What is the Long Tail Theory? What is the law of two or eight?

1, the long tail theory

The long tail theory refers to: as long as the product storage and circulation channels are large enough, the demand is not strong or poor sales of the product *** with the market share occupied by a few hot products can match or even greater than the market share occupied by a small number of hot products, i.e., a large number of small markets converge into a market that can match the mainstream can be generated to rival the market energy.

For example, a large bookstore typically carries 100,000 books, but the world's largest online bookstore generates one-quarter of its book sales from books ranked in the 100,000s. The percentage of sales of these "cold" books is growing at a rapid rate, and is expected to account for half of the entire book market in the future.

This means a major shift in what consumers really want, and how they want to get it, when they are faced with unlimited choices, and the rise of a new business model. In short, the Long Tail involves cold products that cover the needs of almost more people, and when there is a need, more people will realize that need, thus making the cold no longer cold.

2, the law of two or eight

The law of two or eight, that is, in any group of things, the most important only account for a small part of them, about 20%, and the remaining 80%, despite the majority, is secondary. The law of two-eight was discovered in the late 19th and early 20th centuries by the Italian economist Pareto, who noticed the patterns of wealth and earnings of 19th-century Britons. Pareto found from a large number of specific facts that 20 percent of society held 80 percent of society's wealth.

For example, 80 percent of a merchant's sales come from 20 percent of the merchandise, and 80 percent of business revenue is generated by 20 percent of the customers. In the sales company, 20% of the salesman to bring back 80% of the new business; domestic enterprise management work in the "management" and "management" generally in accordance with the ratio of 8:2, while the world's economically developed countries in the management of enterprise work in the "management" and "management" and "management". The "management" and "management" follow the ratio of 2:8.

Extended information?

One, the long tail theory from

Chris Anderson, the United States "Wired" magazine editor-in-chief, like to find trends from the figures. Van Ardib discovered a secret from the digital music jukebox numbers stats: listeners have an infinite demand for 98% of non-hit music, and the market for non-hit music collections is immensely large and limitless. Listeners were fixated on almost everything! He called it the "Rule of 98".

He systematically studied the sales data of Internet retailers and observed a phenomenon that conformed to a statistical law (the law of large numbers). This phenomenon is like a demand curve on the two-dimensional coordinates of quantity and variety, trailing a long tail that extends to the end of the horizontal axis representing "variety," from which the long tail gets its name.

Two, the law of two or eight laws

1, the law of technology

The media industry's output value of 80% of the technical equipment industry, only 20% from the content industry. Internationally, the information technology industry, journalism and entertainment industry collectively referred to as the big media industry. What is usually called software is actually the hardware of the big media industry. Only by attaching great importance to information technology and strengthening research and development can we lead the era of big media and occupy the high ground.

2, the law of the market

The principle of communication reflects: in the situation of product homogenization, convenience is the decisive factor for the product to be selected. The TV industry generally believes that interactive TV with a set-top box to complete the interaction between the audience and the program, but the success of the TV and SMS interaction, once again repeating such a story. In the online space, too, it's the convenience and low cost of SMS and games that are overtaking the e-commerce business.

3, the law of the brand

20% of the strong brand, occupies 80% of the market share. Generally speaking, the first brand's market share is more than double that of the second brand, which is the brand with the greatest value in the industry. In the online world, the three major portals occupy the lion's share of the online industry, both in terms of attractiveness and revenue.

Baidu Encyclopedia - The Law of Two or Eight

Baidu Encyclopedia - The Long Tail Theory