27. Which of the following statements illustrates the 80/20 rule?
a) «20 percent of our marketing effort is wasted,
but we don't know which one».
This is not the
correct answer. It is a paraphrase on John Wannamaker's famous quotation:
«We know that 50 percent of our advertising dollars are wasted, but
we don't know which one».
b) «We don't know whether our profits are 20 percent
higher than we deserve or only 80 percent of what might be easily obtained».
A statement that
has little to do with the 80/20 rule.
c) «80 percent of our target market doesn't respond
to our marketing mix, and we only have a 20 percent market share».
Ditto.
d) «Of the hundred retailers who carry our products,
the top twenty account for nearly 80 percent of our total business.»
This is the correct
answer. Stated otherwise, as a general rule, 80% of sales of a company
come from 20% of customers. Mind you, this rule is true in business-to-business
situations mainly. Once we deal with final consumers, this doesn't hold
anymore - or seldom so.
e)
None of the above.
Obviously not.