What is true about the formula for CDI?

The formula for Category Development Index (CDI) is designed to analyze the performance of a specific brand or product category within a market. When focusing on the correct statement, the essence of CDI lies in its ability to compare brand share at a retailer to market share.

CDI provides insights into how well a product category is performing in a particular market compared to its overall performance across all markets. By comparing brand share (which reflects how a specific brand is performing within that specific retailer) to market share (which provides the broader context of how the category is performing across all retailers or markets), CDI enables retailers and manufacturers to identify opportunities and challenges in their product offerings.

Understanding this relationship is crucial for effective category management, as it helps stakeholders make informed decisions about marketing strategies, inventory management, and resource allocation. The focus is clearly on the comparative analysis between the retailer’s brand share and the total market share for a more comprehensive view of performance.

Absent from this correct interpretation are the ideas of requiring multiple retailers, applicability to any product category, or the necessity of including average pricing. CDI, while useful across various categories, primarily thrives on comparative performance metrics rather than pricing mechanics or retailer count.