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Questions and Answers
According to Pareto's law, what percentage of consequences come from a small percentage of causes?
According to Pareto's law, what percentage of consequences come from a small percentage of causes?
- 50%
- 10%
- 20%
- 80% (correct)
In marketing, Pareto's law can be applied to which of the following?
In marketing, Pareto's law can be applied to which of the following?
- 20% of your business activity comes from 80% of your network
- 20% of your business activity comes from 20% of your network
- 80% of your business activity comes from 80% of your network
- 80% of your business activity comes from 20% of your network (correct)
Pareto's Law is fractal, what does this mean?
Pareto's Law is fractal, what does this mean?
- It does not apply to any systems
- It applies to both large-scale and small-scale systems (correct)
- It only applies to small-scale systems
- It only applies to large-scale systems
What percentage of revenue comes from a small percentage of customers according to Pareto's law?
What percentage of revenue comes from a small percentage of customers according to Pareto's law?
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Study Notes
Pareto's Law
- 80% of consequences come from 20% of causes, according to Pareto's law.
- In marketing, Pareto's law can be applied to customer segmentation, where a small percentage of customers generate a significant percentage of revenue.
Characteristics of Pareto's Law
- Pareto's Law is fractal, meaning that it exhibits self-similarity at different scales, and the 80/20 ratio is observed at various levels of magnification.
Business Applications
- 80% of revenue comes from 20% of customers, according to Pareto's law, highlighting the importance of identifying and prioritizing high-value customers.
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