Long Tail

Topics: Marketing, Long Tail, Erik Brynjolfsson Pages: 14 (4731 words) Published: July 31, 2010

Project #4: Literature Search
“The Long Tail”


R. Cros

Table of contents

I. Background

II. Thesis 1 and 2

III. Thesis Findings
A. Thesis One – Consumer-Driven
B. Thesis Two – Higher Consumer Engagement

IV. Thesis Objections

V. Unanswered Questions

VI. Bibliography

VII. Abstracts (compiled)

I. Background
As a part of the MBA curriculum, a class titled Management Information Systems was given at Roosevelt in the fall of 2009. The class dealt a great deal with how information, innovation and technology were fundamentally changing business in America. The course focused primarily on the importance of gathering data and converting it into information (for use by managerial decision makers) and on the myriad uses of internet technologies in modern business, from the supplier intinamcy to the management of the collective knowledge of employees. During the course, the professor presented students with an interesting article titled “The Long Tail” written by Chris Anderson of Wired magazine. The Long Tail, as presented, was a fascinating concept, in the context of discussions of core business functions like the value chain, consumer-driven decision making and the use of technology in marketing. As presented by Anderson, the modern internet, with its ubiquity, super-fast times and access to an unlimited cacophany of products and services, was not just another way to market products; a new-fangled television or another “space” in which a firm must have a presence. To the contrary, per Anderson, the internet was changing marketing, branding and consumer behavior completely, at elemental levels. The theory stated that bricks and mortar have traditionally abridged the number and variety of products an enterprise could reasonably stock and sell, as space is limited. Because of this, firms have had to rely on “hit” products – general items with broad appeal, of value to the widest cross-section of consumers. But the concept of the long tail states that the internet has created a new reality of infinite choice, no space limitations, low-to-no marginal costs for production and lower “search” costs for the consumer. As a result, consumers of the future will no longer focus on the blockbuster movie, the album made by the latest record company pop star, or the video game that’s ‘everyone is playing’. Instead, with the help of clickstream tracking tools (that collect data on customer web activity, process and feed to firms as useable profiling data), collaborative filtering (software that makes recommendations on future visits, based on past web visits), firms will know more, and in more detail, about consumers (Oestreicher-Singer, G 2009). These recommender systems (as exists on Netflix and Amazon for example) and product reviews from product users, consumers will be led down the tail of the curve, away from few items that sell heavily, to an almost infinite number of lower selling yet value-ladden items – selling less of more (Vallance 2007). The argument goes that, because costs to house these products are virtually nill (especially for, but not limited to digital products), retailers can “stock” them. Not only that, but Anderson argues that because consumers have been slaves to bricks and mortar, there is pent up demand for niche products whose sales will not only thicken and lengthen the tail, but also equal or best the sales in the head of the curve. This theory throws the Pareto Principle (the 80/20 rule that says, in retail, for example, that 80% of your sales will come from 20% of your products) up in the air. II.Thesis

1) The long tail concept is valid and quintessentially customer driven, not only for digital media, but also a growing number of other items in the retail universe. 2) That by its nature, the long tail engages the consumer in an affective and cognitive manner that is transcendental and more impactful. III.Thesis Findings

The “blockbuster” model...

Bibliography: * More interactive customer feedback and engagement; customers often submit their own ideas and products, or augment existing products directly
* Less emphasis on established brands and decreased brand equity and share of customer (Morrissey 2007)
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