Weighted Price Index Calculator
Calculate your aggregate market position using volume-weighted baskets. Move beyond simple averages to see your true competitive standing.
Market Basket
Total Price Index
5.4% Premium
My Basket: $9,750
Comp Basket: $9,250
SKU-Level Indices
Reading Your Index
100 is the anchor. Deviation is strategy.
Index 100-105
Safe Zone. You are effectively priced at market. Growth comes from marketing, not price.
Index > 115
Danger Zone (unless luxury). You are significantly more expensive. Expect volume loss unless you have a massive brand advantage.
Index < 90
Value Zone. You should be seeing high volume growth. If not, your product quality is likely perceived as poor.
Execution Steps
Enter your key products (SKUs).
Assign a 'Weight' to each (e.g., % of Sales Volume). The weights do not strictly need to equal 100, but it helps.
Enter your price and the competitor's price for each item.
The 'Total Index' tells you if you are overall more expensive (>100) or cheaper (<100) than the competitor, accounting for volume.
Pro Strategy
- If your Index is >110, you are a Premium brand. Ensure your marketing justifies this value.
- If your Index is <90, you are a Value brand. Ensure your cost structure supports lower margins.
- Often, brands are 'Cheap' on visible items (Key Value Items) but 'Expensive' on accessories to blend the index.
Core Concepts
Price Index Formula
(Your Price / Competitor Price) * 100. An index of 110 means you are 10% more expensive.
Weighted Basket
Not all products matter equally. A 10% price gap on your best-seller matters more than a 50% gap on a slow mover. Weighting corrects for this.
Parity Zone
Indices between 95 and 105 are generally considered 'at parity' or market-aligned.
What is Weighted Price Index Calculator?
The Weighted Price Index is the standard metric used by category managers and pricing analysts. It aggregates thousands of price points into a single number that represents competitive standing, weighted by the financial importance of each item.
Best For
- • Quarterly Business Reviews (QBRs) to explain market share changes.
- • Setting category-level pricing strategies.
- • Negotiating with suppliers (showing you are under-priced).
Limitations
- • Requires accurate competitor data.
- • Does not account for brand equity or non-price value.
- • Sensitive to the weights used (bad weights = bad index).
Alternative Methods
Unweighted Average
Simpler but less accurate.
Positioning Matrix
Visual map of Price vs Quality rather than a single number.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Regional Grocery Chain
Losing share to Walmart despite 'Low Prices' marketing slogan.
Calculated Weighted Price Index on top 50 'Key Value Items' (Milk, Eggs, Bread).
Industrial Parts Distributor
Customer perception was that they were 'expensive' despite competitive pricing on big machines.
Analysis showed Index was 130 on 'Consumables' (oils, filters) which customers bought weekly.