (1)
9.3 (5)
Abbreviations used: Pl-Rub “ Plastic & Rubber; R.Gar “ Readymade Garments;
Fo-Ch “ Food &Chemicals; Elec “ Electrical
Figures in parentheses indicate the number of units
Geographical coverage / Segmentation of the market
Local market targeting is done by most of the entrepreneurs and about 55 percent of the
sample units market their products within a very small local area and three units in the
rubber products group are ancillary units (not included in the table). However, the
geographical coverage (table 2) is product specific to a great extent and this is evinced
especially in the case of garment units where women enter the business with a little skill
and very meagre resources. About 88 percent of the garment units have very limitedPage 5

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
5
coverage of a local area. While all of the units manufacturing rubber and plastic products
stretch their distribution out of local area, about 60 percent of food-chemical units and 33
percent of the electrical units served only a very limited local geographical area.
Only 19 percent of the units make a state level presence and only four units
manufacturing plastic-rubber products have any presence outside the state. One unit
manufacturing rubber foam products limited distribution to outside Kerala and only one
unit from the food products manufacturing group sold its products in the middle east
countries owing to some contacts there. In short, the products manufactured by the
sample units were having a very limited geographical coverage.
Table 2: Geographical coverage in distribution
Product groups (%)
Sl.
No.
Geographical
coverage
Pl-
Rub
(7)
R. Gar
(16)
Con-
wood -
cart
(5)
Fo - Ch
(17)
Elec
(6)
Total
(51)
1
local
-
87.5 (14)
40 (2)
58.8 (10)
33.3
(2)
54.9 (28)
2
Same district
14.3 (1)
-
20 (1)
5.9 (1)
-
5.9 (3)
3
Up to 3 districts
14.3 (1)
12.5 (2)
20 (1)
17.7 (3)
16.7
(1)
15.7 (8)
4
State of Kerala
14.3 (1)
-
20 (1)
11.8 (2)
50 (3)
13.1 (7)
5
Outside the
state & Kerala
42.9 (3)
-
-
-
-
5.9 (3)
6
Outside the
state only
14.3 (1)
-
-
-
-
2 (1)
7
National &
International
-
-
-
5.9 (1)
-
2 (1)
Abbreviations used: Pl-Rub “ Plastic & Rubber; R.Gar “ Readymade Garments;
Fo-Ch “ Food &Chemicals; Elec “ Electrical
Figures in parentheses indicate the number of units
Distribution Arrangement
Physical distribution consists of all those activities concerned with moving the right
amount of the right product to the right place at the right time. The distribution
arrangement depends on the product characteristics, resources of the unit, and market
needs. A unit has to bear certain costs in transportation and storage of the finished goods.
A suitable system has to be worked out according to the marketing needs of the unit
while minimizing the costs. An analysis of the responses with regard to distribution
arrangement of the sample units are presented in table 3.Page 6

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
6
Eighty percent of the concrete-wood “carton and 50 percent each of readymade garments
and electrical units were having own outlets or sold from own premises. Only about 12
percent of the food-chemical units had own outlets and this product group go for a
combination of distribution channels as seen earlier.
Involvement of husband and other family members along with self was seen the most in
plastic-rubber units followed by the food-chemical units. The least involvement of family
members was seen in the case of readymade garments units. Sales staff assisted the
distribution along with other arrangements in about 60 percent of the total number of
units, even though the number of sales persons employed was very limited in most of
the cases.
.
Table 3: Distribution Arrangement
Product groups (%)
Sl.
No.
Distribution
Arrangement
Pl-
Rub
(7)
R. Gar
(16)
Con-
wood -
cart
(5)
Fo - Ch
(17)
Elec
(6)
Total
(51)
1
Own
outlet/factory/godown
sales
(2)
28.6
(8) 50
(4) 80
(2)
11.8
(3) 50 (19)37.3
2
Husband, self &
family members
(2)
28.6
(2)
12.5
(1) 20
(4)
23.5
-
(9) 17.6
3
Sales staff
-
-
-
-
(1)
16.7
(1) 2
4
Own sales vehicle
-
-
-
-
-
-
5
1+2
-
(3)
18.8
-
(2)
11.8
-
(5) 9.8
6
1+3
-
-
-
(1) 5.9
-
(1) 2
7
2+3
-
(2)
12.5
-
-
-
(2) 3.9
8
3+4
(2)
28.6
-
-
(3)
17.6
(1)
16.7
(6) 11.8
9
1+2+3+4
(1)
14.3
(1) 6.3
-
(5)
29.4
(1)
16.7
(8) 15.7
Selection of Middlemen
The selection of middlemen in the distribution of their products involved a lot of
deliberations and weighing of various parameters on the part of the small units. It is
difficult to locate and identify agents, retailers or wholesalers who would materialize the
sales desired by the entrepreneurs. The entrepreneurs have to use their own knowledgePage 7

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
7
and judgement to make a final selection of channel members after encountering a lot of
constraints.
Thirty two units of the sample under the study were using middlemen in selling their
products. The various parameters for selection of middlemen were listed and the
respondents were asked to rank up to 3 in the order of importance attributed to each
criterion. The ranking were given a weighted score of 3, 2 and 1 respectively and the
average weighted score sector-wise for each parameter was calculated and presented in
table 4.
Table 4: Important parameters in selection of middlemen
Product groups/Average weighted scores
Sl.
No.
Parameters
Pl-
Rub
(5)
50 %
R. Gar
(8)
50 %
Con-
wood -
cart
(1)
20 %
Fo - Ch
(15)
88.3 %
Elec
(3)
50 %
Total
(32)
1
Goodwill
0.9
1.4
3
2.3
1.7
1.9
2
Prompt
payment
1.6
1.9
2
1.3
1.7
1.7
3
Promotional
support
1.7
0.8
-
2.1
1.7
1.3
4
Cost of using
middlemen
0.7
0.1
-
0.3
-
0.2
5
Highest price
offer
0.7
-
-
-
-
0.1
Maximum average score that can be assigned to any single factor is 3
Abbreviations used: Pl-Rub “ Plastic & Rubber; R.Gar “ Readymade Garments;
Fo-Ch “ Food &Chemicals; Elec “ Electrical
Figures in parentheses indicate the number of units
The important considerations for selection of middlemen were as follows:
1. Goodwill
Goodwill of the middlemen was the most weighted criterion with an average score of
1.9 for the whole group. Maximum score of 3 was assigned by the concrete-wood-
carton group followed by the food-chemicals group (2.3). The plastic-rubber units
gave the least score, the nature of the product attributing to such a consideration.
2. Prompt payment/financial position
Prompt payment and financial position of the middlemen scored second highest in
total. Considering the number of units falling in each category ,almost all the units
score this factor very significant next to goodwill.
3. Promotional support to the productPage 8

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
8
The food chemical units ranked (2.1) this aspect the most followed by electrical and
plastic rubber units (1.7).
4. Cost of using middlemen
Cost of using middlemen was not stated to be a very important factor and in all
groups the score averaged to less than one.
5. Highest price offer
This factor was scored only by the units in the plastic- rubber category and the other
units did not give much weightage to this factor. This can be correlated with the use
of middlemenâ„¢s services by the small units. Most of them have very informal and
irregular arrangements with the middlemen.
Eighty eight percent of the food-chemical units, falling under Fast Moving Consumer
Goods (FMCG) sector were using middlemen and it is this type of units that are most
affected by the ˜Place (distribution) “ P™ of the marketing mix.
Distribution Intensity
In terms of the degree of intensity, distribution is classified as mass distribution, selective
distribution, or exclusive distribution. In general, the small units are constrained to limit
the intensity of distribution.
The extent of distribution in terms of number of outlets stocking products of the sample
units are presented in table 5. Out of the 32 units that used middlemen, about 44% units
had to the extent of 10 retail outlets, 22% had a range of 11-100 outlets and 34% units
had more than 100 retail outlets stocking their products. Obviously, food-chemical units
had more retail outlets in comparison with the other units.
Table 5: Intensity of distribution
Product groups
Sl.
No.
No. of outlets
Pl-
Rub
(5)
R. Gar
(8)
Con-
wood -
cart
(1)
Fo - Ch
(15)
Elec
(3)
Total
(32)
1
Upto10
(2) 40%
(6) 75%
(1)
100%
(5) 33.3%
-
(14)
43.8%
2
11 - 100
(2) 40%
(1)
12.5%
-
(2) 13.3%
(2)
66.7%
(7) 21.9%
3
Above 100
(1) 20 %
(1)
12.5%
-
(8) 53.3%
(1)
33.3%
(11)
34.4%
Abbreviations used: Pl-Rub “ Plastic & Rubber; R.Gar “ Readymade Garments;
Fo-Ch “ Food &Chemicals; Elec “ Electrical
Figures in parentheses indicate the number of units
Influencing Factors in Choosing the Location of Retail Outlets
Own retail outlets give the entrepreneurs a boost in the distribution of products. Own
outlets give them the freedom to display the products according to their imaginations,Page 9

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
9
motivate the sales people, get a direct feedback from the customers about product
attributes, observe purchase and post purchase behaviour of the consumers. These are
great advantages in marketing the products when the entrepreneur is serving a local
market.
Sixteen entrepreneurs were having own retail outlets and they were asked to give the
most influencing factors in the selection of their retail outlets. The frequency of the
responses is given in table 6. Proximity to home, availability and good location were
considered of equal importance and one respondent had her own shop and hence
continued to sell her products from the same outlet.
Table 6: Factors influencing the choice of location of own retail outlets
Sl. No.
Factors considered
No. of units (%)
1
Near to home
(5) 31.3
2
Availability
(5) 31.3
3
Own shop
(1) 6.3
4
Good location
(5) 31.3
5
Total No. of sample units having retail outlets
(16) 100
Figures in parentheses indicate the number of units
Because of the nature of the market they served, the smaller units in readymade garments,
foam bed manufacturers, wood products manufacturers, bakery and bag making units
were having own retail outlets.
Motivating Middlemen
The sale of a product depends to a large extent on the interest shown by middlemen in
pushing the product through. The task of motivating the middlemen in a competitive
market is rather complex and difficult. The common forms of incentives for motivating
the middlemen include higher margin, easy credit terms etc. Table 7 presents the
distribution of incentives used by the units to motivate middle men.
Table 7: Incentives for middlemen
Product groups/Average weighted scores
Sl.
No.
Incentive
Pl-
Rub
(5)
R. Gar
(8)
Con-
wood -
cart
(1)
Fo - Ch
(15)
Elec
(3)
Total
(32)
1
Commission
2.2
2.5
2
2.5
2.3
2.3
2
Credit facility
1.7
0.8
2
2
2
1.7
3
Discounts
0.7
0.8
1
1.3
2
1.2
4
Free gifts
0.2
-
-
0.1
-
0.1
Maximum average score that can be assigned to any single factor is 3
Abbreviations used: Pl-Rub “ Plastic & Rubber; R.Gar “ Readymade Garments;Page 10

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
10
Fo-Ch “ Food &Chemicals; Elec “ Electrical
Figures in parentheses indicate the number of units
Commission was found to be the most influencing incentive in motivating the
middlemen. High average weighted scores are seen in all the groups indicating its
significance in motivating the middlemen. Credit facility was stated second in order of
importance as a motivating factor. Discount offer was third in order with quantity
discounts and cash discounts as the most common forms of discounts offered by the
units.
Sales / Purchases on Credit
Liquidity is concerned much with the realisation of the sales revenues and being very
small puts constraints on the tiny units to offer products on credit. About 11% of the
small units sold on payment only. Even the units in the concrete-wood-carton category
80 % of the units sold only less than 25% of their products on credit. More than fifty
percent of the total sales on credit was offered in 83% of electrical units, and 65% of
food-chemical units. In other cases the corresponding sales were less than 50%.
Longer credit periods (2-3 months) prevailed in the readymade garments group to the
final customers, the competition is more. Credit facility on the purchases of raw
materials gives the entrepreneurs an advantage in marketing the products. Forty percent
of the total number of units did not receive or avail any credit facility. Most of these
women entrepreneurs purchase their raw materials once in two weeks or a month from
the cityâ„¢s wholesale markets. Two weeks to one month credit on purchases was given to
about 30% of the units. Seventy percent of the garments units was not receiving or
availing any credit mainly because of the very small scale operations and nature of their
business.
Conclusion and Implications
Direct sale to consumers is a prominent form of distribution for the
women
entrepreneurs. This restricts the organisations in their growth as the entrepreneurs are
constrained to give more attention to other functions of marketing. The use of
distributors or agents is limited and almost 50% of the sales was made from the factory or
own outlets. Nearness to home was a major factor in the choice of own outlets which
emphasizes the dual responsibility of women entrepreneurs of taking care of the home
and the business.
The researcher came across many women entrepreneurs who said,we will make the
product, someone please sell it for us. Selling the products is still a task that the small
scale women entrepreneurs require more confidence and skill development due to the
inhibitions that have inculcated in them and the limitations of scale economies.Page 11

Albertian Institute of Management National Seminar on Inclusive Growth
Role of Corporates, SMEs, Governments,NGOsand SHGs 30
th
and 31
st
January 2009
pp. 166-176
11
Initiatives on the part of the women entrepreneurs to form clusters, fighting the mutual
competition, and joining together to enhance the distribution coverage will bring more
profits to each one as the total sales can be increased. We can take a lesson from the
yesteryears rivals, the multinational companies who are going for strategic alliances to
reach a larger market. Some clusters are found in certain product groups, such as
garments, the benefit of which are reaching only a very small segment of the
entrepreneurs. The assistance and the services given by the governmental agencies as
stated earlier do not reach the tiny units as it should have, to make a difference in the
prospects of the small scale units. Alliances in the form of clusters or other forms to
increase the distribution coverage can improve the growth rate and survival of the tiny
and small scale entrepreneurial units thus enhancing the inclusive growth of women
entrepreneurship.
References
Business Deepika (1996), Vanitha Vyavasayam Chuvadurappikkunnu (Women
Enterprises Gaining Foothold), Dec. 9 -15.
.Easwaran, Sunanda (1992), Development of Microenterprises by Women, New Delhi:
The British Council and the Indian Institute of Management, Ahmedabad, p.82.
Eugene, Stanley and Morse, Richard (1965), Modern Small Scale Industry for
Developing Couintries, New York, Mc Graw Hill, p. 372.
Government of India, (2006), Towards Faster and More Inclusive Growth: An approach
to the 11
th
Five Year Plan , Planning Commission, New Delhi.
Koshy, Moli P. and Joseph, Mary (2000), Growth Patterns of Small Scale Units of
Women Entrepreneurs: A Study of Ernakulam District “ Kerala, SEDME (Small
Enterprises Development, Management and Extension, vol.27, No.2, June, 2000,
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