CONTRIBUTION MARGIN ANALYSIS Definition

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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.

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HORIZONTAL COMBINATION is a business combination of companies with similar functions in the production or sale of comparable products.

MOU is Memorandum of Understanding.

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