The 80/20 two-tier scheme:
A) Is used to justify the philosophy that all customers deserve the same level of service
B) Assumes profitability does not determine who the best customers are
C) Assumes all customers within each tier are homogeneous
D) Is totally unrelated to marketing segmentation
E) Is accurately described by all of the above

Question

Quizplus · Accepted Answer

The 80/20 two-tier scheme assumes that all customers within each tier are homogeneous, meaning they have similar characteristics and behavior. It divides customers into two tiers based on their level of profitability, with the assumption that the top 20% of customers are the most profitable. This scheme is related to marketing segmentation, as it is a way to identify different groups of customers based on their profitability. However, it does not necessarily prioritize providing the same level of service to all customers, as it is focused on maximizing profitability.

The 80/20 Two-Tier Scheme