Promotional Planning in DP.

[Former Member]

Hi all,

Can anyone please explain me what exactly is Promotional planning, LIfe cycle Management ??

if you got some notes or like on that, please try to provide it to me. . .

Thanks a lot,

Prasad.

[Former Member]

Hi Prasad,

Below is the detailed outline on promotional planning.

The major challenge in designing an effective Demand Management process is incorporating promotional lift and volume information into the forecast. The first challenge is to lay the correct information channel between field sales into the forecasting group so every change to the promotional plan is captured immediately. In most cases, this can be thought of a 50% win in process design.

In practice, the following challenges are very common in the promotional planning process for a typical manufacturer:

1. Often there could be communication gaps between the manufacturer and the customer on changes at retail. This could more often be due to the lack of proper communication between the manufacturer's account team and the head quarters forecasting team.

2. There is no easy apparatus to incorporate and communicate changes to the promotional calendar. This is the major theme of more advanced Customer Relationship Management (CRM) software. But the key is for the information to be integrated into the demandplanning process/tool.

3. The Baseline Sales Volume is often difficult to estimate. This is further complicated by the fact that there is not a single consistent definition of baseline versus lift within the organization.

CPFR and Collaborative-ABF have attempted to address the issue of promotional planning. It is important design the collaborative meetings to start with a discussion of major changes in promotional events compared to what was used in the forecast in the previous period. Once both parties are in the same page about the promotional grid, then attention should be paid to agreeing on the correct lift for the promotional events.

In summary, Promotional planning involves the following two steps:

1. Review the latest Promotional Calendar to understand changes to key promotional plans.

2. Incorporate incremental volume changes in response to the changes identified from the promotional grid.

Promotional Planning can be mapped in SAP-APO Tool. The following are the transactions used to control promotional planning

/SAPAPO/MP34 - Promotion Planning

/SAPAPO/CLPIPCAL - Collaborative Promotion Planning

/SAPAPO/MP42 - Promotion Management

/SAPAPO/MP41B - Promotion Reports

/SAPAPO/MP31 - Maintain Promotion Attribute Types

/SAPAPO/MP33 - Maintain Promotion Key Figures

/SAPAPO/MP40 - Maintain Promotion Base

/SAPAPO/MP41A - Maintain Settings for Reporting

Regards

R. Senthil Mareeswaran.

[Former Member]

Depending upon the industry you are in, the products/service you make or sell, and the customers you sell to, promotions may be a large part of doing business. In order to obtain a better demand plan, it is better to break historical data down into various key figures. One piece would be unsolicited demand the other piece would be the demand that was attributed to some activity in which your organization

participated. By separating your normal demand history and your promotional activities you may find that your statistical models are more accurate. This may be true due to the fact that your activities are not exactly the same for every period of time or during certain seasons.

1.You can compare forecasts that have promotions with the forecasts that do not have promotions.

2.You can correct the sales history by subtracting past promotions from it to obtain non-promoted historical data for the baseline forecast.

3. The processes of baseline forecasting and promotion planning can be kept completely separate. For example, the sales department can forecast future sales orders, whereas planning one-off events in promotion planning is a task for the marketing department

A product's lifecycle consists of different phases: launch, growth, maturity, and discontinuation. In this process, you model the launch, growth and discontinuation phases.

SAP provides several tools with which you can model a productu2019s lifecycle in Demand Planning. These functions apply equally well to other characteristics. For instance, if you are introducing an existing product into another location, you can use like profiles to use the historical data from the current locations to create a forecast and then use a phase-in profile to reduce the forecast for the introductory period

For more information please go through [Lifecycle Planing and Promotional Planning|http://help.sap.com/saphelp_scm50/helpdata/en/8f/9d6937089c2556e10000009b38f889/frameset.htm] here.

[Former Member]

Hey Hi Sai.

Thanks for ur valuable inputs. . . .

i have got a quick overlook of the concept now, however can u please also let mw know, how can i part these demands, i mean the correct procedure as well as with which tool !

Thanks in Advance,

Prasad.

[Former Member]

Prior to creating a promotion, there are parameters that you have to setup:

1. Maintaining A Promotional Key Figure

2. Maintain Promotion Base

3. Maintain Cannibalization Group

4. Maintain Promotion Attribute Types

When creating a promotion in Demand Planning users will specify what Characteristic Value Combinations (CVCs) are affected by each promotion. You can assign one or more characteristics and values to each promotion. However, for each Planning Area, users must specify what is the lowest level of characteristics that is valid for a particular key figure. For each planning are you must specify the promotional key figure as well as the lowest level of detail for this promotions. This means that when

assigning CVCs to a promotion, the characteristic assigned to the object must match the last drill down.

Using a promotion base for planning promotions makes it easier to identify the effects of individual promotions.Each promotion base contains at least one characteristic, the promotion level. You must have defined a promotion level for a planning area, before you can define a promotion base for this planning area. You create and edit promotion bases in a separate transaction.When you create a new promotion in the relevant planning area, you can then assign it to a promotion base. The system

automatically loads the relevant settings from the promotion base

You create a cannibalization group in the promotion planning settings (Maintain Cannibalization Groups), and specify the cannibalization group when creating a promotion for a product (Check Cannibal Group). Promotions for other products in the cannibalization group are automatically calculated.

For example, you plan a 5% price reduction on liter bottles of Head & Shoulders shampoo, which will cause a 30% increase in sales. Conversely, the sales of 250 ml bottles will go down by 3%, and the sales of 500 ml bottles by 5%.You create a cannibalization group for this.

You define Promotional attributes during the promotion planning process, whether it is in the planning stage, or the post-evaluation stage, planners may be required to group together promotions.

When creating promotions you will have the opportunity to put specific information in that will allow, marketing or the customer to better evaluation the plan like any discount on a specific product.

Promotions are displayed in the Promotion key figure in interactive planning.There are several methods to measure the impact of a promotion in the past and to estimate the impact of a similar promotion in the future.To generate more exact forecasts, the impact of one-time promotions or delivery problems needs to be removed from the actual data. The adjustments are normally made in the Corrected history key figure, rather than the original key figure.

You can forecast future demand using the corrected history minus promotions. In a univariate forecast profile, a promotion value and a processing method can be chosen

[Former Member]

Hi all,

thanks for ur valuable responses.

Please do me one more favour, please also let me know how can i use this tool, i mean how do i need to configure my settings, what data should i feed into.

we havent ever used this tool before, n hence i am looking forward for the change. Every minute input provided from you would be grateful.

Awaiting for ur inputs.

Thanks in advance,

Prasad.

[former_member22474]

Dear Prasad,

To create a life cycle planning

1) Define basic setting ( Select characteristics you want to use) ( Create MPOS and Planning area with appropriate keyfigures)

2. Define like profiles and phase in and phase out profile (/SAPAPO/MSDP_FCST1)

3. Assign profiles to CVC combination

4. Set material forecast indicator in forecast profile

5. Run forecast with the basic settings or for the characteristics

Also please refer the following notes in the service market place;

1319579 1 100 Add-on for simplified master data maint. of DP lifecycle

832393 62 100 Release Restrictions for SCM 5.0

I hope this helps.

Regards,

Rakesh