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Editorial

Journal of Service Research


2020, Vol. 23(4) 401-408
The Future of B2B Customer Solutions in a ª The Author(s) 2020
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Post-COVID-19 Economy: Managerial DOI: 10.1177/1094670520960230
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Issues and an Agenda for Academic Inquiry
Edward U. Bond III1, Ad de Jong2, Andreas Eggert3 ,
Mark B. Houston4, Michael Kleinaltenkamp5 , Ajay K. Kohli6,
Thomas Ritter2, and Wolfgang Ulaga7

Abstract
Customer solutions have been touted as the next service-growth engine. Yet, pursuing a solutions strategy can seriously backfire
in times of severe crises. The massive economic shock wave brought on by the recent COVID-19 pandemic challenges some of
the presumed advantages of business-to-business customer solutions and reveals downsides of these complex offerings to which
academics and managers alike may have given insufficient attention. This editorial focuses on goods-centered companies’ recent
foray into the solution business and the pressing managerial questions regarding the evolution of solutions as the world begins to
emerge from the COVID-19 pandemic. Based on the key characteristics of solution offerings, we identify seven potential
downsides of customer solutions that are revealed by the current global crisis and develop promising research avenues mirroring
these challenges. In each area, we propose three illustrative sets of research questions that may guide scholars and provide
insights to practitioners for positioning solution businesses in the post-COVID-19 “next-normal” world.

Keywords
COVID-19 pandemic, customer solutions, performance-based contracting, servitization

The unprecedented crisis triggered by the coronavirus pan- providers must rethink service-growth strategies designed in a
demic has left companies around the globe struggling to protect pre-COVID-19 world. The massive shock and subsequent eco-
employees, maintain operations, prevent supply-chain break- nomic crisis brought on by the pandemic challenge some of the
downs, safeguard cash flows, and serve customers. Travel presumed advantages of business-to-business (B2B) customer
restrictions and social distancing measures have created serious solutions. They reveal downsides of these complex offerings to
hurdles for solution providers who deliver customized and inte- which academics and managers alike may have given insuffi-
grated combinations of goods and services to customers. The cient attention. While solutions can take different forms, we
difficulties are especially acute for firms that enter into con- focus on those that reflect a combination of goods and services
tracts guaranteeing customers certain end results or outcomes. provided by, for example, firms that strategically transform
For example, information technology solution providers—who their traditional goods-centric business model into one that is
customize and integrate hardware, operating systems, applica- service-centric—that is, servitization (Raddats et al. 2019).
tion software, and ongoing service/support—often guarantee
customers certain capacities, uptimes, and service response
times. While outcome-based contracting and performance-
based solutions have been touted as the next service-growth 1
Bradley University, Peoria, IL, USA
2
engine, such strategies can seriously backfire in times of crises Copenhagen Business School, Frederiksberg, Denmark
3
when customer operations stand idle. Solutions that should University of Paderborn, Germany
4
Neeley School of Business, Texas Christian University, Fort Worth, TX, USA
have locked in predictable recurring revenues and profits may 5
Freie Universität Berlin, Germany
instead overburden providers with unforeseen risks, high fixed 6
Scheller College of Business, Georgia Institute of Technology, Atlanta,
costs, and sharply lower revenues. Similarly, customers who GA, USA
7
rely on service-intensive solutions sourced from providers may INSEAD, Fontainebleau, France
find themselves stranded because of supply-chain disruptions
Corresponding Author:
experienced by providers. Wolfgang Ulaga, INSEAD Europe Campus, Marketing Area, Boulevard de
As customer investments grind to a halt, solution projects Constance, 77305 Fontainebleau, France.
are postponed, and budgets are dramatically reduced, solution Email: wolfgang.ulaga@insead.edu
402 Journal of Service Research 23(4)

We first delineate the key characteristics of solution offer- Potential Downsides of Solutions
ings based on recent definitions. Next, we identify important in a COVID-19 World
potential downsides of customer solutions that have been
revealed by the COVID-19 crisis. Finally, we identify research Disruptions due to COVID-19 revealed several downsides of
directions to guide scholars and provide insights to managers customer solutions. Many of these were previously underap-
for positioning solution businesses in the post-COVID-19 preciated. We discuss seven downsides summarized in Table 1
world. (Column 2).
First, as complex solutions’ offerings comprise integrated
tangible and intangible components, the interdependence
Customer Solutions: A Rich Research among solution components greatly magnified supply-chain
disruptions as the COVID-19 pandemic evolved. Second, as
Domain
solution offerings are typically tailored to customer-specific
Much have been written about B2B companies’ service-growth problems, customers were unable to quickly acquire solutions
strategies as solution offerings have mushroomed in a broad from alternative sources, and providers were unable to swiftly
cross section of industries such as automotive manufacturing, redeploy offerings tailored to individual customers in one area
aviation, health care, and telecommunications. Concomitantly, to customers in other areas. Therefore, the COVID-19 crisis
research on B2B customer solutions has emerged as an attrac- simultaneously shut down solution deployment everywhere,
tive subarea in both academic and practitioner journals (e.g., leaving suppliers and customers with no alternatives. Third,
Eggert et al. 2014; Tuli, Kohli, and Bharadwaj 2007; for impor- given that solution contracts generally involve the transfer of
tant recent advances, see Colm, Ordanini, and Bornemann some or all outcome risk from customers to providers, the
2020; Macdonald, Kleinaltenkamp, and Wilson 2016; Raja COVID-19 crisis often left suppliers with excessive risks, costs
et al. 2020; Ulaga and Kohli 2018; Worm et al. 2017). (e.g., idle equipment), and sharply lower revenues (or none at
In general, there is widespread belief that manufacturers of all).
many products can achieve growth and profitability by servi- Fourth, providers and customers often contractually agree
tizing their products into end-to-end solutions. Much of the upon unique and customized Key Performance Indicators (KPI)
managerial and scholarly attention is predicated on this belief. and gain-sharing mechanisms linked to jointly defined out-
Certainly, some point to slow adoption of solutions by custom- comes. While such metrics and mechanisms naturally attempt
ers, while others investigate barriers to profiting from solutions to anticipate future changes and allow for adjustments, the
and boundary conditions for successful implementation (e.g., COVID-19 crisis clearly revealed that customer needs evolved
Worm et al. 2017). Nonetheless, the COVID-19 crisis suggests faster than many solution providers and customers had antici-
that the downsides of solutions may have been underestimated. pated. This dynamism generated new customer expectations
that providers found hard to satisfy. Solution agreements
lacked the flexibility and responsiveness needed in a crisis.
Crisis-Triggered Challenges for Solutions Fifth, customer solutions require an alignment of goals and
Solution contracts typically allow customers to rapidly adjust interests among providers and customers. Yet, during the
purchases as their sales decline—and this is often a key selling COVID-19 crisis, it became apparent that providers and cus-
argument used by providers; yet, such terms put providers tomers at times lost sight of their mutual goals and objectives.
under enormous pressure during a crisis. For example, when More often than not, they relapsed into a self-interest focus and
commercial jets were largely grounded because of COVID-19 resorted to an “us-versus-them” game.
concerns, power-by-the-hour arrangements left manufacturers Sixth, providers and customers engage in a process to cocre-
of jet engines without revenues. Likewise, when public trans- ate solutions that resonate with customers’ needs. This requires
port omnibuses operated at a fraction of their normal capacity, providers and customers to integrate many of their resources
pay-per-mile contracts left tire manufacturers struggling. Such and processes and calls for close interaction with each other
contracts work when the economy is humming but may pose throughout the solution design, deployment, and postdeploy-
severe financial challenges during a crisis. ment process. The COVID-19 pandemic, however, led to travel
Table 1 provides an overview of downsides of customer restrictions that limited in-person interactions between provi-
solutions that surfaced during the early shockwaves of the ders and customers and reduced providers’ access to customer
COVID-19 pandemic and promising research directions sug- sites. These hurdles hurt provider-customer coordination and
gested by these challenges (see Columns 2 and 3). We discuss cocreation of solutions.
these downsides and research opportunities in relation to seven Finally, the need for coordination requires that providers
characteristics of B2B customer solutions (see Column 1 of and customers put in place coordination structures, processes,
Table 1). We draw these characteristics from seminal papers and people to enable swift responses to unforeseen crises. The
that define B2B solutions (e.g., Colm, Ordanini, and Borne- COVID-19 pandemic, however, dramatically exposed the neg-
mann 2020; Macdonald, Kleinaltenkamp, and Wilson 2016; ative consequences of nonexistent or inadequate solution gov-
Tuli, Kohli, and Bharadwaj 2007; Ulaga and Reinartz 2011) ernance structures, processes, and people. New coordination
and use them to structure our subsequent discussion. activities emerged and existing ones had to evolve.
Table 1. Business-to-Business Customer Solutions in a Post-COVID-19 Economy: Potential Downsides and Emerging Research Opportunities.

Customer Solution Characteristics Downsides Illustrated During the COVID-19 Crisis Emerging Research Opportunities

(1) Integration of tangible and intangible components During the COVID-19 crisis, the interdependence of Overarching issue:
Solutions represent complex offerings composed of tangible solution components magnified consequences of supply- Enhancing flexibility of solution designs.
components (goods), intangible components (e.g. services, chain disruptions—the supply failure of a single solution Specific research questions:
intellectual property rights), or combinations thereof that are component disrupted the delivery of an entire solution.  To what extent can modular designs help reduce the
integrated to form holistic market offerings. impact of interdependencies among solution
components on solution delivery failures?
 To what extent can solution providers use platform
architectures to reduce solution delivery failures?
 How can solution providers and customers jointly build
greater agility, flexibility, and responsiveness into their
relational processes to manage the complex
interdependencies among all involved parties?

(2) Customization of solution offerings The COVID-19 crisis simultaneously shut down solution Overarching issue:
Solutions address customer-specific problems. They are designed deployment everywhere, leaving providers and customers Balancing the benefit of customization with the cost
for individual customers or groups of customers. The degree of with no alternatives. Customers were unable to quickly of nonretrievable investments by involved parties.
customization varies across industries, segments, and individual source alternatives to these customized offerings. Specific research questions:
customers. Providers were unable to swiftly redeploy offerings  What are the specific trade-offs between customization
tailored for individual customers in one area to customers and uniformity/standardization?
in other areas.  Under what conditions do the trade-offs favor greater
customization versus greater uniformity/standardization?
 What impacts do remote interaction technologies have
on “silos” among a provider’s internal units and external
partners during customization efforts?
(3) Risk transfer The COVID-19 crisis often left providers with excessive Overarching issue:
Solution contracts involve transfer of some or all outcome risk costs (e.g., idle equipment), sharply reduced revenues, or Mitigating risk of unforeseeable widespread shocks for
from customers to providers. no revenues at all (due to lockdowns in customers’ providers and customers.
countries). Specific research questions:
 What safeguarding mechanisms are more effective for
risk mitigation during a pandemic? To what extent can
best practices in one industry be transferred to other
industries? What new mechanisms may be developed to
reduce risks emanating from general shutdowns?
 To what extent can more rigorous standardization of
solution components and interfaces reduce risk by
making it easier to redeploy components or underlying
assets across different solutions?
 To what extent does third-party syndication help manage
financial risk effectively?
(continued)

403
404
Table 1. (continued)

Customer Solution Characteristics Downsides Illustrated During the COVID-19 Crisis Emerging Research Opportunities

(4) Performance evaluation and gain sharing During the COVID-19 crisis, customer needs evolved Overarching issue:
Solution customers and providers contractually agree to rapidly, leading to new expectations (e.g., cash Envisioning next-generation performance metrics, evaluation
customized key performance metrics and to gain-sharing preservation) that affected the nature and composition of processes, and gain-(loss-)sharing mechanisms to enhance
mechanisms linked to jointly defined outcomes. new solutions they wanted (e.g., inclusion of new adaptability of solution offerings to rapid changes in
productivity offerings). Solution agreements were often customer requirements.
not designed to accommodate rapid changes in customer Specific research questions:
requirements. In the crisis, gain sharing became obsolete  What type of solution performance metrics can
and key performance metrics had to be revisited or accommodate a change in solution design called for by
renegotiated. changing customer needs during a crisis?
 How can providers and customers develop processes
that enable rapid adaptation to fast-changing customer
requirements in a crisis? What are some early signals of
the need to engage in such adaptation?
 Mirroring gain sharing, is it feasible to incorporate “loss
sharing” in solution contracts? If yes, what types of goals,
metrics, and processes lend themselves to such “loss-
sharing” agreements?
(5) Goal alignment During the COVID-19 crisis, individuals and organizations at Overarching issue:
Solutions require an alignment of goals and interests among all times lost sight of joint goals and objectives. As Achieving long-term alignment among involved parties and
involved parties. Results are judged in terms of individual and organizational goals rapidly evolved, the need for swiftly navigating potential changes in goals brought about by
organizational stakeholders’ value-in-use perceptions. realigning objectives increased dramatically. The crises.
magnitude of the external shock caught many parties Specific research questions:
unprepared. Some relapsed into a self-interest mode and  Are frequent remote (versus less frequent in-person)
adopted an “us-versus-them” stance. interactions more effective in generating goal alignment?
Under what circumstances?
 What are the determinants of goal changes and
discrepancies between individual and organizational
goals? What effect does a crisis have on the magnitude of
these discrepancies?
 How do (should) providers and customers negotiate
changes in individual and organizational goals of various
parties to revise the composition, goals, and
performance metrics of a solution under development?
(continued)
Table 1. (continued)

Customer Solution Characteristics Downsides Illustrated During the COVID-19 Crisis Emerging Research Opportunities

(6) Cocreation The COVID-19 pandemic prevented in-person meetings Overarching issue:
Solutions are cocreated through the joint integration of resources and interactions (because of restricted travel and limited Deploying remote technology in solutions—from identifying
and processes of customers and providers. This process access to customer sites), which hindered cocreation new sales opportunities to automated detection of
requires ongoing interaction by all involved parties. by providers and customers. deviation from targets and postdeployment support.
Specific research questions:
 Which parts of the solution process (tasks) can be
performed effectively using remote technologies? Under
what conditions can remote technologies lead to greater
customer value creation?
 What are the long-term effects of using remote
technologies on provider-customer relationships and the
nature and scope of solution business?
 To what extent can remote technologies contribute to
greater customer involvement in solution development
and deployment? How can such customer involvement
help overcome challenges engendered by crises? How
can providers proactively help customers develop new
capabilities for such involvement?
(7) Governance structures, processes, and people The COVID-19 crisis dramatically exposed the negative Overarching issue:
Solutions require close coordination between providers and consequences of missing or insufficient solution Fostering coordination among solution providers and
customers for monitoring and managing design and governance structures, processes, and people. During the customers for better responsiveness to unforeseeable
implementation throughout all critical stages. Establishing crisis, parties realized a heightened need for managing widespread shocks.
jointly agreed upon coordination structures, processes, and relationships in a closer, more flexible, and more proactive Specific research questions:
people enables taking corrective actions in response to manner than in normal times. Providers and customers  To what extent does an external shock affect the nature
unforeseen developments. needed to intensify existing coordination efforts, put and intensity of coordination activities between solution
selected activities on hold, and/or initiate new ones. For providers and customers? Which activities must be
example, when solution-selling activities stopped due to increased, reduced, or discontinued altogether? Which
lack of demand, consulting with customers on problem- new activities must be initiated?
solving took on greater importance.  What governance structures and processes are more
effective during a pandemic? What new mechanisms may
be developed to ensure greater responsiveness?
 How does a crisis influence the composition of
providers’ sales teams, customers’ buying centers, and/or
other solution-coordination units (emergence of new
actors, shifts in the relative influence of existing versus
new players, etc.)?

405
406 Journal of Service Research 23(4)

Promising Directions for Research reassess and realign goals and objectives. Relatedly, research-
on Solutions ers may explore whether and when new modes of interactions,
such as frequent remote exchanges, are more effective in gen-
We identify seven promising research directions corresponding erating goal alignment than traditional modes such as in-person
to the seven downsides noted above (Table 1, Column 3). coordination. There is also a need to better understand the
These are not exhaustive but rather open up opportunities for determinants of discrepancies between individual and organi-
scholarly insights in light of the “lessons” of the COVID-19 zational goals. More knowledge is needed on how exactly a
pandemic. We illustrate each direction with sample research crisis affects the magnitude of these discrepancies.
questions and provide a more complete listing in Table 1. Sixth, there is a pressing need to investigate how the deploy-
The first overarching research direction refers to the very ment of remote technology in the solution process—from iden-
design of a solution. The current crisis clearly demonstrates tifying new solution sales opportunities to automated
that providers and customers must build greater agility and identification of deviations from targets and postdeployment
flexibility into solution offerings. This imperative leads to support processes—can restore and redirect cocreation pro-
many interesting research questions such as revisiting the cesses. For example, researchers could explore which parts of
nature of modular designs, leveraging platform architectures the solution process (or tasks) can be performed effectively
for solutions, and exploring new relational processes that using remote technologies and under what conditions (e.g.,
ensure greater adaptability of designs. provider, customer, industry characteristics) the use of remote
The second research direction relates to balancing the ben- technologies leads to greater customer value creation. There is
efits of customization against the costs of nonretrievable invest- also an opportunity to investigate the long-term effects of using
ments. Here, scholars might explore the specific trade-offs remote technologies on provider-customer relationships and
between customization and standardization of solution offer- the nature and scope of the solution business. It is possible that
ings and investigate the conditions under which such trade- remote technologies will deepen customers’ involvement in
offs favor one or the other. Furthermore, researchers could shed value-creating processes in the future, calling for providers to
light on how remote interaction technologies could help firms assist customers in developing such new capabilities for value
cut across organizational “silos” and reduce “silo thinking” creation (see, e.g., Elgeti, Danatzis, and Kleinaltenkamp 2020).
within as well as between provider and customer firms. The seventh research direction relates to governance struc-
Third, how might providers and customers better mitigate tures, processes, and people. Both practitioners and researchers
risk in the aftermath of an unforeseeable widespread shock? need a better understanding of how to foster coordination
Which safeguarding mechanisms are more effective for risk among providers and customers in order to gain greater flexi-
mitigation during a pandemic than others? B2B companies can bility and responsiveness in case of unforeseeable widespread
potentially learn from experience and knowledge accumulated shocks. Therefore, researchers may explore how a crisis affects
by pure service players. Likewise, one may think of approaches the nature and intensity of coordination activities between solu-
used elsewhere, such as reducing financial risk through third- tion providers and customers. Which alternative activities must
party syndication of loans, including escalator/de-escalator be initiated, and which current actions and behaviors must be
clauses that share risk when usage/throughput rises or falls increased, reduced, or discontinued altogether during a crisis?
dramatically (e.g., requiring additional payments as a crisis It is also important to understand which governance structures
evolves), and anticipating arrangements that pay for an out- and processes are effective during a pandemic and what new
come but still specify minimum levels of throughput/usage, mechanisms might be developed to ensure greater flexibility
among others. These mechanisms might help reduce risks ema- and responsiveness. Finally, one may explore how crises rede-
nating from general shutdowns and make it easier for solution fine the composition, roles, and responsibilities of involved
providers to redeploy assets across different solutions. entities such as providers’ sales teams, customers’ buying and
Fourth, the crisis reveals a need for envisioning next- usage centers, and/or other solution-coordination units. New
generation performance metrics, evaluation processes, and individuals might step in, and the roles and relative influence
gain-sharing mechanisms. Current metrics and measures of existing individuals might also evolve as a crisis unfolds.
appear unable to help involved parties adapt to rapidly chang-
ing customer requirements in a timely manner. Here, research-
ers might explore new metrics and processes that enable early Conclusion
identification of a need for change so that proactive adjust- The aforementioned downsides and research directions suggest
ments can be made. Can the parties involved use “loss- three long-term implications for solutions businesses in the
sharing metrics” that mirror more traditional gain-sharing post-COVID-19 world. First, solution businesses will not go
agreements? away; rather, they will adapt and thrive. The design and imple-
The fifth research direction is to develop a better under- mentation of solutions may look very different in the future.
standing of how customers’ (and providers’) goals evolve dur- A crisis accelerates ongoing trends and forces experimentation;
ing a crisis. During the COVID-19 crisis, these changes a pandemic is no exception. The general move toward
occurred in a very short time window, dramatically highlight- “Everything-as-a-Service” will continue to fuel growth in
ing the need to explore how parties can work together to swiftly many industries. Attempts by solution providers and customers
Bond et al. 407

to survive and thrive in the wake of COVID-19 will accelerate ORCID iDs
the adoption of digital tools, novel risk management mechan- Andreas Eggert https://orcid.org/0000-0001-7433-4714
isms, customer capability development, and resource redeploy- Michael Kleinaltenkamp https://orcid.org/0000-0002-3221-3583
ment that will shape the future of solutions. Approaches that Wolfgang Ulaga https://orcid.org/0000-0001-6413-6968
are maladaptive will fade and yield to more fit and resilient
ones.
References
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The author(s) declared no potential conflicts of interest with respect to
the research, authorship, and/or publication of this article.
Author Biographies
Funding Edward U. Bond III is a professor of Marketing and Chair of the
The author(s) received no financial support for the research, author- Marketing Department at Bradley University. His research centers on
ship, and/or publication of this article. business-to-business solutions, drivers of innovation performance in
408 Journal of Service Research 23(4)

established firms, and factors that enable effective cross-functional published in leading marketing journals like the Journal of Marketing,
working relationships. His research is guided by a core interest in how Industrial Marketing Management, Journal of Business & Industrial
individuals and organizations effectively manage cross-disciplinary Marketing, Journal of Business Research, and Marketing Theory. He
interfaces in the context of complex organizational and interorganiza- is a former editor of the Journal of Business & Industrial Marketing
tional processes. and has received an honorary doctorate of the University of Rostock,
Germany.
Ad de Jong is a professor of Marketing, Copenhagen Business
School, Frederiksberg, Denmark. His research focuses on frontline Ajay K. Kohli is Regents’ professor and Gary T. and Elizabeth R.
marketing, personal selling and sales management, and service Jones Chair, Scheller College of Business, Georgia Institute of Tech-
marketing. nology, USA. His research focuses on market orientation, sales man-
agement and customer solutions among other topics. He is a former
Andreas Eggert is a chaired professor of Marketing at the University
editor of the Journal of Marketing and has received several honors
of Paderborn, Germany. His research interests focus on strategies for
including the AMA/McGraw-Hill/Irwin award, Paul D. Converse
the creation and appropriation of value in business relationships and
award, Journal of Marketing/Sheth Foundation Award (twice), and
his work has been published in leading journals, such as Journal of
three honorary doctorates.
Marketing, Journal of the Academy of Marketing Science, Interna-
tional Journal of Research in Marketing, Journal of Service Research,
Thomas Ritter is a professor of Market Strategy and Business
Journal of Service Management, Industrial Marketing Management,
Development at Copenhagen Business School, Frederiksberg, Den-
Journal of Supply Chain Management, Journal of Business Research,
mark. His research centers on business model analysis and devel-
European Journal of Marketing, Journal of Business-to-Business
opment, data-driven growth strategies, and value creation through
Marketing, and Journal of Business and Industrial Marketing among
business relationships and networks. His research has been pub-
others.
lished in the Journal of Product Innovation Management, Indus-
Mark B. Houston (PhD – Arizona State University) is a professor of trial Marketing Management, Long Range Planning, Harvard
Marketing and Eunice and James L. West Chair in Marketing, Neeley Business Review, amongst others.
School of Business, Texas Christian University, USA. Mark is the co-
author of Entertainment Science (Springer Nature) and Editor of Jour- Wolfgang Ulaga is a senior affiliate professor of Marketing,
nal of the Academy of Marketing Science; his research has been INSEAD, France. His research focuses on value-based marketing,
recognized with the Louis Stern Award and the Sheth Foundation servitization, customer solutions, data-driven service growth strate-
Award. Mark is also a visiting International professor at Marketing gies and subscription-based business models in B2B. Wolfgang’s
Center Münster, University of Münster, Germany. work has appeared in the Journal of Marketing, Journal of the Acad-
emy of Marketing Science, Journal of Service Research, Journal of
Michael Kleinaltenkamp is a professor Emeritus of Business and Business Research, Industrial Marketing Management, Harvard Busi-
Services Marketing at the School of Business & Economics of Freie ness Review, and MIT Sloan Management Review, among others. He
Universität Berlin, Germany. His research focuses on B2B and service has received multiple awards for excellence in case writing and an
marketing as well as on marketing theory among other topics. He has honorary doctorate of Turku School of Economics, Finland.

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