Brand Development Index

From Wikipedia, the free encyclopedia
Jump to: navigation, search

Brand Development Index or (BDI) quantifies how well a brand performs within a specific group of customers, compared with its average performance among all customers.[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[edit]

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[edit]

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[edit]

References[edit]

  1. ^ a b c d 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: Marketing Activities and Metrics 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[edit]