Market Index Calculator
Our Market Index Calculator allows you a very easy access to calculation the different market indices (CPI, MPI and MPI full) based on your market situation.
What are these indices?
Competitor Price Index (CPI) is an essential key performance indicator and also usually an abbreviation of consumer price index. However, there are multiple ways different organisations calculate their indices. Here are a few for example:
- competitor price index (CPI),
- product price index (PPI),
- market price index (MPI) and
- full market price index (full MPI).
The competitor price index is calculated from products you and your competitor have in common. It is a sum of all product prices you two have in common. Your index is 100, and the index is monitoring competitors against that.
You compare competitor basket sums to your basket sum. You divide their basket (same products that you and they have) with your basket sum and convert it to an index. Values <100 mean that the competing basket is cheaper than your basket. Values >100 mean that the competing basket is more expensive than your basket. If your competitor has a CPI of 100, your basket price levels are similar. 1 unit in index represent 1% difference. Meaning if a competitor index is 98 they are 2% cheaper.
Instead of adding all product prices in your basket together, (product price index) PPI is calculated by dividing your competitors’ product price by your price for each product. Then the average of these indices is calculated for your competitor.
Market price index (MPI) is calculated as follows. The average sum of all product prices in your competitors’ baskets is used as the base level of 100. We call this the market basket. You compare your basket to the market basket. You do the calculation by dividing the sum of product prices in your basket by the average sum of product prices in the market index. Values <100 mean that your basket is cheaper than the market basket. Values >100 mean that your basket is more expensive than the market basket. Value 100 means that your basket is, on average, priced similarly to all other baskets on the market.
