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What is the purpose of Source type in Sales and Marketing

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Please can someone give me insight into what the purpose is of the Sales management > Source type in Sales and Marketing.

I can see that you can set this on Leads and Opportunities, and can infer that this describes where a lead or opportunity originated from, but is this then used later as a filter on specific reports?

What are the Source type option on the same form? What would be an example of an 'Option' on a Source type?

I have searched for more information on this form but I haven't been successful in finding anything.


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