Your benchmark or base is used as the “denominator” for the penetration and index calculations.
A poorly selected base can lead to faulty analysis.
Two golden rules:
1. The base or benchmark must include all of the households being profiled.
2. The base or benchmark must include the consumers who had the opportunity to purchase or respond.
Examples of improper benchmarks [bases]:
An example of using a proper benchmark/base:
Think of a set of customers as being represented by the small green circle in the diagram above.
The larger circles (orange and purple) represent both proper and invalid base possibilities. For a base to be proper, the smaller circle (customers) must be completely surrounded by the larger circle (base). Any time the smaller circle represents an area not covered by the larger circle, the base is invalid.
In a second scenario, let's say we sent our marketing material to everyone inside the purple circle, but only got responses from people within the green circle. We must use the purple circle as the base because they had the opportunity to respond but just didn't.