Cycle glossary

Product terminology simply explained

Product Profitability

Product profitability refers to the financial performance of a product or service. It measures how profitable a particular product is by comparing the revenue it generates with the costs incurred to develop, produce, and market it. Understanding a product's profitability is crucial for product managers as it helps them make informed decisions about resource allocation, pricing strategies, and future investments. For example, if a product is not generating enough revenue to cover its costs, the product manager may need to consider adjusting the pricing, improving its features, or even discontinuing it.

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