Trade promotion management

Trade Promotion Management

SAP CRM 2007Overview

© SAP 2007 / Page 2

1. Business Environment2. ISM: TPM Solution Overview3. Current Solution4. Analytics and ROI5. Appendix

Business Environment

Advertising & Consumer Promotions

TPM

Manufacturer

Retailer

Consumer

TPM

What is Trade Promotion Management (TPM)?

Trade promotions are incentives paid by (consumer products) manufacturersto retailers for merchandising support.

Business Environment

The bottom line: Integrated end-to-end process

Increaseefficiency

Increaseeffectiveness

Growing Retailer leverageAccurately plan and manage trade activities, andstreamlined validation process

Proliferation of brands and productsLeverage analytical insights to optimize trade activities.Increase brand presence and maximize profit

6% 5% 4%

4%4% 6%

5%

13%13%

1978

Advertisingand Media

ConsumerPromotion

Source: Donnelly Marketing and Accenture Analysis

TradePromotion

23%22%

15%

Sales Facts and Figures: Marketing Spends

Marketing Spend for CPG Companies: Percent of Sales

1998 2003E

Marketing spendis rising

Trade promotionmanagement(TPM) is morethan 50% ofmarketing spend

Trade spending is increasing because of the relative strength of the retailcustomer base, which is now greater than consumer and advertising combinedHowever, revenues are flatSpending trade funds more wisely is the strategic imperative

?Which programs

provide the greatestvalue?

Which customers perform the best?

How are the funds being spent?

What is the returnon investment?

What is the mosteffective use of the

funds?

What uplift are wegetting?

Basic Questions

Promotional EffectivenessInsights to increase brand presence and profits

Operational EfficiencyIntegrated trade promotion processes

Alignment of brand and accountstrategies

Optimize trade fund allocation

Accurately account for tradeexpenses

Integrated demand planning toreduce out of stock

End-to-end trade promotion process willprovide . . .

Access to downstream data foraccurate planning and forecasting

Visibility and control of all tradeactivities across the enterprise

Align trade activities againststrategic plans and objectives

Analysis and insights into tradefund and activity effectiveness

Make Intelligent fund and trade decisions Reduce wastes and administrative costs

© SAP 2007 / Page 8


ISM: TPM Solution Overview

COMPREHENSIVE

Enable Sales,Marketing, Service

Processes

SIMPLE

High useradoption and

user productivity

FLEXIBLE

Flexibleapplications and

service enablement

CRM Without Compromise!

EASE OF USE INNOVATIONCHOICE

Bra

ndM

anag

emen

t

Cat

egor

yM

anag

emen

t

TPM

&A

ccou

ntM

anag

emen

t

Ret

ail

Exec

utio

n

Integrated Sales and Marketing (ISM)

Consumer BrandManagement

CategoryManagement

Account &Trade

PromotionManagement

RetailExecution Customer

MarketingCategory

Management HQ Planning Account Managers Sales Reps

Plan EventsConsumerInsights

Sell-in andExecute

The FourPs

Analyzeand Budget

CoordinateCalendars

Connect processes from consumer insight to advertising,consumer and trade promotion and in-store execution.

Supporting Processes: Service Management, Analytics

SolutionRichness

Strategic Partner:Nestlé

SAP 3.0 SDP

SAP CRM 5.0

Gained Footprint:Colgate, Maxxium

SAP CRM 4.0

Enterprise SuiteTPM Solution

Early adopters:ConAgra, Wrigley, Heineken…

SAP CRM 5.1/5.2

Usability Release:Sara Lee, Kraft Foods

SAP CRM 2007

“Best of Breed”TPM Solution

Next Generation

2002 2003 2004 2005 2006 2007

SAP TPM over the years

Time

5.1/5.2 TPM-Product Hierarchy Promotion-Pertinent Master Data Changes

2007 TPM-Funds Management-Claims Management-Enhancements

Board /Executive

Marketing

Sales

Logistics

Financials

StrategicTargets

BrandTargets

BrandPlan

MarketingPlan

SalesTargets

InvestmentPlan

TradePromotion

Plan

DemandPlan

SupplyNetwork

Plan

ProductionPlan

Top Down SalesPlan

Bottom Up SalesPlan

Financial StatementPlan

Reconciliation

Consumer Products Business Process

ClaimsManage-

ment

FundsManage-

ment

Drill down of TPM Business Process

Develop Overall Channel and Customer Plans:•Planning Customer

•Total and Target Volume

•Product Categories

•Month

•Profitability

Develop Key Customer/Product Category:•By period, events, terms and conditions

•Agreements

FundsManagement

Trade PromotionPlan:•Long-term

•Short-term

•Tactics

•Objectives

•Templates

ClaimsManagement

BPS

CRM

Inputs•Brand Plan

•Category Plan

•MarketingCalendar

•HistoricalAnalysis

AgreementAcceptanceandPromotionPlan

Applications

TradePromotion

Plan

Top Down Sales Plan

Bottom Up SalesPlan

ClaimsManage-

ment

FundsManage-

ment

1. Headquarter PlanningConsensus PlanSales BudgetingSchedule Creation

Process Overview:

2. Account PlanningPre-analysisEvent PlanningPromotion Planning

3. Sell-in & NegotiationProposal generationDemand planningFlexibility

5. Evaluation &Analysis

KPI ReportingSyndicated DataFunds Tracking

4. Retail Execution,Validation & Settlement

FSR supportInvoicingPayments


Process Overview:







Trade FundsManagement

Budget tracking

Planned, Committed,Accrued


Planned,Committed,Accrued

Budget

TradePromotion

Management

Process Overview:







Finalization

Prepayments

Trade ClaimsManagement

DeductionsInvoicesDirect Payments


Schedule Payments


Customer-Centric Business with SAP CRM 2007

The TPM functionality of SAP CRM 2007

Ensures consistency, effectiveness, and predictability throughout the TPM businessprocess:

Headquarter Planning and BudgetingFunds ManagementAccount Management and Trade Promotion PlanningAccount Sell-in and Promotion Plan ExecutionTrade Claims ManagementAnalytics and ROI

TPM Productivity Enhancements

…

CRM 2007 Takeaway:

Built on existing TPM Platform

Trade Funds Management

Trade Claims Management

TPM Functional Enhancements

… fully integrated intoSAP ERP, front to back!

© SAP 2007 / Page 19


Current Solution

TPM Within SAP CRM 2007

Headquarter Planning and BudgetingFlexible planning from the top down, based on:Marketing and sales planning; including organization, product categories, historical and/orforecast sales figuresConversion of planning strategies into actionBudgeting of funds plans

Trade Funds ManagementA fully integrated funds management solution with the ability to create full budget (funds)capabilitiesTrack funds expenditures against trade promotionsAbility to make prepayments or periodic payments

Account Management and Trade Promotion ManagementThe key to successful customer relationship management, thanks to a complete view of yourbusiness partners and promotional activities

TPM Within SAP CRM 2007

Account Sell-in and Promotion Plan ExecutionField reps armed with correct promotional information and incentives for retailers, to be ableto gain retailer supportA tool supporting field reps in planning their customer validation visitsIntegrated with Demand planning to ensure adequate supply during promotional periods

Trade Claims ManagementInsight into trade promotional spending, with the ability to track claims against tradepromotionsAbility to chargeback or write-offFully integrated with TPM, TFM, and ERP to finalize claims and close promotional accountsupon final settlement

Analytics and ROIComplete overview of past and present promotional performance, simplifying the planningprocess and allowing quick reaction to an ever changing market

© SAP 2007 / Page 22

Current Solution: Headquarter Planning andBudgeting

Headquarter Planning and Budgeting

Funds Management

Account Management and TradePromotion Planning

Account Sell-in and Promotion PlanExecution

Claims and Payments Management


TPM Five Step Process – Headquarter Planning

2. Field Account PlanningPre-analysisEvent PlanningSales Planning






Trade FundsManagement Planned, Committed,

AccruedBudget

TradePromotion

Management


Trade Promotion Plan

Top Down Sales Plan

Bottom Up Sales Plan

Claims Management

Funds Management

Trade Promotion Planning

There are several ways for companies to conduct trade promotion planning:Top-Down Planning or Headquarter PlanningBottom-Up Planning or Account Planning

Top-Down PlanningDone at headquarter level

usually by Marketing orSales Departments

Bottom-Up PlanningDone at account level

usually by SalesDepartment

Headquarter Planning & Budgeting

Plan and communicate Trade Promotion goals and objectives from the executivelevel:

Considered top-down planning

Collaborate brand and sales goals to achieve unified objectives for overall brand strategy

Plan based on historical analytics to help develop marketing strategies and objectives

Organize and allocate overall budgets, or funds, to aid in the strategic budget developmentOverall budgets are organized, many times by territory, to help associate promotional

spending with the trade promotions

Headquarter Planning and Budgeting: Features

Intuitive analytics and historicals to aid with promotional plans

Comprehensive planning toolsDealsMarketing Calendar

Integrated Trade Funds Management to aid with budget planningFunds AllocationFunds Plans

Consistent platform for all parties to approach the planning process


Elements used in Headquarter Planning andBudgeting:

Consensus Planning: Top-down and Bottom-up

Sales Planning: Targets and Budgets

including Trade Funds Plans

Creation of Deal Structure

Calendar paradigm for reviewing, creating editing

© SAP 2007 / Page 29

Current Solution: Trade Funds Management







Process Overview:








Budget tracking

Planned, Committed,Accrued


Planned,Committed,Accrued

Budget

TradePromotion

Management



Top Down Sales Plan


Claims Management

Funds Management


Trade Funds Management (TFM) is a CRM based application that enables you to setup and manage fund programs and funds, thus allowing to plan and track howyou spend your money for trade.

TFM is integrated into:

TPM Trade Promotion Planning

MDF Market Development Fund Initiatives

CRM Claims Management

ERP Financials (CO-PA, Accruals)

APIs to integrate external business planning and forecasting tools

Trade Funds Management Process


Plan, fund and track trade promotion spending:

Multi-dimensional set-up of discretionary budgets with the framework to support performance-based live accruals

Detailed tracking and auditing of all funds transactions

Full budget check capabilities for planning and settlements

Full checkbook capabilities

Full accrual management capabilities

Funds Management Main Features

Multi-dimensional set-up of discretionary budgets with the framework to supportperformance-based live accruals

Definition of fund plansManual set-up and allocation in CRMImport from external planning and forecasting tools like SAP SEM

Detailed tracking and auditing of all funds transactionsSarbanes-Oxley and FASB accounting standard compliantFull visibility into planned, committed, accrued, settled, paid, etc. valuesFund checkbook view for accounts, categories and organization units

Full budget check capabilities for planning and settlements

Full checkbook capabilities

Full financial accrual management capabilitiesThe accrual engine allows detailed bottom-up accrual calculations based on promotions orfund budgets, and triggers them in ECC FI/COAccruals are adjusted during the settlement processAbility to adjust accruals at the end of an event

Fund Overview Page

Fund Attributes section willdynamically show only thoseattributes which are requiredfor the Fund Type selectedabove.

Additional customized key values can be displayed here (Checkbook configuration)

© SAP 2007 / Page 37

Current Solution: Account Management andTrade Promotion Planning


Funds Management




Process Overview:







Finalization

Prepayments




Schedule Payments


Account Management and Trade PromotionPlanning


Top Down Sales Plan


Claims Management

Funds Management

Trade Promotion Planning

There are several ways for companies to conduct trade promotion planning:Top-Down Planning or Headquarter PlanningBottom-Up Planning or Account Planning

Top-Down PlanningDone at headquarter level

usually by Marketing orSales Departments

Bottom-Up PlanningDone at account level

usually by SalesDepartment

Account Management and Trade PromotionPlanning

Plan and communicate Trade Promotion goals and objectives from the account level:

Create the best estimates of financial and activity performances

Create and manage trade promotional activities that are aligned with the plans and funds

Perform promotion simulations analysis and compare various trade plan scenarios anddetermine the best account plans

Automated approval process takes the completed Account and Category level plans back toheadquarters for approval, and upon approval, the plan is routed to the customer foracceptance

Further allocate funds to specific agreements, account plans and category plans to performbottom-up planning for trade spending, promotion volume estimates and non-promotion volumeestimates

Easily initiate fund creation, transfers, and approval processes

Account Management and Trade PromotionPlanning: Features

Intuitive analytics and historicals to aid with promotional plans

Comprehensive planning tools:AgreementsAccount PlansTemplates/ShellsPromotion Simulation

Integrated Trade Funds Management to aid with budget planning:Funds AllocationFunds Plans

Consistent platform for all parties to approach the planning process

Trade Promotion Execution – CRM 2007 UserInterface

Header Area

NavigationArea

QuickCreateArea

Work Area

Role-based Navigation and Screens

Drag&Drop Enabled Config Tool for Screen Design

User Personalization

Trade Promotion Execution – CRM 2007 UserInterface

Working Context Saved Searches

Breadcrumb Navigation

© SAP 2007 / Page 45

Current Solution: Headquarter Planning andBudgeting


Funds Management





Process Overview:







NDA

TradePromotion

Management

Account Sell-in and Promotion Plan Execution


Top Down Sales Plan


Claims Management

Funds Management

Account Sell-in and Promotion Plan Execution

Gain account sell-in and execute trade promotion plans:

Arm Field Sales Reps with historical data and insights into planned promotional activities,aiding in promotion sell-in with retailers

Allow sales reps to capture all orders and requests for collaterals efficiently and ensure theorder information is fed into the demand planning process

Provide Field Sales Reps access to all administrative tools to manage their workload in anefficient and effective manner

Activity Management tools provide Field Sales Representatives the capabilities to manageand maintain the relationship with the customers by helping to plan visits and perform surveys

Account Sell-in and Promotion Plan Execution:Features

Comprehensive planning/execution tools:Trade PromotionsMarketing CalendarCRM Mobile (for store visits)

All promotional activities that need to be planned, tracked, documented, oradministrated by user or user groups:

AppointmentsTasksRetail VisitsE-mails

Fully integrated with:TFM Trade Funds ManagementTCM Trade Claims ManagementAPO Demand Planning

Trade Promotion Planning – AgreementOverview Page

HeaderInformation

Product

Category

Specification DetailedInformation

TradePromotion

Trade Promotion Execution – Fact-Based Sell-in and Validation

A basis for negotiations withcustomers are Tradepromotion information

on a mobile deviceas a hardcopyin reports

© SAP 2007 / Page 52

Current Solution: Claims and PaymentsManagement


Funds Management




Process Overview:







Finalization

Prepayments




Schedule Payments




Top Down Sales Plan


Claims Management

Funds Management


Trade Claims Management (TCM) is a CRM-based application that enablesyou to capture and validate trade related claims and payments at theplace of the right information.

TCM is tightly integrated into:TPM Trade Promotion PlanningTPM Account PlanningMDF Market Development Fund InitiativesCRM Billing EngineERP Financials (CO-PA, FI)ERP SDERP Accounting / FSCM

Trade Claims Management Process

DeterminePromotion based

Payment with AutoResolution

Create TradeClaim

ReceiveDeduction

(Dispute Case)

CollectAdditional Claim

Information

Check ClaimValidity Settle Payment

Update / ActualizeTrade Promotion /Fund Checkbook

Cancel Claim

Receive Invoicefrom Customer/

Partner

Chargeback orWrite-OffAmounts

Carry-overamounts toprevision of

future business

Monitor andAnalyze Financial

Situation andPayments

Correct Claim orSettlement

Match AccountPlan / TradePromotion

ReceiveRequest of

Payment forPerformance

ClearDeduction

(Dispute Case)Update

Dispute Case

Year/ Period EndBonus Payment(Direct Payment)

Resolve andApprove

SettlementClaim

SettlePrepayments

SettlePeriodicpayments

SettlePeriodicPayments

SettlePrepayments

(CSR or CSD)


Allocate, track and validate trade promotion spending:

Efficiently manage disputes according to agreed contracts

Automate the year-end rebate and chargeback processing

Access funds, promotion planning, validation and claims all in one place

Validate retail actual performance to ensure the agreement is being properlyupheld

Integrated Trade Claims capabilities provide complete claims and deductionvalidation, as well as accurate accounting of all expenses to the correct funds

Trade Claims Management: Features

Full deduction management capabilitiesDeduction ClaimsInvoice ClaimsChargebacksWrite-OffsPrepaymentsCorrections

Central repository of claims (invoices, deductions, scheduled payments)

Form–based claim validation

Fully integrated into:TFM Trade Funds ManagementTPM Trade Promotion ManagementERP Financials and Dispute Management

Claim Processing Documents

All objects in context aredisplayed together

claim submission (CSD)claim (CSR)prepaymentcarried-over prepaymentchargeback or write-offcorrection documents

ClaimSubmission

Claim Charge-back

Write-Off

Carried-Over

Prepay-ment

Trade Claims: Header

© SAP 2007 / Page 61


Analytics and ROI

Key Account Manager Dashboard

Promotion Best Practice

© SAP 2007 / Page 64


Appendix

Integrated Overview

Full integration of TPM includes AOP/ Forecast and APO/ Demand Planning

TPM

TFM

TCM

AOP/FORECAST

APO/DEMAND

PLANNING

Baseline

Base

PromotionAttributes

Prelim Funds

PromotedVolume Promoted

Commitments

Promotions

Claims/Settlements Budget

Availability

Planned Trade Spend(event-based)

ForecastedVolume

Periodic TradeSpend Expense

(non event-based)Accruals

Commitments

Funds

Data Flow: Demand Planning Integration

ERP

BI

SCM

Plan/Actual InfoCube

CRM2007

Create and saveTrade Promotion

(Marketing Planner)

Actual InfoCube

uplift

(incrementalsales

volume)

plan data

copy actual data by SEM function(including hierarchy derivation)

Demand Planning

CO-PA

SD

actual databaseline(copy via SEMfunction)

Baseline forecast

Total forecast

baseline(for display)

CRM Consumer Products Solution Map(Customer and Consumer)

MarketingSolution map

Consumer

Account

Trade &Sales

Brand &Category

SalesSolution map

ServiceSolution map

Strategy Planning Evaluation& Budgeting Execution

KPI Planning

Analytics

Web /

e-mail

Partners

Direct

mail

Call

centerFieldsales

Branch/ stores

CustomerSegmentation

FundingAllocation

Bus Strategy& Planning

Terms ofTrade

ConsumerSegmentation

ConsumerInsights

CampaignExecution

CampaignPlanning

InteractiveOffers

TargetSetting (Vol,$)

Pricing &Contracts

SalesPlanning

CategoryManagement

MarketingCalendar

PortfolioManagement

MediaPlanning

CreativeContent

MarketResearch

ResponseRates

Field SalesMonitoring

One view ofFinancials

PromotionEffectiveness

BrandPerformance

Third PartyData

PromotionGuidelines NPDI

VolumePlanning

PromotionSimulation

FundManagement TPM

PortfolioPlanning

Account PlanDevelopment

ObjectiveManagement

VisitPlanning

TerritoryManagement

Channel &Cust. Strategy

MarketingDev Funds

ClaimManagement

FundsCheckbook

DeductionValidation

AccrualsManagement

CustomerManagement Prepayments

Chargebacks

Year EndRebate

Promotionsell in

ExpenseReporting

RetailExecution

OrderManagement

PromotionValidation

Fund Re-Allocation

Complaints& Returns

© SAP 2007 / Page 68

Further information

SAP CRM - Roll-Out Maphttps://portal.wdf.sap.corp/go/crm-rollout-map

SAP CRM - Ramp-Up Knowledge Transfer (RKT)http://service.sap.com/rkt-crm

SAP CRM – Demo Portalhttp://crmportal.wdf.sap.corp:1080

SAP CRM – WiKihttps://wiki.wdf.sap.corp/display/SAPCRMHub/Home

SAP CRM - Help Portalhttp://help.sap.com/crm

SAP Public Webhttp://www.sap.com/crm

https://portal.wdf.sap.corp/go/crm-rollout-map

http://service.sap.com/rkt-crm

http://crmportal.wdf.sap.corp:1080/

https://wiki.wdf.sap.corp/display/SAPCRMHub/Home

http://help.sap.com/crm

http://www.sap.com/crm

© SAP 2007 / Page 69

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Technology

Trade promotion management