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Category Development Index: Informing NPD and category investment decision making

As shoppers become more savvy, the retailing environment has become increasingly competitive. It’s not just about low prices (although that may help); for category managers it’s about having a point of difference, adding value and targeting needs.

Our Category Development Index (CDI) has been developed to better understand customer behaviour and make more informed NPD and category investment decisions. It’s been developed alongside our Category Risk Index (CRI), which helps identify future risk for existing categories.

We developed CDI/CRI off the back of the commercial success of our proprietary behaviour change modelling (BCM) framework. Thanks to traditional data sources and the pervasiveness of big data we have so many ways of understanding what consumers are and aren’t doing. Behaviour Change Modelling provides that direction. It is our validated psychological technique enabling brands to segment their target audience by which stage they’re at in the process of changing behaviour.

What we find difficult to quantify is what customers might be about to do. Is there an opportunity or risk to a brand or category from activity by other brands or by other factors (health, sustainability or environmental).

Utilising our BCM framework, our CDI and CRI indexes provide a one number summary, to identify how developed a category is. This is achieved by factoring in how many people are currently buying into a category, or on the cusp of doing so (CDI) or how many people have recently left a category or on the cusp of doing so (CRI).

The CDI is a snapshot of the potential a category has. However, entry to the category based on potential alone, may not automatically prompt those considering or planning action. Using BCM regression modelling we can inform marketing strategy by determining the messages that are most likely to engage at each stage. Our approach provides a quick indication of category potential and value and how best to talk to customers once in the category.

Download our paper to see how CDI and CRI can help better understand customer behaviour and make more informed NPD and category investment decisions.

For more information on our approach to category development please contact Rupak Sharma Senior Director, on +44 (0) 3333 208 220.

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