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Definition

The heavy usage index, or weight index, is a measure of the relative intensity of consumption. It indicates how heavily the customers for a given brand use the product category to which that brand belongs, compared with the average customer for that category. The heavy usage index yields insight into the source of volume and the nature of a brand's customer base.[1]

Purpose

The purpose of the heavy usage index is to define and measure whether a firm's consumers are "heavy users." This metric answers the question, "How heavily do our customers use the category of our product?" When a brand's heavy usage index is greater than 1.0, this signifies that its customers use the category to which it belongs more heavily than the average customer for that category.

Construction

Heavy usage index: The ratio that compares the average consumption of products in a category by customers of a given brand with the average consumption of products in that category by all customers for the category.

The heavy usage index can be calculated on the basis of unit or dollar inputs.

      Heavy usage index (I) = Average total purchases in category by brand customers ÷ Average total purchases in category by all customers for that category

or

      Heavy usage index (I) = Market share (%) ÷ [Penetration share (%) x Share of requirements (%)]

References

  1. ^ Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc. <http://www.amazon.com/Marketing-Metrics-Definitive-Measuring-Performance/dp/0137058292>


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