To determine how well your brand is performing compared to the wider market for your product, determine your brands’ BDI, or brand development index. To find out how much of your product category is consumed in your market versus the overall market, determine CDI, or category development index.
These two measures are helpful for organizations to understand segments of an audience compared to the entire marketplace for that category or brand. These metrics can be applied to households, customers, businesses, or other data.
Why Determine BDI and CDI?
BDI and CDI help to point out well-performing or poor-performing demographic or geographic segments for a brand or category of product.
For example, if Kit Kat chocolate bars determined that their BDI in Miami is 120%, it means that more Kit Kt bars are consumed in Miami per capita, than in the overall U.S market. If further data shows that the CDI for chocolate bars in Miami is 136%, this reveals that more chocolate bars are consumed in Miami than in the rest of the country.
These BDI and CDI figures are revealing. Although Miami consumed 20% more Kit Kat bars than the rest of the nation per capita, it is still underperforming in Miami since the overall CDI of the chocolate bar category is 136%. This means that Kit Kat has 16% room for growth in the chocolate bar category.
To calculate BDI, divide the brands’ local volume consumption by the overall market volume consumption. For example, if the consumption in Miami of Kit Kat bars is 12 bars per person per year, and national consumption is 10 Kit Kat bars per person per year the calculation would be as follows:
12 / 10 = 120% = BDI. CDI is calculated by dividing the percentage share of category sales by the percentage of the Total category share of the market.
Useful Measures for Planning and Strategy
A brand’s development index and category development index are useful metrics for companies to help a brand determine their brand and category development in a particular market compared to the total overall market. These metrics expose opportunities and weaknesses and can help companies with their planning and goal-setting strategies.