Fair Share Index (Are you using it correctly?)

Fair Share Index (FSI):

Fair Share Index

There is a great analytical technique used in category management called Fair Share Index or “FSI”, which will allow you to compare $ share to tactics shares (like share of shelf, share of ads, share of display, share of items).  But it’s also one that can commonly be misinterpreted.

FSI Measure:

  • Calculation:  Brand or Segment Tactic Share ÷  Brand or Segment $ Share
    • (Tactic share examples are “Share of Shelf”, “Share of Ads”, “Share of Items”, “Share of Display”, etc.).
  • Example:–       Segment #1 $ share:  20.0

    –       Segment #1 share of shelf:  25.0

    –       25.0 ÷  20.0  =  125 Fair Share Index (FSI)

  • Interpretation:  Segment #1 gets 25% more support than its segment share.

A Fair Share Index of greater than 100 indicates that product has more support by a given tactic than their $ share, and less than 100 indicates that product has less support.  You cannot make a determination of whether or not this number is “good” or “bad” – you can only conclude at this point that this segment is getting a higher share of shelf than its segment share.  It’s similar to the “Index vs ACV” measure that I discussed last week – you need to go beyond the actual number before you can derive anything beyond this basic interpretation.

Once you have calculated the FSI’s for different tactics, you can start getting some new insights. In the coffee example below, you can see the FSI comparisons segment (Ground vs Instant) and by size (Small, Medium and Large).

Feature Display # Items Shelf
Category 100 100 100 100
Ground 85 78 77 71
Instant 143 117 100 119
Ground Value 133 96 37 155
Ground Mid 68 73 79 33
Ground Premium 78 75 110 76

Ground Coffee has significantly less support across all tactics compared to Instant Coffee, as indicated by the FSI’s that are between 70 and 85 across the tactics.  When we further drill into the Ground Coffee segment, we can see that the Ground Value is getting the most support in feature, display and shelving support, while Ground Mid and Premium are getting the least amount of support in these tactics.  The objective should not be to get the FSI’s to 100 for all of the tactics.  For instance, if this retailer’s objective is to be highly developed in Ground Premium, they may want the FSI’s to be above 100 across all the tactics (thereby giving this segment more support, to drive a strong development).  So they should be increasing their feature, display and shelving support in the Ground Premium segment, and taking away support from Ground Value and Instant.

The next time you use FSI numbers, remember to think of them in the context of the retailer’s overall strategies, and what they are trying to accomplish in the category.  An index of 80 or a 120 in a specific brand or segment may be exactly what they are trying to accomplish, based on those strategies!

Other Resources:

If you’re interested in learning more about Fair Share Index and many other measures related to effective benchmarking and category assessments, here are some great options for you:

Have a great day!

Sue

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