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The Long Tail

The Long Tail.

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The Long Tail

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  1. The Long Tail …first coined by Chris Anderson in an October 2004 Wired magazine article to describe certain business and economic models such as Amazon, Rhapsody or Netflix where certain products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough…

  2. Dimensions of the Long Tail Marketplace Shape of distribution is common: wealth, other rankings

  3. How Are Customers in the Long Tail Served ? What limits physical retailers from competing in the Long Tail ?

  4. Number of CD Titles in The Long Tail:Wal-Mart vs. Rhapsody

  5. General Implications When the Market is served by ‘Physical’ Retailers • Tyranny of Lowest Common Denominator Fare: inefficient distribution systems result in blockbusters and “manufactured pop” being pushed at consumers …our tastes are not as mainstream as we think… …minority interests or tastes may not be served… • Tyranny of Physical Space: demand may be spread too thin - brick and mortar stores can only carry inventory that generates sufficient sales and profits to pay for its keep …a market spread too thinly is no market at all… Examples ?

  6. Touching the Void Phenomenon 20,000 ft. peak of Siula Grande in the Peruvian Andes Climbers: Simon Yates and Joe Simpson Simpson falls on decent; broken leg Yates repeatedly lowers Simpson, then cuts rope Five days later, Simpson crawls into camp

  7. Touching the Void Phenomenon The modestly successful Touching the Void novel by Joe Simpson gains new sales following Jon Krakauer’s Into Thin Air tale of climbing Mt. Everest. How could this happen ? …by combining infinite shelf space with real-time information about buying trends and public opinion… Web sites that offer ‘real time’ information, public opinion or recommendation systems ?

  8. Strategy to Take Advantage of the Long Tail • Rule #1: Make everything available • Rule #2: Cut the price in half. Now lower it. • Rule #3: Help the customer find what’s he’s looking for

  9. Profit Implications of Following a The Long Tail Strategy

  10. The MP3.com model – local bands pay a fee to have their music promoted – failed. Is the Long Tail Just a Collection of Lower-quality Products?

  11. Is the Long Tail limited to the entertainment industry ?Where Else Can We Find the Long Tail at Work ?

  12. Where Else Can We Find the Long Tail at Work ?

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