The Long Tail Theory And Market Segmentation In The Chemical Industry Applications And Research

The financial crisis that started in 2008 has already spread to the real economy. Due to the drastic drop of consumption caused by the recession, the business market has witnessed a sharp decline as well. Facing severe competition, industrial enterprises actually do not have many options to mitigate. Generally, reducing expenditure and broadening income should be considered. Reducing expenditure usually means painful cost cut, and broadening income seems even more difficult. A company has to compete by a lower price if it does not stand the leading position for innovative technologies and products - It is nothing but temporary relief regardless of the consequences, unless the company is monopolizing the industry it is in. In order to start and sustain a profitable growth, the company has to get out of the cut-throat competition in the red ocean. It should focus on creating values for customers and itself, instead of beating the competitors. It should seek for differentiation to hit noncompetitive new marketplaces. Only in that way, the company will break loose from its competitors and find its blue ocean.We have seen that a significant number of companies in the Internet economy area have found or created many new markets, which are raising a lot of hot discussions about The Long Tail Effect. However, so far the long tail effect has been well explained for and applied to only Internet or entertainment industries, which are mainly dealing with digital products. When it comes to traditional physical commodities, undiminishable marginal cost seems to become the insurmountable barrier. Furthermore, there are many gaps between traditional industries and Intenet industry regarding the market segmentation, branding and operations. But I still believe there is opportunity of leveraging the ideas and concepts of the long tail theory and applying them to the traditional industries.Consisting of a huge number of individual economy entities, China has got a tremendous economy throughput. Most of the enterprises in China are small and medium-sized businesses. Though they are small as individual, they contribute nearly half of the GDP of China in total. Their needs are diversified that have never been met by the popular mass production, because most suppliers have to focus on limited major mass-markets due to their limited capabilities and high cost structures. However, it is a significantly huge market as well if we can put all of them together - and that is the blue ocean of industrial enterprises. Of course it is never a peaceful ocean. There are turbulence flows and reefs. But there are always brave and cautious enterprises that succeed in sailing their own new routes in this challenging area.This paper briefs and integrates the theories and existing research results of the long tail effect, market segmentation, and mass customization etc., analyzes the possibility for B2B industrial enterprises to enter new market segments especially the long tail markets, and proposes the practices. In the last part, a case of a chemical company is provided and discussed, as the examples of the practice of the suggestions. I hope the viewpoints of this paper can provide a valuable reference to the B2B industrial enterprises which are currently suffering from the economic recession.