SAP Trade Promotion Management

What is Trade Promotion Management?

Trade Promotion Management (TPM) is focused on strategizing which promotional events have the greatest customer return on the invested marketing dollars. To determine this, companies must capture the expected promotional events, their costs, and the anticipated uplift.

Manufacturers and retailers require real-time visibility into their trade promotion landscape and adjust supply and demand parameters as business scenarios change. Through trade promotion, companies can expand their market share of specific products, better compete against competitors, and increase their retail partners.

With the use of technology, companies can optimize their trade promotion management by:

• Improving sales planning and budgeting
• Optimizing customer business planning
• Strengthening promotional planning
• Supporting execution and settlement

Key Considerations for SAPinsiders

What is Trade Promotion Management?

Trade Promotion Management (TPM) is focused on strategizing which promotional events have the greatest customer return on the invested marketing dollars. To determine this, companies must capture the expected promotional events, their costs, and the anticipated uplift.

Manufacturers and retailers require real-time visibility into their trade promotion landscape and adjust supply and demand parameters as business scenarios change. Through trade promotion, companies can expand their market share of specific products, better compete against competitors, and increase their retail partners.

With the use of technology, companies can optimize their trade promotion management by:

• Improving sales planning and budgeting
• Optimizing customer business planning
• Strengthening promotional planning
• Supporting execution and settlement

Key Considerations for SAPinsiders

• Improve effectiveness of trade dollars and supply chain by linking products in orders to specific promotions. According to Michael Debevec, President of Debevec Consulting, Inc., companies using TPM assign attributes to promotional spending that help them analyze actual results and compare the actuals to the original plans. “You assign each promotional event an identifier that you link to a new type of condition record, a campaign determination record,” he writes. “During order processing, you use the combination of customer, product, and date to determine if an active promotion is available. If one is available, the system stores the promotion identifier with the sales order line item.” Read the full article to learn more about the SAP TPM landscape and key system components.
• Avoid supplier stockouts by integrating trade promotion management with demand management planning. Planning a trade promotion with a retailer means ensuring product is available to meet expected demand. Not doing so leads to customer dissatisfaction and impacts to brand reputation and future sales. Manoj Ambardekar, an SAP subject matter expert with more than 20 years of IT and manufacturing experience, says to avoid stockouts, you need to determine the promotion uplift — the expected increase in demand beyond the baseline forecast. Doing so provides the total demand for a promotion. “TPM helps managers create a trade planning structure and gain visibility into trade promotions. Managers can identify the most profitable customers, fastest-moving product groups, and most effective types of promotions (e.g., end-of-aisle displays or front-page ads),” he writes. Read the full article to learn the configuration steps of a business scenario for a trade promotion.