Long Tail: modelling from mass markets to emerging minority markets
The digital environment and new opportunities for Internet commerce or e-commerce has generated a shift from traditional business models. Traditional models are based on focusing the business on very few successful products.
However there is a new market, which is the sum of many small sales of secondary products and this market may equal or exceed the traditional one in many sectors.
We need new modelling techniques to take advantage of these potential niche markets.
The concept of long-tail distribution has been commonly used in various fields, such as statistics and physics. It refers to the phenomenon by which a magnitude distribution exhibits a slow fall when the magnitude is close to very large values.
This behaviour is especially relevant in the context of Internet commerce or e-commerce, because the supply capacity is virtually unlimited and there is a demand, to a greater or lesser extent.
Long-tail distribution can model what would go unnoticed in markets (niches) or be ignored by a more traditional approach, which allows one to exploit sales in a new, traditionally ignored market.
AIA has extensive experience in long-tail modelling environments, and making any use of the information that creates value for the customer.
The benefits of using long-tail distributions are widespread:
- Allows discovery of new niche markets in different environments.
- Allows modelling in minority markets.
- Allows exploitation of emerging markets not covered by usual techniques.
- Detects customer behaviour in the minority-masked market.
Long Tail Monetization Procedure (Patent)
Appl. No.: 13/561,379
Filed: July 30, 2012