SAP Promotion Management Business Process Flow

SAP Promotion Management for Retail
Part 1: PMR Business Process Overview
November, 2014
Objectives Slide
At the end of this lesson, you will be able to:

Understand the business process flow in PMR
Understand the PMR objects
Explain the business benefit of PMR
© 2015 SAP SE or an SAP affiliate company. All rights reserved. Early Knowledge Transfer Customer 2
Promotion Management - Goal
Support Planning
activities
Promotion data
available for supply
chain execution
Publish promotion:
Printed & distributed
Promotion
price at POS
Promotion data
available for reporting
Promotions – different activities & timelines
Example
Start
Promotion Calendar, promo
Themes, Expression, sales
(financial) Targets, Coordination Printing
Targeted Groups & distribution
Marketing &
Advertisement
Changes
Promotion articles & , price

planning, sales forecast, what-if
Category analyses, Vendor Funding
Management
Procurement, allocation,
logistics
Supply Chain
Execution
Promotions – different activities & timelines
Example
Start
PMR promo
Promotion Calendar,
Themes, Expression, sales
(financial) Targets, Coordination Printing
Targeted Groups & distribution
Marketing &
Advertisement
Changes
Promotion articles & , price

planning, sales forecast, what-if
Category analyses, Vendor Funding
Management
Procurement, allocation,
logistics
Supply Chain
Execution ECC
PMR - Promotions Process Flow
Execute
Events, Templates, and
Advertising Advertising
Marketing
Build Promotion
Pricing
Calendar
Approve
(and Allocation/
Change) Replenishment
Offers, Vendor Funds,
Forecasting
Contract
Settlement
Category
Management
PMR – Components Flyer
Theme
Validity Period
Nr. Pages
Articles / Article
Valid Stores Groups
Promotion
(Financial) Goals Construction & Price
Images
Selling Description
Page Structure Lay Out

(Layout)
Vendor Funding
PMR – Components Flyer
Terminology
CAMPAIGN
Theme
Validity Period
Nr. Pages
Articles / Article
Valid Stores Groups
Promotion
(Financial) Goals Construction & Price
Images
Selling Description
EVENT OFFER
Page Structure Lay Out
(Layout) TEMPLATES
VENDOR FUND Vendor Funding
PMR Terminology Overview
PMR – Offer
What is an Offer?
Buy 2 of Product B,
pay $4
Buy 1 of Product A,
pay $2.49
Buy 1 of Prod.Grp X,
save $3
PMR – Offer
Offer construction
PMR contains a flexible concept of creating different offer construction:
And Buy Product Discount Price

Or Get Prod. Group Discount Amount
Get Reward Hier.Node Discount Percent
Generic Regular Price
Display Free
Transaction Additional fields:
• Limit
• Enforce Multiple
• Minimum Amount
Offer – Construction
Example 1
Buy 1 “Water 20x600ml” for $2.49
Buy 1 Product Water Promo 2.49

20x600ml Price
Example 2
Buy 2 “Corn(5Tray)” for $4.00
Buy 2 Product Corn Promo 4.00

(5tray) Price
Customer buys (qty) – reg.pr=2.00:
1 2 3 4
2.50 4.00 6.50 8.00
Customer
2.00 4.00 6.00 8.00
pays (total)
2.50 4.00 6.00 8.00
Example 2 – Enforce Multiple
Yes
the customer only gets the promotion when the quantity in the basket is a multiple of the “quantity” in the
offer. This is usually the case for European retailers
example: customer buys 1 regular price;

customer buys 2 promotion price;
customer buys 3 2 for promotion price + 1 for regular price
No
the customer always gets the promotion price, independent of how much the customer buys (the “quantity”
in the offer is only for marketing purposes. This is usually the case for American Retailers
Initial
once the first threshold is met, the customer will always get the promotion price, below the threshold the
customer has to pay the regular price
example: customer buys 1 regular price;

customer buys 2 promotion price;
customer buys 3 all for promotion price
Example 3
Buy any of Prod.Grp. “HD IceCream” for $4.49
Buy 1 Product HD Ice Promo 4.49

Group Cream Price
Example 3 (alternative)
Buy any of Prod.Grp. “HD IceCream” for $3.00 off
Buy 1 Product HD Ice Amount 3.00

Group Cream off
More examples
Buy 1 prodA for promo price, limit 2
Buy 1 Carton prodB for $3 off
Buy 2 prodC for regular price, get 1 prodC free
Buy any of Prod Grp3 or buy any of Prod Grp4, get prodD 20% off
Buy any of Prod Grp1, get 20% discount on any of Prod Grp2
Buy for at least $100, get voucher of $5
Packaged offer: buy prodA and prodB for a total price of $10
….
Project Activity: which offer constructions are needed?
Offer – Graphics (Preview)
Template: Block/Content
Once the offer has been constructed; a graphical representation (preview) can be made
(optional)
This Offer Preview uses the data from the offer (e.g. promotion price), but also attributes from
the article(s) used in the offer (e.g. image and selling description)
A template is used to map the right attribute to the right spot in the preview
Two types of templates are available in PMR:

• Block template
• Content template (optional)
Only “posted” templates can only be assigned to offers
Templates are re-usable and are usually set up once; Marketing can create and change
templates when needed
Offer – Graphics
Templates (Block)
Image Image Image
buy Promo Promo Promo

Selling Description Selling Description Save Selling Description
Pr/EA Price Price Price
Offer – Graphics
Templates (Content)
Image Image Image
buy Promo Promo Promo

Selling Description Selling Description Save Selling Description
Pr/EA Price Price Price
3 block templates
Image
vs.
1 block template
2 content template
Promo
Selling Description
Price
Advantage:
buy Promo Promo
Pr/EA Price
Save
Price ease of maintenance
Offer – Graphics
Templates
• Offer has preview to show graphics
• Re-usable (Block) Templates to structure offer preview
• Re-usable (Content) Templates to support diversity and reduce maintenance
Project Activity: which block/content templates are needed?
Offer – Other Functionalities
Offer Versions
• Differentiate offer content for group(s) of stores (e.g. price)
Forecast expected promotion sales (qty)

• Based on historical sales and offers (tactics / construction)
• Bottom-Up
• Override possibility
Offer Financials
• Detailed information on article/site and aggregate level
• 80+ KPIs
• Revenue / Profit / Margin / Save / Save up / Save from / …
Vendor Fund Assignment

• Vendor income
• Improve profitability
Status Management
Transfer to ECC
• Execution & follow up
Offer
Screenshots
Offer Header
Offer
Screenshots
Offer Construction
Offer
Screenshots
Offer Financials
Offer
Screenshots
Offer Preview
Offer
Screenshots
Block Template
Promotions Process Flow
Execute
Marketing
Build Promotion
Pricing
Calendar
Approve
(and Allocation/
Offers, Trade Funds,
Forecasting
Contract
Settlement
Category
Management
Campaign & Event
Overview Concept
Back to Christmas Campaign

Easter ‘15
School ‘15 ‘15 (Theme)
Flyer Radio Flyer Web Flyer TV In Store Event

(Expression)
Ofr1 Ofr2 Ofr3 Ofr4 Ofr5 Ofr6 Ofr7 Ofr8 Ofr9 Ofr10 Ofr11 Ofr12 Ofr13
Offer
(Art/Price)
Offer: grouping of articles Event: grouping of offers Campaign: grouping of Events
Campaign & Event
Who does What
Marketing
Back to Christmas Campaign

Easter ‘15
School ‘15 ‘15 (Theme)
Flyer Radio Flyer Web Flyer TV In Store Event

(Expression)
Ofr1 Ofr2 Ofr3 Ofr4 Ofr5 Ofr6 Ofr7 Ofr8 Ofr9 Ofr10 Ofr11 Ofr12 Ofr13
Offer
(Art/Price)
Category Management
Event
Steps & Time Line
Event header
• Description • Expression (tactic)
8 months out • Assign to Campaign
• Period
• Locations
Offer Creation & Maintenance

Event partitions
• Participating departments
6 months out • Open Partitions (e.g. Front Page)
• Financial Goals / partition
Area (Page) definition

5 months out • Total nr pages in flyer
• Sequence pages (department)
Area (Page) Layout

4 months out • Grid Layout of page (Area Template)
Offer-Event Assignment
3 months out
• 1 offer per block / page
8 weeks out Flyer Preview & Validation (on screen)
4 weeks out Transcontinental & Printing
Event
Example
Event Header Name: Flyer December’14 Tactic: flyer Campaign: December’14

Validity period: week 50-51 All stores Sales Plan: 3mln / 20%
Front Page -> 1mln / 15% margin Grocery -> 2 pages -> 400k / 30%
Event Partitions Back Page -> 500k / 20% margin Meat -> 2 pages -> 750k / 10%
Bakery -> 2 pages -> 500k / 25%
Event Preview
P1: P2: P3: P4: P5: P6: P7: P8:
Area (Page) front back
bakery meat grocery
page page
Area Layout
front bakery meat grocery back

Event-Offer Assignment
Offers
Event – Graphics (Preview)
Template: Area
A Page (Area) of a flyer contains 1 or more offers
To assign offers to the right spot on the page, an Area Template is required, to
structure the layout of the page
Marketing usually sets up these (re-usable) Area Templates in advance
Only “posted” Area templates can be assigned to an area (page) of an event

The difference between area templates and block/content templates is:
• Area template has a size, block template does not
• Area template has a tactic (type) assigned, a block template not
• Block/content templates have attributes assigned, an area template not
• Block/content templates are use in offers, Area templates in events
Campaign
Screenshots
Step 0: Campaign
Event
Screenshots
Step 1: Event Header
Event
Screenshots
Step 2: Event Partitions
Event
Screenshots
Step 3 & 4: Area (Page) Definition & Area Lay Out
Event
Screenshots
Area Templates
2 block 4 block 2+4 block 6 block
4+6 block 1+2 block 1+11 block
Event
Screenshots
Step 5: Offer Assignment
Event
Screenshots
Step 6: Event Preview
zoom
Event – Other Functionalities
Market Versions
• Different regions have different Event Lay Outs
Open Partitions
• “Bidding” for Front/Back page
Event Financials
• Event plan versus Offer Forecast
Event specific offer layout
Event Preview print (pdf)
Planning Workbench
• Workload / progress overview
Area of Responsibility
• Can only see the specifically assigned areas / partition
Area Template maintenance
Project Activity: which functionalities are needed?

Execute
Marketing
Build Promotion
Pricing
Calendar
Approve
(and Allocation/
Forecasting
Contract
Settlement
Category
Management
Vendor Fund
Introduction
Purpose Vendor Fund: improve profitability offer
Vendor Fund = Vendor Deal
Vendor Fund Types:

• Scanback
• Fixed Sum
• Lump Sum
Total / Tiered Amount Scanback
Product & Product Group Assignment
Status Management
Assign VF to Offer
Offer can have multiple VFs assigned
VF can be assigned to multiple Offers
A Vendor fund can be transferred to ECC as a Condition Contract (depends on ECC release)
Project activity: how are Vendor Funds mapped from CoCo and utilized in PMR
Vendor Fund
Example
Offer: buy 1 Häagen-Dazs for $4.49 Regular Sales Price: 7.49 / EA

Back Page goal: 20% margin Regular Purchase Price: 4.10 / EA
Regular Gross Profit: 3.39 / EA
Regular Margin: 45%
Promotion Sales Price: 4.49 / EA

Regular Purchase Price: 4.10 / EA
Promotion Gross Profit: 0.39 / EA
Promotion Margin: 8,7%
Does not meet BackPage target of 20%
Promotion Sales Price: 4.49 / EA

Vendor Fund Types:
Regular Purchase Price: 4.10 / EA
Scanback
Vendor Fund Scanback: 0.50 / EA
Fixed Sum
Promotion Gross Profit: 0.89 / EA
Lump Sum
Promotion Margin: 19,8%
Vendor Fund
Offer Assignment
Vendor Fund
• Name Offer
• Vendor • Name
• Validity Period • Validity Period
• Locations • Locations
• Vendor Fund Type • Construction
• Fund Amount
• Products
• Products
Vendor Fund
Offer
• Name
• Vendor • Name
1+ product in common
• Validity Period • Validity Period
1+ location in common
• Locations • Locations
Offer period within VF period
• Vendor Fund Type • Construction
• Fund Amount • Products
• Products
Vendor Fund
Screenshots
Vendor Fund Maintenance
Vendor Fund
Screenshots
Vendor Fund – Offer Assignment (offer financials before)
Vendor Fund
Screenshots
Vendor Fund – Offer Assignment
Vendor Fund
Screenshots
Vendor Fund – Offer Assignment (offer financials after)
Without Vendor Fund $0,50 / PC Scanback:
Vendor Fund
Screenshots
Offer Financials – Vendor Deal Impact
Execute
Marketing
Build Promotion
Pricing
Calendar
Approve
(and Allocation/
Forecasting
Contract
Settlement
Category
Management
Modeling & Forecasting
Purpose Forecasting: Improve profitability Offers

• “What If”-Analysis
Forecast based on historical information

• Price Reduction elasticity
• Offers with similar construction
• Offers with similar tactics (expressions)
• Seasonal / Holiday effects
Bottom Up Quantity planning

• Forecast on product/location level
• Rolled up
Manual Override
• Forecast is kept in offer for comparison
• BADI override
Details Calculation
Advertising Seasonality, Retail POS

Pricing & Availability
& Incentives + Assortment + Trends & + (out-of-stock) Transactions
Holidays
Demand
Data
External /
Syndicated
IRI
Aztec
…
Other factors: Competition, Unexpected Events Data Volume: Billions of

transaction records
Details Calculation
Demand Modeling
Historical Demand Data + Historical Inputs (e.g. price) Demand Model Equation
Find the “best average” vs. input (signal beneath the “noise”)
q0 p v 2CN
D4 NT Av1QTK F2CKN e 1Q 2 N 1QTK
US ~
4 N ( z4 NT 1) 1
Forecasting
Demand Model Equation + Planned Inputs (e.g. price) Future Prediction
q0 p v 2CN
US ~
4 N ( z4 NT 1) 1
Optimization
“A mathematical technique for finding a maximum or minimum value of a function of several
variables subject to a set of constraints.”
q0 p v 2CN
US ~
4 N ( z4 NT 1) 1
Details Calculation
Short/Long Term
SAP Retail Promotions Planning
Forecasted What if
Units (price, discount,
tactics,…)
Modeling &Forecasting (DMF/UDF)

ERP
Prices,
Demand/ Modeling Forecasting Offer
Transaction (multivariate …
(what-if)
Data regression)
Stores/ Influence
POS Demand
Transactions
BW/CAR/
Other
Integration
Requirements
Recommendation: 2 years history

• Sales data
• Store
• Day
• Article
• Price
• Promotion ID
• Offer details
Accuracy Validation test

• Hold out test
• …
Tuning of Model parameters
Pilot Implementation
Project activity: how will Forecasting be implemented?
For more information on UDF, please see the UDF-RKT material
Execute
Marketing
Build Promotion
Pricing
Calendar
Approve
(and Allocation/
Forecasting
Contract
Settlement
Category
Management
Business Process Map
Offer Simulation & Transfer to ERP
Master Data, Sales Assign Offer to
Manage Campaign and Forecasting. & BW and Export
& Offers and Image Event and
Infrastructure Event Planning See DDF to Desk Top
Load Perform Analysis
documentation. Publishing
Import Articles,
Prepare Article
Locations, Define Events Associate Offers Export Event
Groupings.
Hierarchies, Create Templates and Campaign to Blocks within Desk Top (DTP)
See DDF
Prices. See DDF Level Groups Areas Publisher
documentation.
documentation.
• Assign Location and
Create Product Dimension DTP
Integrate Images Product/Product Partition Event to Offer Negotiate Offer Accepts Export
(requires customer to
Group Attributes. (Optionally Plan • Construct Offer Assignment within (requires customer
build image import Terms and assign
service) See DDF Financials) Event to build DTP Export
Vendor Funds
docoumentation. service)
• (Optional Version Offers )
Import Historical • Create System

Assign Structured Forecast
Sales and Offers Define Tactic or Blank • (optional: Obtain 3rd Confirm Content
(initialization function).
Types and Tactics Party Forecast) or and Approval Transfer to BW
See DDF
Templates to
• Manually Assign
documentation Areas
User Projections
Store Groupings Analyze

Assign Partitions
and Master Promotional Preview of Transfer to ERP.
(Category/Sub-
Locations. Offers and Versioned Areas See DDF
Categories) to
See DDF Financial for Locations Documetnation.
Blocks
Documentation. Calculations
Compute Demand Marketing

Review, Edit, Accept
Models. Buying
Confirm Offer Promotional
See DDF
Content Offers for Event Advertising/Agency
Documentation.
Partner
Note: Many process steps are iterative, recurring processes e.g. considering Offers into Events,
Financial Analysis, Importing of Historical sales, Modeling and Forecasting … White space
Summary Part 1
• Standard PMR Flow
• Campaign Theme / Grouping Events
• Event Expression type / Participants / Page Sequence & Structure / Preview
• Offer Construction / Preview
• Vendor Fund
• Templates Area / Block / Content
• Modeling & Forecasting
• Masterdata & Image
Why PMR?
Business Goals:
• Gross Profit Increase offers / financial analysis
• Higher Efficiency Transcontinental Integration event / lay out preview
• Inventory Reduction (replenishment/allocation) forecast (offer-article-store)
Additional Benefits:
• Data entry error reduction
• 1 version of truth
• Immediate transparency
• Detailed reporting (planned vs actuals)
• Standard Integration
Lesson Summary
You should now be able to:

Explain usage of PMR with promotion process
Explain standard PMR process steps
Understand purpose Campaign / Event / Offer / Vendor Fund
Understand functionality of templates
Explain the business benefits of PMR
Next Steps
More information
Get acquainted with the integration section of PMR
Read the PMR chapters on help.sap.com
Visit the 3-day PMR training (W26PMR)
© 2015 SAP SE or an SAP affiliate company.
All rights reserved.
No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an
SAP affiliate company.
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE
(or an SAP affiliate company) in Germany and other countries. Please see http://global12.sap.com/corporate-en/legal/copyright/index.epx for additional
trademark information and notices.
Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors.
National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind,
and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or
SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and
services, if any. Nothing herein should be construed as constituting an additional warranty.
In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related
presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated
companies’ strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be
changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment,
promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties
that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

SAP Promotion Management Business Process Flow

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

SAP Promotion Management Business Process Flow

Enviado por

Direitos autorais:

Formatos disponíveis

SAP Promotion Management for Retail

Part 1: PMR Business Process Overview

At the end of this lesson, you will be able to:

Promotion articles & , price

Promotion articles & , price

Page Structure Lay Out

PMR contains a flexible concept of creating different offer construction:

And Buy Product Discount Price

Buy 1 “Water 20x600ml” for $2.49

Buy 1 Product Water Promo 2.49

Buy 2 “Corn(5Tray)” for $4.00

Buy 2 Product Corn Promo 4.00

example: customer buys 1 regular price;

example: customer buys 1 regular price;

Buy any of Prod.Grp. “HD IceCream” for $4.49

Buy 1 Product HD Ice Promo 4.49

Buy any of Prod.Grp. “HD IceCream” for $3.00 off

Buy 1 Product HD Ice Amount 3.00

Buy 1 prodA for promo price, limit 2

Buy 1 Carton prodB for $3 off

Buy 2 prodC for regular price, get 1 prodC free

Buy for at least $100, get voucher of $5

Project Activity: which offer constructions are needed?

Two types of templates are available in PMR:

Only “posted” templates can only be assigned to offers

Image Image Image

buy Promo Promo Promo

Image Image Image

buy Promo Promo Promo

• Offer has preview to show graphics

• Re-usable (Block) Templates to structure offer preview

• Re-usable (Content) Templates to support diversity and reduce maintenance

Project Activity: which block/content templates are needed?

Forecast expected promotion sales (qty)

Vendor Fund Assignment

Back to Christmas Campaign

Flyer Radio Flyer Web Flyer TV In Store Event

Offer: grouping of articles Event: grouping of offers Campaign: grouping of Events

Back to Christmas Campaign

Flyer Radio Flyer Web Flyer TV In Store Event

Offer Creation & Maintenance

Area (Page) definition

Area (Page) Layout

8 weeks out Flyer Preview & Validation (on screen)

4 weeks out Transcontinental & Printing

Event Header Name: Flyer December’14 Tactic: flyer Campaign: December’14

front bakery meat grocery back

A Page (Area) of a flyer contains 1 or more offers

Marketing usually sets up these (re-usable) Area Templates in advance

Only “posted” Area templates can be assigned to an area (page) of an event

4+6 block 1+2 block 1+11 block

Event specific offer layout

Event Preview print (pdf)

Area Template maintenance

Project Activity: which functionalities are needed?

Purpose Vendor Fund: improve profitability offer

Vendor Fund = Vendor Deal

Vendor Fund Types:

Total / Tiered Amount Scanback

Product & Product Group Assignment

Offer can have multiple VFs assigned

VF can be assigned to multiple Offers

Offer: buy 1 Häagen-Dazs for $4.49 Regular Sales Price: 7.49 / EA

Promotion Sales Price: 4.49 / EA