Contribution margin analysis
Contribution margin analysis is a technique used in
brand marketing and
product management to help a company decide what
product(s) to add to its product
portfolio. The manager asks what will happen to profits if a
new product is added or an existing product is discontinued. Calculations take into account additional revenues, additional costs, effects on other products in the portfolio (referred to as
cannibalization), and competitors' reactions.
see also Product management, profit, marketing, finance