What is Brand Development Index (BDI)?

brand development index definition
via: sendpulse

Why is a brand development index important?

Companies use a variety of marketing approaches to find the most appropriate budget allocation. In this way, they try to achieve the main marketing objective: to reach as many people as possible with the help of advertising without incurring unnecessary expense. One such approach is the Brand Development Index. It helps to identify the relationship between the total sales of a specific business and the population of a particular market. Depending on the company’s strategy, the BDI influences the number of funds allocated to a particular region.

This data allows companies to tailor their marketing, advertising, and sales efforts by providing them with insight into where the region resides. majority of consumers. The index is generally associated with aggressive and defensive marketing approaches. For example, a brand with a defensive marketing strategy will invest more in regions where the business is most popular (the Brand Development Index is higher) to strengthen palates in those areas.
If the company uses an aggressive strategy, it will spend more money on advertising in regions where the brand’s products are not in fashion and the BDI is low. When a brand development index in a specific region is low, a company needs to improve it, for example by allocating more funds for advertising in that region. One thing is clear: BDI is essential to a brand’s marketing efforts. Let’s make sure you know how to calculate this index. Learn about brand engagement.

How to Calculate a Brand Development Index?

BDI can be crucial in developing audience segmentation, targeting strategy, and positioning of a company. It indicates the level of the brand in relation to its market and the number of consumers. Below is a formula for calculating the BDI for your company.
Brand development index formula
via: marketingdietition

 

Formula for BDI

BDI is a useful tool in creating an effective market segmentation, target strategy, and brand positions as it gives the brand a measure of its market and consumer population.

BDI = (% of total sales of a brand in a particular market) / (% of the total population in a particular market) x 100

The Brand Development Index must be an integer.

A brand must internally evaluate its values, uniqueness, and what the customer wants. Research is needed after a comprehensive internal assessment. Brand advertising distinguishes the brand from its competitors and it is important for all shareholders to demonstrate that trust by placing trust on the brand and customer satisfaction at all touchpoints.

Brand Development Index and Category Development Index

Companies calculate the brand development index to describe the relative performance of their business to a specific group of customers. You must be a master of information such as demographics or psychology. As a result, you get data on strong and weak segments for specific companies. Additionally, you can use this indicator to assess a company’s presence in a specific target audience.

The Category Development Index defines the sales of a category of goods in the market relative to the average performance among consumers. It helps companies to get information about the performance of a particular product category in specific customers and to identify the strong and weak groups for product categories.

When used with BDI, CDI can be useful in any marketing strategy. This allows companies to access the data needed to allocate advertising budgets to specific areas to increase product category awareness and revenue. Learn about rich media advertising.

Companies need to measure both CDI and BDI to come to a conclusion about the market.

There are 4 possibilities:

 

Brand development index & category development index

 

1. High BDI and high CDI- In this case, both category and brand are said to work well. For example, if we consider the soap category under Lux or Dow, both have a high BDI. This suggests that the company should build more on the brand and stay in expansion mode.

2. High CDI Low BDI – In this case, the category works well but the brand is not able to get the desired market share. For example, if Margo does not perform well in the soap segment in a particular market, its BDI will be low. The company should strive to attract more customers and gain market share.

3. Low CDI High BDI- When a category is not working well but some brands are working well. For example, the talcum powder segment is declining, although talcum is doing well with a 50-60% market share. The company should try to revive the brand or gradually divert the business.

4. When low CDI is high CDI- brand, as well as both category does not work, the brand should leave the business. For example, Spinge or Yardley has a very small market share in the non-performing category. Learn about Ad network

Example Of Brand Development Index

 

Brand development indexexample
via: mbaskool

 

Hope! You find this article informative. Don’t forget to share and leave comments. Thank You.

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