Which of the following statements illustrates the 80/20 rule?
A) "80 percent of our target market doesn't respond to our marketing mix, and we only have a 20 percent market share."
B) "Of the hundred retailers who carry our products, the top twenty account for nearly 80 percent of our total business."
C) "20 percent of our marketing effort is wasted, but we don't know which 20 percent."
D) "We don't know whether our profits are 20 percent higher than we deserve, or only 80 percent of what might be easily obtained."
E) None of these is correct.

Question

Quizplus · Accepted Answer

The statement "Of the hundred retailers who carry our products, the top twenty account for nearly 80 percent of our total business" illustrates the 80/20 rule, also known as the Pareto Principle. This rule suggests that roughly 80% of effects come from 20% of causes, meaning that in this example, the majority of the company's sales are coming from a small percentage of retailers.

Which of the Following Statements Illustrates the 80/20 Rule