1 May 2024

Mastering Competitive Intelligence in the Digital Age: A Comprehensive Guide for E-Commerce and Digital Marketers

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Introduction to Competitive Intelligence

Competitive Intelligence (CI) is the art of understanding and anticipating the competitive landscape to make informed business decisions. With the digital transformation, CI has evolved from manual research to sophisticated analytical tools, providing real-time insights that are crucial for e-commerce and digital marketing strategies. This guide explores the intricacies of CI and demonstrates how to effectively harness its power to enhance your business operations.

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The Rise of Competitive Intelligence

In today's rapidly evolving business environment, competitive intelligence (CI) has become an indispensable tool for companies looking to maintain a strategic advantage. A study by Grand View Research underscores this trend, projecting the digital intelligence platform market to reach USD 56.7 billion by 2030. This significant growth highlights the escalating importance of data-driven insights in shaping business strategies and decision-making processes.

CI not only equips businesses with the knowledge of current market dynamics but also provides predictive insights that help anticipate future trends. This capability is crucial for companies aiming to stay ahead of industry shifts and competitor moves. By leveraging real-time data analysis, businesses can make well-informed decisions that drive growth and innovation.

Definition and Importance

Competitive Intelligence (CI) is a crucial process that encompasses the systematic gathering, analyzing, and utilizing of information concerning competitors, market trends, and the overall business environment. This strategic tool is indispensable for navigating the complex landscape of modern business, especially in dynamic sectors such as e-commerce and digital marketing.

For businesses operating in these high-velocity environments, the deployment of effective CI is not just beneficial but essential for several reasons:

  • Strategic Planning: CI provides a solid foundation for strategic planning by offering insights into competitors' strategies, market movements, and potential threats or opportunities. This information is critical for crafting strategies that are not only reactive but also proactive.
  • Market Adaptability: In the fast-paced e-commerce world, consumer preferences and market trends can shift rapidly. CI helps businesses stay adaptable by providing real-time data that can influence decision-making processes, from marketing strategies to product development.
  • Risk Management: By keeping an eye on the competitive landscape, CI helps businesses anticipate and mitigate risks more effectively. Understanding what competitors are doing allows companies to adjust their own strategies in a way that minimizes risks and leverages opportunities.
  • Customer Retention and Satisfaction: CI tools aid in understanding what drives customer loyalty and satisfaction, which can lead to better customer retention rates. By analyzing competitors' customer service approaches and product offerings, businesses can fine-tune their own practices to better meet customer expectations.
  • Innovation Trigger: Regular analysis of the competitive environment can spark innovation by highlighting gaps in the market that a business can fill. By understanding the strengths and weaknesses of competitors, a company can identify areas for innovation within their own product lines and services.

Evolution of Competitive Intelligence in the Digital Era

The landscape of competitive intelligence (CI) has undergone a profound transformation with the advent of big data and advanced analytics. This evolution marks a shift from traditional methods of data collection, such as manual research and direct competitor observations, to more sophisticated, technology-driven approaches that allow businesses to harness a broader spectrum of information.

From Manual to Machine-Driven: A Paradigm Shift

Historically, CI relied heavily on manually gathered data from public domains or proprietary sources, which often resulted in a time-consuming process with limited scope and potential for human error. However, the digital era has introduced a new paradigm:

  1. Big Data Accessibility: Businesses now have unprecedented access to vast amounts of data. This includes structured data from traditional databases and unstructured data from sources like social media, online forums, and other digital channels.
  2. Advanced Analytics: Modern analytics tools can process this extensive data to identify patterns, trends, and actionable insights at a speed and accuracy that were unimaginable in the past. Techniques such as predictive analytics, machine learning, and AI have become integral to deciphering complex datasets.
  3. Real-Time Insights: The capability to analyze data in real time has transformed CI into a dynamic tool that supports immediate decision-making and rapid response strategies. This is particularly crucial in industries where conditions change swiftly, such as technology and consumer goods.
  4. Integration of Diverse Data Sources: CI tools now integrate data from a wide range of sources, including IoT devices, customer interaction points, and even competitor websites. This integration provides a more holistic view of the competitive landscape.
  5. Accessibility and Democratization of Information: Advanced CI tools have become more user-friendly and accessible to businesses of all sizes. This democratization means that even startups and small businesses can implement effective CI strategies that were once the purview of only large corporations with significant resources.

Implications for Businesses

The evolution of CI in the digital age means that businesses can be more proactive rather than reactive. With the ability to access and analyze vast amounts of data quickly, companies can anticipate market shifts, adapt to changes in consumer behavior, and respond to competitor moves with greater agility. This capability not only enhances strategic planning but also provides a competitive edge in rapidly changing markets.

Furthermore, the integration of AI and machine learning has not only improved the efficiency of competitive intelligence processes but has also enhanced the accuracy of the insights derived. This technological advancement allows companies to make more informed decisions, reducing guesswork and enhancing strategic outcomes.

Looking Forward

As we advance, the scope of competitive intelligence will continue to expand, incorporating more advanced technologies such as blockchain for enhanced data security and augmented reality for immersive data visualization. These developments will further empower businesses to harness the power of CI, making it an indispensable element of their strategic arsenal.

In summary, the evolution of competitive intelligence in the digital era has transformed it from a static, retrospective tool into a dynamic, forward-looking solution that drives business success in the modern marketplace.

Foundations of Competitive Intelligence for E-Commerce

To navigate the competitive landscape of e-commerce successfully, businesses must implement competitive intelligence (CI) effectively. This requires a deep understanding of CI's core elements and how to tailor these to the unique dynamics of the e-commerce sector.

Key Concepts and Frameworks

At the heart of CI are several pivotal activities and analytical frameworks that help businesses strategize more effectively:

  1. Identifying Competitors: The first step in CI is to identify your direct and indirect competitors. This includes not just the obvious rivals but also new entrants and substitute products that could divert your customer base.
  2. Data Collection: Gathering data is crucial and involves compiling information from various sources such as competitor websites, customer reviews, market reports, and social media platforms.
  3. Data Analysis: This involves turning the raw data into insights. Techniques used include trend analysis, benchmarking, and predictive modeling, which help understand competitors' behaviors, market trends, and potential future movements.
  4. Strategic Decision Making: The final step is to use these insights to make informed strategic decisions. This could involve altering marketing strategies, adjusting pricing, enhancing customer service, or innovating new products.

Frameworks to Support CI Processes:

  • SWOT Analysis: Helps businesses understand their internal Strengths and Weaknesses, and external Opportunities and Threats.
  • Porter’s Five Forces: Provides insights into the competitive intensity and attractiveness of an industry which is crucial for determining strategy.
  • PESTLE Analysis: Offers a macro-environmental understanding from Political, Economic, Social, Technological, Legal, and Environmental perspectives.

These frameworks provide structured methods to analyze the information collected and help draw meaningful conclusions that can guide strategic planning.

Technologies Powering Competitive Intelligence

The adoption of advanced technologies has significantly boosted the capabilities of CI in e-commerce:

  • SEO and Market Analysis Tools: Tools like SEMrush, Ahrefs, and Moz are invaluable for gaining insights into competitors' SEO strategies, backlinks, and content marketing efforts. They allow businesses to benchmark their web presence against competitors and identify areas for SEO improvement.
  • AI-driven CI Platforms: Platforms like DataDripper are transforming CI by automating the collection and analysis of competitive data. With capabilities for real-time tracking of competitive dynamics, these platforms simplify the process of gathering competitor information and enable quicker strategic adjustments. DataDripper, for instance, enhances strategic decision-making by providing timely insights that are crucial for maintaining a competitive edge in the fast-paced e-commerce sector.

Integration of CI Tools: Incorporating these technologies into daily business operations can provide continuous intelligence about market conditions and competitor strategies. This ongoing insight is vital for e-commerce platforms where market conditions can change rapidly due to new product launches, changes in consumer preferences, or shifts in pricing strategies.

Implementation Tips

  • Continuous Monitoring: Since the e-commerce landscape changes swiftly, continuous monitoring of the competitive environment is crucial. Tools that offer real-time data and alerts about competitor activities can provide an edge.
  • Cross-functional Collaboration: Effective CI requires collaboration across various departments within an organization, from marketing to sales to product development, ensuring that insights are effectively translated into action.
  • Adapt and Evolve: As new technologies emerge and the digital landscape evolves, so too should your CI practices. Stay abreast of advancements in analytical tools and techniques to keep your CI process at the cutting edge.

By grounding your competitive intelligence activities in robust frameworks and leveraging the latest technologies, you can significantly enhance your strategic positioning within the e-commerce industry. This foundation not only supports better decision-making but also empowers your business to act proactively rather than reactively, staying one step ahead in the competitive race.

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Impact of Competitive Intelligence on Decision-Making

Competitive intelligence (CI) has a profound impact on business strategy and decision-making, with tangible benefits that can directly enhance a company's performance. According to research by the American Marketing Association (AMA), businesses that effectively leverage CI techniques report significant improvements—a 25% increase in win rates and a 10% improvement in profit margins. These statistics underscore the critical role that CI plays in optimizing various aspects of business operations.

Enhancing Business Strategies through CI

The implementation of competitive intelligence impacts decision-making in several key areas:

Strategic Marketing Decisions: By understanding competitors’ strategies and market trends, businesses can tailor their marketing efforts to better target desired customer segments, adjust pricing strategies, and optimize promotional activities. This strategic alignment often results in increased market share and improved customer acquisition rates.

Product Development and Innovation: CI provides insights into market needs and competitor product offerings. This information is crucial for businesses to innovate and improve their products, ensuring they meet or exceed market standards and consumer expectations. The ability to stay ahead in product development can significantly influence a company's competitive edge and market positioning.

Operational Efficiency: Through CI, businesses gain knowledge of competitors’ operational strategies, including supply chain management, manufacturing processes, and logistics. This insight allows companies to identify best practices and areas for operational improvement, leading to cost reductions and enhanced efficiency.

Risk Management: CI helps businesses anticipate and respond to industry changes and potential risks by providing a clearer understanding of the external environment. This proactive approach to risk management can prevent costly mistakes and ensure more stable business performance.

Investment Decisions: With detailed insights about the competitive landscape and future market trends, businesses can make more informed decisions about where to allocate resources and invest in growth opportunities. This strategic investment based on CI can lead to higher returns and more sustainable business development.

Strategic Implementation of Competitive Intelligence

Implementing competitive intelligence (CI) effectively goes beyond the mere collection of data. It encompasses a systematic integration of this intelligence into business operations, enabling organizations to make informed, proactive decisions. Here’s how businesses can strategically implement CI to maximize its benefits:

Steps to Develop a Competitive Intelligence Strategy

  1. Define Your Intelligence Needs: Start by defining what you need to know based on your strategic objectives. This involves understanding what information will most impact your business goals, whether it's insights about competitors, market trends, customer behaviors, or industry innovations.
  2. Identify Key Intelligence Topics (KITs) and Key Intelligence Questions (KIQs): Determine the specific topics and questions that will guide your intelligence gathering. KITs could include competitor product launches, market entry strategies, or customer service enhancements. KIQs help focus your research efforts on extracting specific answers from the data you collect.
  3. Select Appropriate Tools and Sources for Data Collection: Choose the right tools and data sources that align with the types of intelligence you need. This might involve digital tools like SEMrush for SEO data, Ahrefs for backlink analysis, or DataDripper for real-time market and competitor insights. Also, consider primary sources like customer feedback, industry reports, and competitive benchmarks.
  4. Analyze the Collected Data to Uncover Actionable Insights: Use analytical methods to sift through the data and extract insights that are directly applicable to your strategic queries. This step often requires sophisticated analysis tools that can handle large datasets and complex variables, transforming raw data into valuable strategic insights.
  5. Communicate These Insights Effectively Across Your Organization: The final step is to ensure that the insights gained are communicated effectively across different departments within your organization. This could involve regular intelligence briefings, dashboards, or integrated reports that inform decision-making at all levels.

Integrating Competitive Intelligence in Business Processes

For CI to be truly effective, it must be an integral part of the daily business processes. Here’s how CI can be seamlessly integrated:

  1. Strategic Planning: Embed CI into the strategic planning process to ensure that all decisions are based on the most current and comprehensive market insights. This helps in aligning business strategies with actual market conditions.
  2. Marketing and Sales: Utilize CI to tailor marketing and sales strategies based on competitor actions and market trends. This could involve adjusting marketing campaigns in real-time, repositioning products, or changing pricing strategies to stay competitive.
  3. Product Development: Inform the product development process with insights gained from CI, ensuring that new products or features directly address evolving customer needs and preferences identified through competitive analysis.
  4. Customer Relationship Management: Use CI to enhance customer relationships by understanding and anticipating customer needs better, based on trends observed in the competitive landscape.
  5. Continuous Feedback Loop: Create a feedback loop where insights from CI lead to actions, and the outcomes of those actions further inform future intelligence activities. This iterative process helps businesses stay agile and responsive to changes in the competitive environment.

By following these steps and integrating CI into core business processes, organizations can transform competitive intelligence into a dynamic tool that not only supports reactive adjustments but also drives proactive strategy development. This strategic approach not only enhances immediate competitive positioning but also builds a foundation for sustained long-term success in the ever-evolving market landscape.

Tools and Technologies in Competitive Intelligence

A variety of tools cater specifically to the needs of e-commerce businesses and digital marketers, enhancing their CI capabilities.

Overview of Leading Competitive Intelligence Tools

Tools like SpyFu, SimilarWeb, and BuzzSumo help businesses understand their competitors’ SEO strategies, web traffic, and content effectiveness. Each tool offers unique features that can be leveraged for specific CI objectives, enhancing strategic decision-making.

Comparative Analysis of Tools

Choosing the right CI tool involves evaluating data accuracy, update frequency, user interface, and cost-effectiveness. It’s important to select tools that align well with your business size and sector, ensuring effective CI implementation.

Custom Solutions for E-commerce and Digital Marketing

For specific needs, custom CI solutions can be developed. These might include bespoke analytics platforms or specialized monitoring tools tailored to niche markets or particular aspects of digital marketing.

Practical Applications of Competitive Intelligence

Competitive Intelligence (CI) is an invaluable tool for e-commerce businesses, enabling them to stay ahead in a highly competitive online marketplace. By effectively leveraging CI, businesses can gain deep insights into competitor activities, consumer behavior, and market dynamics, which are essential for maintaining a competitive edge.

Tracking Competitor Pricing Strategies and Promotional Tactics

One of the primary applications of CI in e-commerce is the monitoring of competitors’ pricing strategies and promotional tactics. This involves:

  • Dynamic Pricing: Tools that track price changes in real-time can help businesses adjust their pricing strategies on the fly, ensuring they remain competitive without sacrificing profit margins.
  • Promotion Analysis: CI tools analyze the timing, extent, and impact of competitors' sales promotions, enabling businesses to plan their promotions strategically to maximize customer acquisition and retention.

By understanding how competitors price their products and run promotions, e-commerce businesses can craft strategies that attract price-sensitive customers and increase market share.

Case Studies from E-Commerce Giants

  • Amazon: Known for its cutting-edge CI capabilities, Amazon utilizes complex algorithms to adjust prices dynamically across millions of products. By analyzing competitor prices and market demand, Amazon ensures optimal pricing that maximizes both sales volume and profit margins.
  • Alibaba: Alibaba leverages CI not just for pricing but also to understand market trends and consumer preferences across different regions. This intelligence is used to tailor product offerings and expand into new markets strategically.

These case studies demonstrate the power of CI in enabling e-commerce giants to maintain market leadership through informed strategic decisions.

Leveraging Data for Market Analysis

CI plays a crucial role in understanding market demands and consumer behavior, which are critical for:

  • Targeted Marketing: By analyzing consumer trends and preferences, businesses can create more effective marketing campaigns that speak directly to the needs and desires of their target audience.
  • Product Development: Insights into prevailing market trends and emerging consumer needs guide the development of new products or the enhancement of existing ones, ensuring they meet the evolving expectations of customers.

This strategic use of data ensures that businesses remain relevant and competitive in a fast-changing market.

Real-Time Tracking and Analysis

Real-time CI tools are essential for e-commerce businesses to:

  • Monitor Market Movements: These tools provide immediate insights into any shifts in the competitive landscape, such as a competitor launching a new product or a significant change in pricing strategies.
  • Respond Quickly to Competitor Moves: With real-time data, businesses can implement immediate countermeasures to competitor actions, such as adjusting their own pricing, running a promotion, or enhancing customer service.

The ability to track and analyze competitor movements in real time allows businesses to be agile, responsive, and proactive in their strategic decisions.

Competitive Intelligence for Specific Industries

Competitive Intelligence (CI) is not a one-size-fits-all strategy; its implementation can vary significantly across different industries, each with its own unique set of challenges and opportunities. Tailoring CI approaches to specific industry needs not only enhances effectiveness but also ensures businesses can leverage unique insights to gain a competitive edge.

Fashion and Beauty Brands

The fashion and beauty industries are characterized by rapid trend cycles and high consumer expectations for novelty and personalization. CI plays a crucial role in these sectors by:

  • Trend Monitoring: CI tools track emerging trends in real-time, analyzing everything from runway shows to social media influencers. This allows brands to quickly adapt their product lines and marketing strategies to capture evolving consumer interests.
  • Competitor Product Launches: By monitoring competitor launches, fashion and beauty brands can benchmark their offerings against those of their rivals, identify gaps in their own product lines, and strategically plan their launches to maximize market impact.
  • Consumer Feedback Analysis: Real-time analysis of consumer feedback helps brands adjust their marketing strategies and product formulations to better meet customer expectations, thereby enhancing brand loyalty and customer satisfaction.

Retail Sector

For the retail sector, CI is indispensable, especially during peak sales periods like Black Friday, Cyber Monday, and back-to-school seasons. Effective CI enables retailers to:

  • Inventory Management: CI tools provide insights into competitor inventory levels and sales strategies, helping retailers optimize their stock levels to avoid overstocking or stockouts.
  • Pricing Strategies: By monitoring competitor pricing in real-time, retailers can adjust their pricing strategies dynamically to stay competitive while protecting profit margins.
  • Promotional Activities: Analysis of competitors' promotional tactics allows retailers to design more effective marketing campaigns that attract more customers and generate higher sales.

Other Key Sectors

In sectors like technology, healthcare, and finance, CI is tailored to meet specific industry demands:

  • Technology Sector: CI focuses on tracking technological advancements, patent filings, and market entries of new tech products. This is crucial for technology companies to stay ahead of rapid innovation cycles and disruptive technologies.
  • Healthcare Sector: In healthcare, CI helps companies monitor regulatory changes, new drug approvals, and shifts in healthcare policies. Understanding these factors is vital for navigating the complex regulatory environments and for strategic planning.
  • Finance Sector: Financial institutions use CI to keep abreast of economic trends, regulatory changes, and fintech innovations. This intelligence is critical for risk management, investment strategy formulation, and maintaining compliance in a tightly regulated industry.

Keyword Research and User Intent

Keyword research stands as a cornerstone of both Search Engine Optimization (SEO) and Competitive Intelligence (CI), providing critical insights into consumer behavior and market trends. This process not only reveals what terms consumers are searching for but also uncovers the intentions behind their searches.

Importance in SEO and Competitive Intelligence

Effective keyword research is essential for optimizing online content to achieve higher visibility in search engine results. By understanding and targeting the keywords that are most relevant to their audience, businesses can significantly enhance their online presence, attract more targeted traffic, and ultimately capture a larger share of the market. In the context of competitive intelligence, keyword research offers an analytical view of market dynamics, highlighting consumer needs and the strategies employed by competitors.

Techniques for Effective Keyword Research

  1. Utilizing SEO Tools: Tools like Google Keyword Planner and KWFinder are instrumental in identifying high-volume keywords that are relevant to your business. These tools provide data on search volume, competition level, and trends, which help in prioritizing the keywords that offer the best ROI.
  2. Analyzing Search Intent: Understanding the intent behind searches is crucial. Typically, search queries can be categorized into three types:By classifying the keywords according to these intentions, businesses can tailor their content strategies to meet the specific needs of their audience, whether that’s providing information, facilitating purchases, or guiding them to a particular part of their site.
  • Transactional Queries: Indicate the intent to complete a purchase or engage in another form of conversion.
  • Informational Queries: Seek answers or information, such as tutorials, guides, or specific data.
  • Navigational Queries: Involve searching for a specific website or page.

Tools for Identifying User Intent

To effectively tailor content to meet user needs, several tools can analyze the questions and concerns of potential customers:

  • AnswerThePublic: This tool visualizes search questions and suggested autocomplete searches in an image called a search cloud. Categories include the 'whos', 'whats', 'whens', and 'hows' of user queries, which can help content creators address specific user concerns.
  • AlsoAsked: It goes deeper into understanding how people search around a topic, showing the other questions they ask following their initial query. This can help expand content to cover associated topics of interest to your target audience.

Implementing Insights into Content Strategies

With the insights gained from keyword research and user intent analysis, businesses can develop more focused content that speaks directly to the interests and needs of their audience. Here are a few practical applications:

  • Content Customization: Tailor content to address the specific questions and needs identified through keyword intent analysis. For example, if keyword research shows a high volume of informational queries related to a product, developing comprehensive guides or FAQ sections can meet this need.
  • SEO Optimization: Integrate high-value keywords naturally into titles, headers, meta descriptions, and the body of your content to improve its visibility and ranking in search engine results.
  • Audience Engagement: By aligning content with the identified user intents, businesses can enhance engagement, reduce bounce rates, and encourage users to spend more time on their website.

Mastering Competitive Analysis Automation

Automating competitive analysis can save time and resources while providing consistent data for making informed decisions.

Benefits of Automation in Competitive Analysis

Automation allows for the continuous monitoring of competitors and the market, providing timely updates that are crucial for maintaining a competitive edge.

Implementing Automated Tools

When implementing automated tools, it's important to ensure they integrate seamlessly with other business systems and that they provide reliable and actionable data.

Challenges and Solutions

Some challenges include data overload, the need for customization, and the potential for errors in automated systems. Addressing these challenges involves setting clear objectives, choosing adaptable tools, and regularly reviewing and adjusting the systems based on performance.

Advanced Techniques in Competitive Intelligence

To stay ahead, businesses must adopt advanced techniques in CI, including predictive analytics and machine learning.

Predictive Analytics and Its Role

Predictive analytics can forecast future market trends and consumer behaviors by analyzing historical data, which is invaluable for strategic planning.

Machine Learning Models

Machine learning models refine the analysis of big data, identifying patterns and insights that human analysts might miss. These models improve over time, offering increasingly sophisticated insights.

Advanced Data Visualization Techniques

Data visualization tools such as Tableau and Microsoft Power BI help present competitive intelligence in an understandable and actionable format, making it easier to share insights across the organization.

Developing a Competitive Intelligence Culture

For CI to be effective, it must be embedded within the organization’s culture.

Training and Development

Regular training sessions should be provided to employees to keep them updated on the latest CI tools and techniques. This empowers them to contribute effectively to the organization's CI efforts.

Organizational Change Management

Implementing CI requires changes at various levels of an organization. Effective change management practices are necessary to ensure these changes are accepted and adopted across the board.

Building a Data-Driven Culture

Creating a culture that values data-driven decision-making is crucial. This involves not just providing tools and technologies, but also fostering an environment where data is openly shared and used for making decisions.

Future Trends in Competitive Intelligence

The future of CI will be shaped by advancements in technology and changes in market dynamics.

Emerging Technologies

Technologies like blockchain and augmented reality are set to revolutionize how competitive intelligence is gathered and utilized, offering more secure and immersive ways to analyze data.

The Future of AI in Competitive Intelligence

AI will continue to play a pivotal role in CI, with more sophisticated algorithms that can predict competitor moves and consumer trends with high accuracy.

Strategic Forecasting and Planning

As markets become more volatile, the ability to forecast and plan strategically using CI will become more crucial. Businesses will rely on CI not just to keep up with competitors, but to anticipate changes in the market landscape.

Mastering Competitive Intelligence in the Digital Age

Conclusion

Mastering competitive intelligence is a crucial capability for businesses operating in the digital age, especially for those in dynamic sectors like e-commerce and digital marketing. By effectively implementing the concepts, tools, and strategies discussed in this guide, businesses can enhance their ability to anticipate market changes, understand competitor strategies, and make informed strategic decisions.

Don’t let your competitors get ahead. Join the DataDripper beta waitlist today and start mastering the art of competitive intelligence with our innovative, AI-driven platform. Gain early access to our tools and start transforming information into strategic power. Make informed decisions faster and with greater confidence. Register here.

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