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    Question

    A bank observes that 70% of its profits come from 20% of

    customers. This insight reflects which principle?
    A Product Life Cycle principle Correct Answer Incorrect Answer
    B 4Ps theory Correct Answer Incorrect Answer
    C Pareto principle Correct Answer Incorrect Answer
    D Penetration pricing theory Correct Answer Incorrect Answer
    E Market saturation rule Correct Answer Incorrect Answer

    Solution

    The Pareto Principle (80/20 rule) suggests that a small percentage of customers often generate a large percentage of profits.  Why Other Options Are Incorrect • A: Product growth stages. • B: Marketing mix elements. • D: Pricing strategy. • E: Not formal principle.  Banking Example: High net-worth individuals contributing majority of fee income.

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