Key TakeawaysThe long tail is a business strategy that allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers,instead of only selling large volumes of a reduced number of popular items.The term was first coined in 2004 by researcher Chris Anderson.More items
What is the long tail marketing strategy?
Long tail marketing is a business strategy of equalling or exceeding the market demand of a hit product by stocking, offering, and marketing many less demand volume niche products. Unlike the usual strategy of product promotion, the long tail strategy focuses more on inventory management and selling multiple less…
What is the’long tail’?
What is the ‘Long Tail’. The long tail is a strategy that allows businesses to realize significant profit out of selling low volumes of hard-to-find items to many customers instead of only selling large volumes of a reduced number of popular items.
Why do businesses extend the long tail?
By providing a greater variety of inventory (extending the long tail), businesses hope to reach more customers and generate more total sales. In this sample distribution of product sales, the many less popular items making up the “long tail” sell as many items total as the few most popular. Who implements long tail marketing?
Are long tail products increasing market share in the US?
While, in the past, blockbuster products would account for approximately 80% of the sales, recently, they have represented less than 50%, which shows that long tail products have been increasing market share.
What Is Long Tail Marketing?
In the usual retail environment, a small group of popular products dominate sales. These popular items could be a newly released gadget, movie, book, game or any recently acclaimed product. The stores focus on stocking up and promoting these popular products to earn most of the profits while other products in the inventory continue to sell in a usual pattern with no single item making a big impact.
Why Long Tail?
According to research by MIT, three kinds of demand drivers exist in the market. These are –
What are some niche oriented e-commerce stores?
Other than this, there is a rise of niche-oriented e-commerce stores like Etsy (for handmade and unique products), Redbubble (unique products from the artists), and many niche oriented Shopify stores which serve to long tail demands.
What is the long tail effect?
Welcome the long tail effect theory which states that you can earn as much or even more than the usual profits if you appeal and cater to the niche markets instead of the broad market.
How to increase customer lifetime value?
To increase the customer lifetime value by using long tail strategies like cross-selling and recommendations etc. To stand out in the market and increase sales by building a brand out of long tail products or just capitalizing on the untapped market. Also Read: Psychology That Goes Into A Successful Marketing Campaign.
What are some examples of long tail markets?
Some examples of long tail markets are (different types of) laptop chargers in the laptop niche, (different types of) mobile covers in the smartphone accessories market, and (different types of) customized gifts in the gifting niche.
Why do websites use long tail?
Websites make use of the long tail strategy to optimize themselves for the search engines. They create a large number of pages to cater to every long tail keyword search related to their niche. For example, a website operating on an affiliate marketing business model in the smartphone niche may focus on all the possible keywords related to smartphones. These can be –
What is long tail marketing?
Long tail marketing concentrates on these less popular products, developing a business sales model based upon products in the “long tail.” While many marketing strategies focus on promoting a specific product or brand, long tail marketing involves more inventory management than product promotion (See also Product Marketing). By providing a greater variety of inventory (extending the long tail), businesses hope to reach more customers and generate more total sales.
Who implements long tail marketing?
Long tail marketing is most effectively employed by online retailers (e-tailers) such as Amazon and Netflix, due to the supply-side considerations of managing such an inventory (See also E-Commerce Marketing). A brick-and-mortar video rental store or bookstore only has so much shelf space available, and must devote a significant amount of that space to stocking enough of the most popular items to meet demand. Less popular items compete with each other for limited space, and greater variety increases costs in time and energy in stocking and sorting.
How is a long tail marketing campaign developed?
Like product inventory, keywords used on search engines also have a long-tail distribution. In terms of website Search Engine Optimization, this means that a website may actually get more hits by using less popular—but more specific—keywords.
What career titles work with long tail marketing strategies?
Marketing Managers advise and make decisions regarding a company’s business model (including product, pricing, and distribution) as well as promotional activities.
How to promote a company?
What do they do? 1 advise on developing the company website, encouraging ease of access for customers 2 implement online tools to develop the long tail, such as recommendation software 3 use blogs, RSS feeds, pay-per-click advertising, and demand-side platforms to promote product offerings throughout the long tail
Why is long tail sales important?
Therefore, the most important component of developing long tail sales is to have a catalogue/search system that allows users to easily find products and get information about them.
What degree do you need to be a marketing manager?
Marketing managers typically have at least a bachelor’s degree in marketing or business management. They have several years experience managing teams, as well as a track record of success in a background like sales, purchasing, or advertising.
What Is the Long Tail?
The long tail is a business strategy that allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items. The term was first coined in 2004 by Chris Anderson, who argued that products in low demand or with low sales volume can collectively make up market share that rivals or exceeds the relatively few current bestsellers and blockbusters but only if the store or distribution channel is large enough.
Why does Anderson argue that these goods could actually increase in profitability?
Anderson argues that these goods could actually increase in profitability because consumers are navigating away from mainstream markets.
What is the long tail concept?
The long tail concept considers less popular goods that are in lower demand. Anderson argues that these goods could actually increase in profitability because consumers are navigating away from mainstream markets.
What is the head and tail graph?
The head and long tail graph depicted by Anderson in his research represents this complete buying pattern. The concept overall suggests the U.S. economy is likely to shift from one of mass-market buying to an economy of niche buying all through the 21st century.
What is Anderson’s research?
Anderson’s research shows the demand overall for these less popular goods as a comprehensive whole could rival the demand for mainstream goods. While mainstream products achieve a greater number of hits through leading distribution channels and shelf space, their initial costs are high, which drags on their profitability. In comparison, long tail goods have remained in the market over long periods of time and are still sold through off-market channels. These goods have low distribution and production costs, yet are readily available for sale.
What is the long tail of a probability distribution?
The long tail also serves as a statistical property that states a larger share of population rests within the long tail of a probability distribution as opposed to the concentrated tail that represents a high level of hits from the traditional mainstream products highly stocked by mainstream retail stores.
Who is Chris Anderson?
Understanding the Long Tail Strategy. Chris Anderson is a British-American writer and editor most notably known for his work at Wired Magazine. In 2004, Anderson coined the phrase "long tail" after writing about the concept in Wired Magazine where he was editor-in-chief. In 2006, Anderson also wrote a book titled “The Long Tail: Why the Future …
Who uses long tail?
The case studies brought up earlier – of a large online retailer and a brick-and-mortar video rental business – are two real examples of businesses that use (and don’t use) long tail marketing. The first can be seen in the example of Amazon, which uses its Amazon Prime service to offer on-demand video streaming. Amazon doesn’t need to worry about its products competing for space, and thus it can offer a large, almost unlimited selection; all it has to do is have these movies available digitally. This extends to Amazon’s entire business model; since it keeps its products in warehouses and not storefronts, it has nothing to lose by offering everything that it does physically in the virtual space as well.
Is Head or Long Tail best for me?
Brick-and-mortar stores usually can’t afford to employ long tail marketing, unless they have long tail competitors (which is what happened in the case of Blockbuster). They also physically do not have the space to store every oddball movie selection under the sun that someone might come looking for one day.
What are the benefits?
The main benefit of long tail marketing is simply attracting greater customers with more diverse interests. Although certain items may be very popular, by offering a greater variety, you will be able to attract a significant portion of the market that previously was unavailable to your business.
How can you incorporate it into your business?
Creating a long tail strategy involves several steps, starting with product and pricing and moving onto promotion and customer support. To start; evaluate your business strategy and your current sales model.
What is a large online retailer?
A large online retailer, with essentially unlimited “storage” space and promotion through search engine optimization, offers virtually every movie that has ever been released, as well as new releases. This company makes just as many sales from its “niche” items as from its more popular ones, because customers can find almost anything they are looking for, and together, all of these small “niche” sales provide an equal or greater amount of revenue than the few, more well-known products.
What is a rental video store?
A video rental shop, with a physical store presence and a reliable customer base, caters to the popular demands of its customers. It has limited space for storage, and thus does not keep many lesser well-known videos in stock. Instead, it makes the majority of its sales from new releases and popular films, and makes clear use of its store space and marketing strategy to promote these videos. As a result, the store’s inventory has very little variety, and it makes very little sales from customers with specific or more unique interests.
Why is it important to have a wide selection of movies?
The benefit of offering a wide selection of specialized items is that you only have to worry about competitive pricing for the products that are in higher demand. When you and 20 other video stores are all selling new releases, the pricing of those new releases is crucial if you want to compete. However, by offering less well-known movies, you will have an advantage over competitors who don’t offer this; therefore, you don’t have to consider competitive pricing as much. Also, you can even increase your pricing on specialty items to help offset the competitive prices on your more popular products.
What is long tail profitability?
The long tail profitability is strictly related to the reduced marketing and distribution costs, as well as to the fact that there is a large share of the population who looks for niche items, opposing to the one looking for mainstream goods. Take a look at the typical long tail features:
How does the long tail business model work?
The Long Tail Business Model works by selling a wide variety of niche products, which individually sell very little, but which in total generate high sales volume. Nowadays, search engines have made it possible for to consumers find anything they want all over the world, no matter how specific their interests and tastes are.
What is a long tail business?
The long tail business model does the opposite. It focuses on selling large numbers of unique items, niche products. These businesses don’t have a superstar bestselling product. They have several hard-to-find items, for different niche consumers.
Why is the long tail business model beneficial?
Long tail business model has provided a real shift in the economy.
What is data intelligence?
Data intelligence. Based on deep customer intelligence, engines collect data to reinforce recommendations and product development. The recommendation engines can offer niche undiscovered products, which fit the customer preferences, instead of offering all the people the same hit items.
How is long tail economics facilitated?
This long tail economy is facilitated through the internet, as mentioned above, where both customers and businesses can find each other, no matter where they physically are.
What is a long tail?
What is the Long Tail? To make it possible to understand the concept of long-tail more clearly, let’s look at the common retail model. In general, businesses focus on marketing and selling a reduced number of profitable popular items. So, they make money by selling large volumes of a few items.
Why does Netflix recommend everything?
Netflix has a recommendation for everything, largely because of how intelligently they catalog their collection and utilize AI to learn user behavior. Consequently, even the least popular titles on Netflix may crop up in your searches when the stars align.
What was the first niche marketing success story?
One of the first niche marketing success stories was Pepsi Cola’s historic efforts to reach the African-American community in the late 1940s; it helped establish the company as the No. 1 rival to Coca-Cola.
How do search engines work?
Search engines are always collecting data on user preferences and the keywords that we use. By tapping into this reservoir of information, businesses can tailor their systems to serve up relevant search results when long-tail keywords are searched for. Bigger organizations can invest in their own recommendation systems.
What is the success of a long-tail e-commerce business?
A significant portion of the success of a long-tail e-commerce model rests on the availability of niche products. If a product is not in stock when a customer orders it, it not only amounts to a loss of sales but also a loss of brand trust . A top-notch inventory management system ensures that even the longest of long-tail items can be shipped at a moment’s notice.
What can big organizations invest in?
Bigger organizations can invest in their own recommendation systems. Using state-of-the-art AI tools, these systems can intelligently learn customer behavior and tailor product recommendations to niche audiences based on their past purchase records and general preferences.
What is Amazon recommends based on?
These are items Amazon recommends based on your purchase, often including dozens of products you can scroll through.
What is media fragmentation?
What do we mean by "media fragmentation"? It basically means that smaller audiences are consuming broad-market media and that more and more consumers are receiving their information from niche sources. This would suggest that advertisers are better off investing in long-tail advertising, across many websites rather than a few, and that public relations firms must focus on media relations strategies that go well beyond Forbes and "Good Morning, America."
What is a Long Tail Item?
An actual long tail item really does depend on the industry, and might not always be something you immediately recognise when faced with it. The product in question could be a pair of shoes, or an unbranded coat with the faux-fur lined hood.
Why is Amazon so popular?
Because Amazon can provide niche products, it can appeal to many different customers with diverse interests. Many other businesses, particularly those involved in online retail, may be able to profit from a similar strategy.
How to maximize search engine optimization?
The most effective way to maximize search engine optimization and bring in more website traffic using the long tail theory is to create a large number of pages that appeal to niche markets.
What are some examples of long tail media?
As another one of long tail media examples, popular online companies such as iTunes and Netflix generate a lot of revenue from selling small numbers of many different, less popular items that appeal to a wide range of customer preferences.
Why is it possible to buy individualised niche products?
This is possible because, in an increasingly globalised economy, production costs are lower, making it easier to produce items in smaller groups. This only works if the store or distribution channel is substantial enough.
What is a long tail distribution?
The long tail is a statistical pattern of distribution that occurs when a larger share of occurrences occur farther away from the centre or head of distribution. This means that a long tail distribution includes many values that are far away from the mean value. In an economic context, this signifies that more products are purchased …
How can businesses benefit from this trend?
Businesses can benefit from this trend by stocking a variety of individualized, niche items. Given enough traffic, products that have a low sales volume can collectively make up a market equal to or larger than that of the most popular, best-selling items.
Who Should Use Long Tail Marketing Strategy?
It is said that the long tail marketing is very much designed for online stores such as Amazon and Netflix. When it is a physical store, the high in demand items are displayed at a huge space of the shelves. The other items that are not in much demand cover up the leftover space.
Why is the use of long tail keywords a great idea?
Why is the use of the long tail keywords a great idea? This is great because they might target a low number of audiences but this crowd will be very much specific and highly relevant to the products. Hence, though the exposure will be limited the conversion will be much higher.
How many words are long tail keywords?
This kind of marketing revolves around Long Tail Keywords that are actually 3 to 5+ words phrases that are highly relevant to your products or services. This can be very productive in today’s time when customers prefer using very specific search phrases.
Why is Long Tail Marketing so successful?
It is again a very successful brand that has incorporated Long Tail Marketing to generate more traffic and customers. They created effective landing pages by using relevant long tail keywords. They are popular for creating the best performing and highly shareable content in their niche.
What is the first thing to focus on?
The very first thing to focus on is the SEO of your site. This can be taken care of by the right keywords. If you are promoting many products at the same time, it is important for you to make use of many keywords for the SEO purpose. Also, make sure that you make use of the long tail keywords for the purpose.
What is a good idea to get involved in long tail marketing?
In order to get a proper long tail marketing done, it is also a great idea to get involved in strategies such as link building.
What is the benefit of long term marketing?
The key benefit of Long Term Marketing is actually incorporated in its power of targeting the customer in the more competent and customized manner.