What is a Brand index?
Brand Index is a percentage of a brand’s sales in a particular area in relation to the percentage of the country’s population in that area. If a brand has 10 percent of sales, for example, in an area where the 20 percent of country’s people live then its BDI (Brand Development Index) in that area is 50 (10 x 100 ÷ 20).
Brand Index helps to identify the potential and prospective buyers in a particular area and assists in direct marketing efforts. Thus, brand index is more of a marketing tool than otherwise as a measurement tool of Nation’s Prosperity.
This article on ‘Why not use a brand index to measure national prosperity?’ basically analyzes all ‘Ifs and Nots’ with respect to certain practical perspectives.
• As we all know, our national prosperity is measured in terms of GDP (Gross Domestic Product). Whether measured in total for a country or on a per-capita basis, GDP is the most familiar and widely used measure of national progress. GDP broadly represents a nation’s income and hence, an economic progress overtime.
GDP briefly, captures the value of all goods in the economy–whether consumed by households, governments, or businesses–and as such, it is an extremely useful single measurement of a country’s well-being.
• As against this, brand index becomes slightly restricted to the users of branded products alone and not the entire nation, when it comes to brand index as a measurement tool of nation’s prosperity.
The primary reason for this is ‘Economic Demographics of India’.
• As we see, it was only after LPG (Liberalisation, Privatisation and Globalisation) that more and more international brands were found entering Indian Markets. Also, this was the era when all domestic and international brands were seen striving for Brand Identity, Brand Expansion and Exposure.
Say for instance, it was only after the year 2002 that Indians saw a change in lifestyles with a range of shopping malls and brands like Dominoz, McDonalds, etc coming in existence.
• Now the question is ‘Can every Indian afford to buy these services?’, ‘Which age group adores these brands the most?’. And above all, ‘Do these brand users represent Asli India?’.
The very definition of brand as ‘a value creation’ makes it mandatory to answer the above questions. This is because which brand turns out to be a value creator is highly subjective from person to person. Say for example, 80% of teenagers prefer to opt for local branded clothes rather than opting for brand like Nike, Reebok, etc. Hence, here the statement of ‘representing Asli India’ justifies.
• Again, just to give a quick eye-view of ‘Economic Demographics of India’ : 27.5% of India’s population is “below poverty line”. And 35% of population is working population which falls in the age group of 18 – 55. Also, the percentage of population graduating from the category of ‘no money’ to ‘new money’ and vice-cersa changes on year-to-year basis.
These statistics are the clear evidences of the ever changing consumption pattern of India’s Population.
• In such a scenario, adopting Brand Index as a measurement tool of nation’s prosperity, would leave almost 30% of Indian Population – the Asli India, being untouched and unfit to be included under the category. Thus, relying on this tool would probably give imbalanced and imperfect picture of nation’s prosperity.
• Thus, GDP as a measurement tool (even though with some limitations) seems to give a clear picture of a Nation’s Prosperity.
NOTE: The examples in this article are included so as to establish a close applications with teenagers and the topic under discussion is not limited to the same. This being a highly subjective topic, the opinions may differ from person to person.
-Akshata Khamkar ..
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