Do Marketing Professionals Care about the Pareto Principle?

Abstract

The purpose of this thesis is to explore whether and how marketing practitioners use the Pareto Principle by studying the thesis statement: “The Pareto Principle: The opportunities and consequences for FMCG brands of relying on a Paretodistributed small core of consumers for a large portion of sales.” This study explores the existence and use of the principle in terms of labeling, segmentation, detriments, and potential of the trivial many. This is done through an exploratory qualitative study using semi-structured interviews of marketing practitioners within the FMCG industry in Norway. The findings indicate that marketing practitioners are generally unaware of the term Pareto Principle and refer to it as the 80/20 rule. They have limited knowledge about the small core, and therefore do not consider the principle when conducting marketing activities. Further, marketers feel a sense of responsibility towards their consumers and are concerned about the health and environmental impact of consumers’ overconsumption. Finally, the findings show that marketing practitioners are not dependent on the small core, in contrast to the assumption of academics, and believe in the potential of the trivial many. One implication of this study for marketing practitioners is that a data-driven approach should be taken to identify the small core and the trivial many. This approach would allow for usage-based segmentation and effective targeting in order to increase the potential sales from both groups. Another implication is that marketers should be aware of the potential detrimental effects of heavy use; a balance should be struck between wanting to sell their products and selling something that is not detrimental to consumers. Keywords: Pareto Principle, 80/20 rule, marketing practitioners, FMCG