The Brand Development Index (BDI) measures sales performance in a specific area or demographic. To calculate it, a company must know its sales market share in an area and the population size. Marketers use this tool to identify effective marketing areas and make changes where necessary.
Brands are constantly competing with others that have similar products. Every brand wants to have the highest percentage of sales and make the best profit. The Brand Development Index (BDI) is a measure used in marketing to determine sales performance in a specific area or among a specific demographic. There is no good or bad brand development index number because the tool is mainly used for marketing purposes. By understanding where a brand’s BDI is highest, marketers can identify areas of effective marketing 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 specific 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. The percentage of population depends on the area being studied, such as a state or region. If a region represents 30% of the country’s population, 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 under study represents 20% of the brand’s sales, the number used is 2,000, because 20 multiplied by 100 is 2,000. This number is divided by the percentage of the population – 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 that the brand controls a large amount of sales in the area. studied compared to the population size.
By using this number, marketers can figure out how best to reach their audience. In areas with a high rate of brand development, the company will likely continue to market to retain loyal customers and try to convert those who are not yet buying the brand’s products. If the number is low, the business can choose to stop marketing because it’s pointless, or it can choose to increase marketing because the number of potential customers to reach is worth the extra effort. This largely depends on the company’s marketing budget and how low the values are for the area.
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