Brand Development Index

Brand Development Index or BDI quantifies how well a brand performs within a market, compared with its average performance among all markets.[1] That is, it measures the relative sales strength of a brand within a specific market (e.g., the Pepsi brand among 10–50 year old's).[2]

Purpose

The purpose of the BDI metric is to quantify the relative performance of a brand within specified customer groups. The Brand Development Index helps marketers identify strong and weak segments (usually demographic or geographic) for individual brands.[1]

The BDI is especially useful in conjunction with the Category Development Index (CDI). It can be used in deciding the allocations in the media to which a specific brand is advertised. It can also be used to determine how much advertising, or promotion effort is, or should be put in that specific market.

Construction

Brand Development Index (BDI): An index of how well a brand performs within a given market group, relative to its performance in the market as a whole.[1]

BDI (I) =
[Brand sales to group (#) ÷ Households in group (#)] ÷
[Total brand sales (#) ÷ Total households (#)]
Note: Although defined here with respect to households, these indexes could also be calculated for customers, accounts, businesses, or other entities. [1]

To illustrate its use: One might hypothesize that sales per capita of Ben & Jerry's brand ice cream would be greater in the brand's home state, Vermont, than in the rest of the country. By calculating Ben & Jerry's BDI for Vermont, marketers could test this hypothesis quantitatively.

Govoni also defined Brand Development Index or (BDI) as the index of brand sales to category sales.,[3] though this ratio is more commonly referred to as market share.

See also

References

  1. 1 2 3 4 Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River, New Jersey: Pearson Education, Inc. ISBN 0-13-705829-2. The Marketing Accountability Standards Board (MASB) endorses the definitions, purposes, and constructs of classes of measures that appear in Marketing Metrics as part of its ongoing Common Language in Marketing Project.
  2. ↑ American Marketing Association Dictionary. http://www.marketingpower.com/_layouts/Dictionary.aspx. Retrieved 2012-11-29. The Marketing Accountability Standards Board (MASB) endorses this definition as part of its ongoing Common Language: Marketing Activities and Metrics Project.
  3. ↑ Govoni, Norman A. Dictionary of Marketing Communications, Sage Publications, Inc, 2004.

External links

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