EconAir

  You need to know three things about management:   80/20 Rule Opportunity Cost Compound Growth   80/20 Rule (Also called Pareto’s Law)   This idea says that a relatively small percent of actions account for a relatively large percent of outcomes. Find and concentrate your efforts on the important influences on your business. The original studies were about the concentration of income and wealth. Recent  studies seem to indicate increasing concentration of income and wealth in the United States. A company's choice of target market and market niches is critical to marketing strategy.   Some hypothetical examples.   20% of your customers account for 80% of your sales.   Often, companies with a large product line with many variations find that 50% of their products account for over 90% of sales. An even smaller percent usually accounts for most of the profits.   20% of your SKUs account for 80% of your stockouts (and lost sales).   20%...

  One of the biggest shifts since 2013 is that a majority (52%, up from 39%) now say they are “willing to spend extra for a brand with an image that appeals to me.” Ipsos,  Global Trends, September 19, 2025. STARTING POINT Pareto's Law, the 80/20 rule, is the starting point for marketing and price discrimination. As discussed in a related post on basic concepts, Pareto's Law says, among other things, that a relatively small percent of customers account for a relatively large percent of sales and profits. One reason is the concentration of income and wealth. Recent studies indicate increasing concentration of income and wealth in the United States. A company's choice of target market and market niches is critical to marketing and pricing strategy.   CONTENTIONS Pricing is a strategy, not something a company accepts or beyond its control. Price discrimination is one pricing  strategy. Price discrimination can be practice by individual companies or all compa...