The business strategy known as the Long Tail is found in Media and Entertainment (Netflix, Amazon, iTunes), Physical Goods (eBay), Advertising (Google), Banking (Grameen Bank) and the concept is used to explain and justify the focus on the essence of small niche players.

The difference between Niche and Hits is that when something is a hit, it means that many people like it, i.e., it is selling very well, while a niche in the market is a specific area of marketing which has its particular requirements, customers, and products.

Niches as explained by Chris Anderson in 2004, can be sold at full price partially due to the scarcity of the goods thereby allowing companies to make significant profits.
Hits, on the other hand, is described to have relatively low profit due to the high cost of set-ups and the high rate of failure, consequently, hits tend to be sold at a lower price or a discount price because of the competitive nature of the retailers.

It is therefore conceivable that companies can make more profit from low unit sales of a relatively unknown product (at a high profit per unit), instead of only selling several items at a reduced price.

The benefits of running a niche company are much, once the company decides to remain a niche company instead of spreading out its wings, the organization can layout short and long-term goals and plans which will enhance clear objectives. Intensity defeats ex-tensity all the time! Concentrating your marketing strategy at their strongest point conserves forces and energies, this is because more is gained by finding a rich mine and mining it deeper than flitting from one shallow mine to another.

The ability of a niche company to concentrate on its area of specialization enhances market penetration, as it leverages a firm’s existing resources and capabilities.

Also, having a plan to develop sales relationships with larger customers, to encourage smaller customers to become larger ones as well as a plan for finding new customers plays an important role in the penetration of the market.

The idea of squeezing the lemon and extracting maximum juice is about getting close to your customers, knowing about them and their business so well that you can anticipate what they might need from you.

The tactics here include, cross-selling, up-selling, increase in usage rate, winning a bigger share of your customer’s spend on your products and asking for referrals. All of these tactics depend on identifying and truly understanding the specific set of customers to whom your product delivers distinctive benefits.

To maintain a good profit margin, your products should have something valuable to your customers especially something they can’t get from someone else and they will be prepared to pay for your product which in turn helps you avoid competing for price.

The single-mindedness of purpose, total concentration on your customers, and the use of these qualities in your business will find its mark on the market every time and overwhelm your competitors.

The message is prize intensity more than extensity, go deep before going broad.

Another benefit of running a niche company is that over time, a niche company can develop a reputation for its work in a given field. A niche company positions itself as a leader and expert in the field due to this reputation. Niche companies, therefore focus on doing one thing well rather than doing many things only adequately. Once their reputation is unassailable, they can intimate and win at all times.

Their solid reputation increases their presence and exaggerates their strength without them having to expend much energy; it also creates an aura around them that instills respect.

The infinite-shelf space allows the business to blossom using the internet as a tool to draw customers to their products and services.