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Category Management Training: There’s Nothing “Fair” About a “Fair Share Index”

by Sue Nicholls, President, Category Management Knowledge Group

In today’s world, there is much emphasis on deriving effective and strategic insights in category management.  With all of the incredible data sources available to both retailers and suppliers, there are certain measures that are consistently used to derive these insights.  For some of these more commonly used measures, there’s a tendency to generalize the interpretation of the numbers, or not scratch below the surface and think about what the numbers really mean.

One example of this is “index”, which …

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 …

Category Assessment: All Commodity Volume (ACV) and Index vs ACV

All Commodity Volume:

All Commodity Volume is an important term to understand for both retailers and suppliers.  Simply put, All Commodity Volume (or “ACV” or “All Sales Volume”) is a sum of all category sales in a total store.  The categories that are included in the ACV definition depends on the channel composition (for example, is it the “Total Market” or “Grocery Channel” or “Drug Channel” or “Mass Channel”).  If you are unsure as to the categories that are included in the ACV number, you should check with your third party data provider.

ACV Measures:…

Category Management Series Tip #8: What is a “Good” or “Bad” Index?

Calculating an “index” is a common practice in category management – index vs ACV (or all sales share), fair share index, index vs year ago – to name a few.   An index provides a comparison between two sets of numbers, and can be very useful data.  But there tends to be some generalizations when using an index.  For example, if I create an index that compares a retailer’s category market share and a retailer’s ACV market share, if their index is > (greater than) 100, it is “overdeveloped” or …