The Jig Saw

Thursday, March 17, 2005

The Law of the Vital Few

For traditional retailers, business will always be where the sales volumes are. Pareto’s 80-20 principle states that "for many phenomena 80% of consequences stem from 20% of the causes." Or as it is popularly been understood in marketing - 80% of the sales should come from 20% of your inventory!

But the online market has its own rules, where storage space for the digital medium is essentially free, enabling online retailers to carry larger inventories and serve a niche market – iTunes, Google, Amazon ….



Source - Excite Query Distribution Posted by Hello

The figure shows that Long Tail is about expanding the markets .. to include products and customers that are currently "sub-economic"!

So if Long Tail removes the distribution and information bottlenecks, can it be used as a strategy to address the needs of a scattered rural population? Esp in a place like India where every dialect is a niche market and every state a world in itself?


1 Comments:

  • Stopped by to "Hi!"
    My new post is up on the web@
    http://kissay.rediffblogs.com

    By Blogger Vaibhav, at 10:54 AM  

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