A01 chaf6542 06 se fm indd

Product variable

The element of the 

marketing mix that 

involves researching 

customers’ needs and 

developing appropriate 

products.

Core product

The fundamental features 

of the product that meet 

the user’s needs.

Extended product

Additional features and 

benefits beyond the core 

product.

Mass customisation

Using economies of scale 

enabled by technology 

to offer tailored versions 

of products to individual 

customers or groups of 

customers.

Bundling

Offering complementary 

services.

superstore, and 57 times greater than the number of books stocked in a typical large 

independent bookstore.

Looking at the issue from another perspective, they estimate that 40% of sales are 

from relatively obscure books with a sales rank of more than 100,000 (if you visit 

Amazon, you will see that every book has a sales rank from 1 for the most popular to 

over 1 million for the least popular). This indicates the importance of the long tail for 

online retailers like Amazon, since 40% of sales are from these less popular books 

which cannot be stocked in a conventional bookstore (a large  real‑  world bookstore 

would typically hold 100,000 books). In a pricing context, another benefit for online 

retailers is that less popular products cannot be readily obtained in the real world, so 

Amazon can justify higher prices for these books. Brynjolfsson et al. (2003) estimated 

that average Amazon prices for an item in the top 100,000 is $29.26 and in less popu‑

lar titles $41.60.

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Chapter 8  Digital marketing

Companies such as publishers, TV companies and other media owners who can offer digi-

tal products such as published content, music or videos now have great flexibility to offer a 

range of product purchase options at different price points including:

● 

Subscription. This is a traditional publisher revenue model, but subscription can poten-

tially be offered for different periods at different price points, e.g. 3 months, 12 months or 

2 years.

●