80/20 Rule
Pareto Principle
80% of the outputs come from 20% of the inputs
80% of the effects come from 20% of the causes
80% of sales come from 20% of the customers   
 
last updated 2017 Sept 28
 
. This page used in the following courses taught by Prof. Richardson
.
MRK106 .
..
 
INTRODUCTION , In teaching marketing and business, teachers look for ways to describe situations by explaining how a small number of things effect a large number of things

The 80/20 rule is used in discussing

  • sales
  • profits
  • time management
  • supply chain design
    • 80% of your shipments go to 20% of your ship-to locations
  • even weight loss and dieting
vv.

,
. , Italian economist Vilfredo Pareto in 1906. 
Dr. Joseph Juran, 1940's
Chris Anderson, author "The Long Tail"
 
 
.c
vv.
, Italian economist Vilfredo Pareto in 1906. 
Dr. Joseph Juran, 1940's

Pareto looked at how the majority of money, property and wealth is concentrated within a small number of people -- approximately 20 percent of the population.

20 percent control 80 percent

Following widespread circulation of this concept, the 80/20 rule was applied to other situations, like marketing and business education.
- for example, 20 percent of marketing messages produce 
    80 percent of your campaign results
- profits/sales, A typical business earns approximately 80 percent of its profits/sales from the top 20 percent of its customers
- Juran, 20% of all defects cause 80% of problems
- Marshall, "Small-business owners waste their time on what I call $10 an hour work, like running to get office supplies. Meanwhile, they forgo the activities that earn $1,000 an hour, such as sending the right email to the right person"

from 
http://yourbusiness.azcentral.com/80-20-rule-marketing-6554.html
http://www.marketingprofs.com/5/syrett10.asp
https://www.entrepreneur.com/article/229813
https://www.forbes.com/sites/kevinkruse/2016/03/07/80-20-rule/#98859623814b
.c
, Pareto
can you apply it all the time?

"While most practicing managers agree that the Pareto principle or the 80-20 rule can apply to business performance issues such as profitability, a minority believe that it never applies to them. Typically, the reasons for such objections to the 80-20 rule vary, but one reason is that the shape of the cumulative profitability curve does not "exactly" match the textbook case of the Pareto law."
Bala Deshpande April 2012
 
 

from 
http://www.simafore.com/blog/bid/103880/80-20-rule-for-profitability-a-good-thumb-rule-or-a-fundamental-law
 
.c
.
witiger.com
   CONTACT I MAIN PAGE I NEWS GALLERY I E-BIZ SHORTCUTS I INT'L BIZ SHORTCUTS I MKTG&BUSINESS SHORTCUTS I TEACHING SCHEDULE
.
  MISTAKES ITEXTS USED I IMAGES I RANK IDISCLAIMER I STUDENT CONTRIBUTORS I FORMER STUDENTS I
.
.