Have you ever wondered how your brand compares to other businesses in the pet industry? How are your unit sales versus those of your competitors? How’s your revenue compared to the local market or the country’s total market? These questions require market research and calculating valuable metrics showing where you stand. By knowing how many units you sell per year, how much you spend on advertising per year, and how much revenue you bring each year, along with these numbers for the total market, you can calculate market share, share of voice, brand development index, and category development index. These metrics will allow you to make knowledge-based decisions for your business’s future and make the changes necessary to optimize your business plan in a way that will enable you to reach your business goals better.
Market Share:
Market Share reveals your brand’s competitive position. When looking at market share, we can do this in two ways: one is by value (revenue), and the other is by volume (unit). This is where you will compare your brand sales to the total market sales. Imagine a brand’s dog food sales are $2 million in your city of business, and the total dog food sales are $10 million. You would divide your share ($2 million) by the market share ($10 million) and realize that your market share is 20%. A way to boost your brand’s market share would be to increase market penetration through promotions, improve product offerings, or expand distribution.
Market Share = (Brand Sales) / (Total Market Sales)
Share of Voice:
Now, let’s talk about our brand’s share of voice, which indicates the impact and visibility of your brand’s advertising efforts. This is where we look at how much we spend on advertising compared to other brands in our market. This would be helpful if we want to compare our voice in the market for our industry compared to others. An example of how to calculate this would be If your brand spent $500,000 on advertising, and the total market spend was $2 million, your Share of Voice would be 25%. A way to optimize the share of voice would be to increase advertising spend in high-potential areas or improve the efficiency of current advertising.
Share of Voice = (Brand Advertising Spend) / (Total Market Advertising Spend)
Brand Development Index (BDI):
Brand Development Index, or BDI, helps identify regions or segments where your brand performs well relative to the overall market. This will help identify segments with high potential where a brand may be underperforming or help tailor marketing strategies to regional preferences and needs. If we use this knowledge compared with our value and volume market share, we can better understand what areas we could perform better in and which areas we excel in. An example would be if your brand sold $100,000 worth of cat litter in Florida, and your total U.S. sales are $1 million, the BDI for Florida is (100,000 / 1,000,000) x 100 = 10. A way to enhance BDI would be to focus on high-performing segments with targeted campaigns or tailored product offerings.
BDI = (Brand Sales to Segment) / (Brand Sales to Total Market) x 100.
Category Development Index (CDI):
Category Development Index or CDI highlights the overall market potential in specific segments, guiding where to focus marketing efforts. This calculation measures the sales performance of a product category within a specific market segment relative to its average performance across all markets. It helps identify market segments with high or low category demand. An example would be if total dog food sales in Florida are $500,000, and total U.S. sales are $5 million, the CDI for Florida is (500,000 / 5,000,000) x 100 = 10. A way to leverage CDI would be to invest in segments with high CDI to capture more market potential.
CDI = (Category Sales to Segment) / (Category Sales to Total Market) x 100
Knowing these calculations and how to use the different measurements to compare your brand to competitors in these areas will help you better view your brand’s place in the market. You can prepare for the future using these metrics, and they will allow you to make data-driven decisions that will enhance your brand’s performance and growth in the pet industry.
