Learn something new every day More Info... by email
Brands are constantly competing with other brands that have similar products. Each brand wants to have the highest percentage of sales and turn the best profit. The brand development index (BDI) is a measurement used in marketing to determine how well sales are doing in a particular area or among a particular demographic. There is no standard good or bad brand development index number, because the tool is used primarily for marketing purposes. By understanding where a brand’s BDI is the highest, marketers can identify both effective marketing areas and areas where changes need to be made.
To calculate the brand development index, a company must know how much of the sales market it commands in a particular area and how many people are in the area. Looking at sales numbers and seeing how many of those sales came from a certain area can help marketers determine the first factor. Population percentage depends on the area being studied, such as a state or region. If a region represents 30 percent of the country’s population, then 30 is the number used in the formula.
There are two steps to calculating a brand development index number. First, the sales percentage is multiplied by 100. If the region being studied represents 20 percent of the brand’s sales, then the number used is 2,000, because 20 multiplied by 100 is 2,000. This number is then divided by the population percentage — in this example, 30 — leading to an answer of about 67 out of a possible score of 100. A high brand development index number means the brand controls a large amount of sales in the studied area, compared to the size of the population.
By using this number, marketers can figure out how best to target their audience. In areas with a high brand development index, the company will likely continue marketing as it is to keep customers loyal and to try to convert those who are not yet purchasing the brand’s products. If the number is low, the company can decide either to stop marketing, because it is useless, or it can choose to increase marketing, because the number of potential customers to be reached is worth the extra effort. This depends largely on the company’s marketing budget and how low the figures are for the area.