Category Performance Ratio (CPR)

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Definition: Category Performance Ratio (CPR)

Category performance ratio (CPR) is the comparative performance of a seller for a given product category, when compared to its performance in all product categories. Category performance ratio (CPR) is generally represented with percentage (%) and is computed by finding the ratio between PCV (Product Category Volume) and ACV (All commodity volume).

Product Category Volume examines the share of the relevant product category sold by the stores in which a given product has gained distribution. On the other hand, All commodity volume is a weighted value of product availability or distribution completely based on total sales from the store. It can be expressed in dollar value or as percentage.

Formula of Category Performance Ratio (CPR)

The formula of CPR can be shown as below:

Category Performance Ratio (%) = Product Category Volume (%) / All Commodity Volume (%)

Category Performance Ratio (CPR)

Importance of Category Performance Ratio

By comparing the PCV and the ACV, it can be determined that whether the outlets are good at selling the category in question than in selling other categories, relative to the market as a whole. The category performance ratio of categories provides insight into whether the distribution network of a brand is more or less effective in selling the category of which that brand is a part compared to its average efficiency in selling all categories in which members of that network compete. If the category performance ratio of a distribution network is greater than 1, then the outlets that comprise that network perform comparatively better in the sale of the category in question than in the sale of other categories, relative to the whole market. Using this metric, retail chains can push products in the category that has CPR>1 and attain higher sales through strategically placing the brands in shelves. As it is known every category has a customer base that it caters to and it vastly depends on the demographics of the region to which a certain store belongs to. Often recognizing the category that is selling high in those regions is a meaningful indicator of the items that can be pushed compared to pull from customers. All these are ways to find out distribution metrics.

Similarity of CPR with CDI

Category Development Index = Category Sales to Group / Households in Group

Compared to its average performance among all consumers, the category development index (CDI) measures the sales output of a certain type of goods or services within a specific cluster. This ratio is more specific compared to CPR, as it doesn’t take into account all the commodities that the retail outlet has to offer.

CDI also evaluates the extent to which a retailer prioritizes one product category vis-à-vis the other products.

Example of Category Performance Ratio

If the PCV of Foodie Days’ Burger distribution network is 81.8% and its ACV is 84.9%, find its Performance Category Ratio.

CPR = PCV/ACV = 81.8/84.9 = 0.96 or 96%.

Foodie Day has succeeded in gaining distribution in the largest stores, but Burger Sales in these stores, however, run slightly below the average of all commodity sales in those stores, relative to the market as a whole. This means the outlet shows a slightly lower focus on burgers compared to other outlets.

Hence, this concludes the definition of Category Performance Ratio (CPR) along with its overview.

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