Offer portfolio: deciding with contribution, role and overlap.
Evidence status
What was reproduced, and what it does not prove.
The JSON and the Python run verify avoidable contribution, net migration, withdrawal and simplification in the illustrative scenario. They prove neither real migrations nor causality.
- Technical specification of the offer-portfolio scenario, specification in French (opens in a new tab)
v1, 31 August 2026 · CC BY 4.0 · specification in French · Method document written by marketing-mix.net. The figures are illustrative: they are not market measurements.
Key distinctions
Three conditions before calculating.
Avoidable contribution
Withdrawal does not make every allocated cost disappear. Variable costs, specific avoidable costs, shared costs and transition investments must be distinguished. The relevant contribution is the one that genuinely changes with the decision.
Proven role
Entry, acquisition, defence, premium, retention or platform are hypotheses. A role is kept only if a measurable behaviour — migration, retention, conquest or risk reduction — confirms it.
Overlap and migration
Two close offers can usefully segment willingness to pay or simply fragment demand. The model estimates the choice without each offer, the destination of the customers and the margin transferred.
Method
Arbitrating the portfolio without cutting blindly
- 01Reconstruct the economics
Compute net price, volume, variable margin, service, returns, promotion and specific costs; separate the avoidable costs from the accounting allocations.
- 02Measure the distinctive use
Compare segments, missions, features, occasions and willingness to pay; quantify the overlap through behaviour, a choice experiment or a history of substitution.
- 03Simulate the withdrawal
Estimate total loss, migration to each internal offer, competitive conquest, attrition and transition costs; value each flow with its future contribution.
- 04Choose the trajectory
Invest, maintain, simplify, merge, migrate or withdraw; define a calendar, a destination offer, customer guardrails and a post-migration measurement date.
The contribution–role–overlap map
Six offers are positioned by net contribution and differentiation of use; size represents complexity and the links show the migrations.
Withdrawing a loss-making reference still destroys €12k
The Essential offer achieves €500k of revenue, €170k of variable margin and carries €190k of allocated costs. Only €80k are avoidable. On withdrawal, 55% of customers migrate to Standard with €120k of contribution, 15% to Premium with €48k, 20% leave and 10% give up the purchase.
Current avoidable contribution: 170 − 80 = €90k. Migration contribution: €120k + €48k = €168k, but those amounts include €90k of contribution that Essential would have achieved; net migration gain = €78k. Transition cost and discounts: €30k. Value of the withdrawal = 78 − 30 − 90 = −€42k. A service simplification saving €54k is worth +€12k compared with the withdrawal.
The accounting deficit of €20k came mainly from shared costs. Withdrawal would destroy value; the decision retained is to simplify Essential, raise its price and measure the migration before any removal.
Acceptance conditions
What must be true to act.
- 01
Allocated costs are separated from genuinely avoidable costs.
- 02
The strategic role has a behavioural measure.
- 03
Migrations and losses are valued offer by offer.
- 04
Withdrawal is compared with simplification, merger and repositioning.
Limits
What this analysis does not prove.
- Stated migrations differ from real choices under constraint.
- Shared costs can become avoidable only over a longer term.
- The competitive reaction changes the destination of the customers.
References
Works cited.
- Moorthy, K. S. (1984), “Market Segmentation, Self-Selection, and Product Line Design”, Marketing Science, 3(4), 288–307.
- Desai, P. S. (2001), “Quality Segmentation in Spatial Markets”, Marketing Science, 20(3), 265–283.
- Van Heerde, H. J., Srinivasan, S. & Dekimpe, M. G. (2010), “Estimating Cannibalization Rates for Pioneering Innovations”, Marketing Science, 29(6), 1024–1039.