Posted in Marketing and Strategy Terms, Total Reads: 990
Definition: Brand Development Index
The Brand Development Index is an index that relates the percent of a brand’s sales in a market to the percent of total market. The brand development index measures the relative sales strength of a brand within a specific market.
BDI is used to quantify the relative performance of a particular brand in a defined customer group. It is usually done based on demographics or psychographics. It helps a company identify strong and weak segments for particular brands.
BDI=(% of a Brand' s total sales in a particular market )/(% of total population in a particular market ) x 100
The index should be a whole number.
A brand should internally assess it values, uniqueness and what the customer wants. A research needs to take place after a thorough internal assessment. Brand statements distinguish a brand from its competitors and it is very important for all the stakeholders to believe in the brand and demonstrate that belief by satisfying the customer at all touch points.
The companies have to measure both CDI and BDI to come to a conclusion about a market.
There are 4 possibilities
1. High BDI and High CDI- In this case the category as well as brand both are said to be doing well. For example, if we consider Soaps category under that Lux or Dove both will have a high BDI. This indicates that the company should build more on the brand and should be in extension mode.
2. High CDI Low BDI - In this case the category is doing well but the brand is not able to capture the desired market share. For example, in soaps category in a particular market if Margo is not doing well then it will have low BDI. Company should try to attract more customers and try to gain market share.
3. Low CDI High BDI- When a category is not performing well but even then some brands are doing well. For example, the talcum powders segment is degrading still ponds is doing well with around 50-60% market share. Company should try to revive the brand or gradually divest the business.
4. Low CDI High CDI- When a brand as well as category both are not performing then in that case the brand should quickly move out of the business. For example, Spinz or Yardley has very less share of market in a non-performing category.