SAP_TPM_Overview_Part_1

©SAPAG1SAPTradePromotionManagementRKTWorkshop–TPMOverview(CRM4.0/SEM3.5)TPMCoreConsultingTeam©SAPAG2©SAPAG2003ParticipantsPrerequisites:InterestinTradePromotionManagementExperienceofSAPsystems(CRM/R/3)Preferred:ExperienceofSAPsystems(SEM/BW/APO)KnowledgeofConsumerProductsindustryTargetGroup:ConsultantsPre-SalesConsultants/SolutionEngineersDuration:2days©SAPAG3©SAPAG2003CourseObjectivesAfterthiscourseyouwillbeableto:UnderstandtheBusinessProcessTradePromotionManagementDriversBenefitsTerminology5StepProcessUnderstandTradePromotionManagementusingSAPanduseoftheMarketingCalendarandPlannerwithrespecttoTopDownSalesPlanningPromotionPlanning(pre-evaluation,dealsetc.)OfflinePlanningIntroductioninDemandPlanningSell-inandNegotiationExecution(salesordersandsurveycapture)PostEvaluationUnderstandtheinteractionwithConsumerActivities©SAPAG4©SAPAG2003WorkshopAgendaConsumerActivitiesUnit10DealMasterUnit5PostEvaluationUnit9PromotionPlanningOnlineUnit4Sell-in,ExecutionandValidationUnit8TopDownSalesPlanningUnit3InterfacetoDemandPlanningUnit7TradePromotionManagementUnit2PromotionPlanningOfflineUnit6BusinessProcessUnit1©SAPAG5SAPTradePromotionManagementRKTWorkshop–TPMOverviewUnit1-BusinessProcess(CRM4.0/SEM3.5)TPMCoreConsultingTeam©SAPAG6©SAPAG2003WorkshopAgendaConsumerActivitiesUnit10DealMasterUnit5PostEvaluationUnit9PromotionPlanningOnlineUnit4Sell-in,ExecutionandValidationUnit8TopDownSalesPlanningUnit3InterfacetoDemandPlanningUnit7TradePromotionManagementUnit2PromotionPlanningOfflineUnit6BusinessProcessUnit1©SAPAG7©SAPAG2003UnitContentUnitContent:Unit1-BusinessProcessDriversBenefitTerminology©SAPAG8©SAPAG2003UnitObjectivesUnitObjectives:Unit1-BusinessProcessAfterthisunityouwill…...beabletoexplainthebusinessdriversbehindtheprocess...beabletoexplainthebusinessbenefitsbehindtheprocess©SAPAG9ConsumerProductscompaniesspendlargeamountsonmarketingThelargestlineitemisCostofGoodssold:Theproduction,forexampleofcookies,meanstoproduceindetailorbuy:flavors,andplasticwrap.Productionisoneofthehighestcosts.Tospend25%oftheannualrevenueforMarketingactivitiesisaremarkableamountandthatiswhyCPGcompaniesnowstarttoworkonestablishingameanstohavebettercontrolofwhatthebenefitsareofthisinvestment.©SAPAG2003TypicalCostStructureofaCPGCompany©SAPAG10ThetwomajorgoalsofaCPGcompany’smarketingactivitiesareononehand,toincreasebrandequity,brandawareness,andmarketshare,andontheotherhandsalesvolumeofthemanufacturedproducts.Allmarketingactivitiesareembeddedintoacompany-wide,globalmarketingstrategythatisimplementedusingthreetypesofmarketingevents:TradePromotions,ConsumerPromotionsandMediaCampaigns.WecombineConsumerPromotionsandMediaCampaignswiththeterm‚ConsumerActivities‘.E.g.TVadverts,magazineads,coupondrops,in-storesamplingTradePromotionsarealwaysdirectedthroughtheretailchannel,i.e.throughthetrade.ThesepromotionstaketheformofdiscountsofferedtotheretailerorfeesforplacingthegoodsattheendofanaisleoratthepointofSale(POS)Thisscenariofocusesonthedirectroutetotheretailer.Nowholesalersareincluded.©SAPAG2003ConsumerRetailConsumerActivitiesConsumerPromotionsMediaCampaignsMakeSureYouUnderstandtheDistinction!CP-INDUSTRYMarketingActivitiesTradePromotions©SAPAG11InthelastfifteenyearsTPMhassteadilyincreasedfrom5%to17%(insomemarkets)asthemarketstabilizedandretailersgainedleverage4%arespentonconsumerpromotions:thisamountofmoneyisspent,forexample,oncouponsandsampling.5%oftheannualsalesrevenueisspentonadvertising17%,onaverage,isspentontradepromotions:thiscouldbe,e.g.discounts,buytwopayone,…SomeCPGcompaniesspendsareevenhigher(e.g.bottlerswhoaredoingtheproductionanddistribution)Insomecountriesitis,howeverlower(forexampleinAsia)©SAPAG2003TypicalCostStructureofaCPGCompany©SAPAG12AnEndAisleAFreeStandingDisplay©SAPAG2003ExamplesofPromotions©SAPAG13BusinessBenefitReducedtimeduetoalltheinformationbeingavailableinoneplace©SAPAG2003ImplicationsofInefficientandIneffectiveTPMSolutionsOnly16%ofTradePromotionsAreProfitable191%ofManufacturersFeelTPM$’SAreInefficient285%ofManufacturersFeelTheyAreIneffective281%ofManufacturersFeelTheyGetPoorValue2ManufacturersEstimateThat30%ofTPMDollarsGoStraighttotheRetailers’BottomLine3TPMRelatedActivitiesAccountfor25%-30%ofaSalesperson'sandBrandManager’sTime4Manufacturerswroteoffdeductionsequalto8.5%oftheirrevenuein200051Economist,2ProgressiveGrocer,3AcNielsenSupermarketBusiness,4BuzzelatWharton,5Cannondale2002study©SAPAG14SAPdesigneditssolutioninordertoanswertheabovequestions©SAPAG2003?Whichprogramsprovidethegreatestvalue?Whichcustomersperformthebest?Howarethefundsbeingspent?Whatisthereturnoninvestment?Whatisthemosteffectiveuseofthefunds?Whatupliftarewegetting?TPMBasicQuestions©SAPAG15Disconnectedsolutions,andthereforeenterpriseusersandpartners,resultinanumberofartificial/realchallengesthatmakeconductingthebusinessprocesslessthanoptimal.©SAPAG2003CriticalObstaclesAssociatedwithTPM•CriticalIssueswithTPMLackofvisibilityintotradeprogramsInabilitytocaptureallassociatedcostsInabilitytoanalyzetrueROIMajortradespendingsurprisesMonies“leftontable”forfearofoverspendingDedu