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1)Trade promotions are incentives paid by (consumer packaged products) manufacturersto retailers for merchandising support. They are used as a method to increaserevenue. That means Trade Promotion Management deals with offering special dea

lsto customers (retailers) for specific products for a specific timeframe to ach

ieveincremental volume.

a)The manufacturers offer various forms ofvalue in return for retailer promises and actions in hopes of generating incrementalvolume and profit.

b)It is importantto distinguish that these investments occur at two levels within a retail organization as shown in the middle column: at corporate level where the retailers commit themselves to the promotions and at outlet level where the promotions are executed and available to theconsumers.

c)cannibalization and pantry loading reduce theeffectiveness of the money invested.

The term cannibalization refers to the fact that sometimes when aproduct is promoted, it decreases another products sales; this could be a competitorproduct but in some cases also an own product

The term pantry loading refers to theretailers practice to overstock their inventoryto take full advantage of the promotional discount.

TPM Key Trends and Challenges

First, retailers themselves are becoming increasingly demanding, fully expecting

that consumer goods manufacturers present promotion programs that are tightlyintegrated with consumer marketing campaigns and tailored specifically to theretailers individual needs and to the needs of their shoppers.

Promotion activity, the traditional focus of the sales organization, has alsobecome increasingly complex. In order to be effective, salespeople need todemonstrate that sales promotions drive both top-line and bottom-line growth forthe products they sell and the categories they serve, and all at acceptable costs.

And finally, sales people are increasingly called upon to move beyond simplyrelationship managers and become general managers, bringing to bear the fullcapabilities and resources of their organization to serve the needs of their retailcustomers.

ExampleBiggest Business problem Related to Tpm



=)80%of companies surveyed rated Improving promotion effectiveness as one of theirtop

three business problems related to the trade promotion process. =)About half of the respondents feel that they need to improve their sales forecasting.

=)Not being able to accurately predict the effects of their promotions is a problemthat also 41% of the companies surveyed mentioned.

=)41% want better visibility into their spends and deductions.

=)one third feels that they need to make better use of their demand data.

=)Reducing spending is rated a big problem by also one third of all respondents.

=) 18% feel that reconciling deductions is not handled well in their company.

Trade Claims Management=====================ExampleAfter the promotion has been executed payment of the promotional spends needs to

bemanaged.claim analysts or key account managers need to validate the claim and allocate the cost to the promotionalactivity.

Trade Claims Management (TCM) starts off during the Field Account Planningand Sell-in and Negotiation processes.

Key Definitions and Key Capabilities---------------------------------==Trade Claims Management allows organizations to allocate, track andvalidate trade promotion spending

Track and validate trade promotion spending.=======================Efficiently manage disputes according to agreed constracts.Automate the year-end redate and chargeback processing.Acces fund,promotion planning,validation,and clamin all at one place.valiadate retailactual performance to ensure the agreement is beging properly uphelp.integrated trade claims capabilities provide complete claims and deduction validation,as well as accurate accounting of all expenses.

Trade Claims Management - Key Capabilities---------------------------------------

Integrated trade claims management capabilities provide complete claims anddeduction validation, as well as accurate accounting of all expenses to the correctfunds.

Trade Claims Management Features and Integration=============================================All trade payments and reimbursements are processed through TCM. There areseveral SAP CRM objecst available to support this process like Deduction and Invoice



Claim, Chargeback, Write-Off, Prepayments and Corrections.

Trade Claims Management also serves as a central repository and is integrated withSAP SEM (Strategic Enterprise Management) to support form based claim validation.

The main benefit of TCM is its tight integration with other SAP modules along withSAP ERP.Trade Funds ManagementTrade Promotion ManagementSAP CRM Settlements and SAP ERP FinancialsFSCM-Dispute Management (FSCM - Financial SupplyChain Management)

Claim Types Overview-419================deduction -Deduction Claims allow customers to claim the amount spent implementing atrade promotion from the manufacturer. The customer does so by not paying thewhole amount of a manufacturers invoice.

invoice -is an invoice request from customer to receive reimbursement for the plannedor excuted trade performance.

direct payment-is a onetime

configuration======================Trade Claims Management is a highly integrative process, the configuration isvery complex. One of the major complexities are the interfaces to other SAP systemslike SAP ERP and SAP BW.

step 1==========customizing of the different transaction types which are required for thetrade claims management process are explained.

Steps 2 and 3==========describe the necessary settings for the approval and validation of the claim documents.Once a claim iscreated and reaches a specific status in processing, the funds determination finds andassigns the relevant fund for the created claim.

The Availability Control mechanism



checks if enough budget is available within the Fund to process the claim.

Steps 4==========explains the relevant settings for the funds determination and the AVC check.

Steps 5==============settings for the integration to dispute management are described.

A transaction type controls how a specificbusiness transaction is processed and can be used.

Examples for transaction types are: Invoice Claim Deduction Claim Claim Submission Fund Funds Plan

A transaction type is assigned to one or more business transaction categories.e.g. service, sales, activity).

step1***********************Define Transaction Types=======================

1. Define Transaction Types

one specifies the description of the transaction type as well asimportant control attributes

such-leading business transaction category,text determination procedure, partner determination procedure, status profile,

organizational data profile, and number range assignment

2. Assign Business Transaction Category A transaction type can be assigned to one or more business transactioncategories.

Only certain combinations of business transaction categories areallowed.

3. Customizing at Header Level

For each of the business transaction categories assigned, customizing settings forthe header level of the transaction have to be done.

Various settings can be made here, depending on the business transactioncategory, e.g. validation sheet integration, prepayment integration, claimsubmission integration, approval procedure etc.



Approval (Step 2)*************************Define Approver Groups and Thresholds

Customer Relationship Management ?Claims Management ? Approvals ? Define Approver Groups and Thresholds

The system checks if the user has sufficient rights to approve a budget posting,prepayment, deduction claim or an invoice claim. This is known as the thresholdcheck.

This check is performed when the user tries to set the status Approved at headeror item level in the budget posting, prepayment or claim.

The Clerk can approve claims up to $1,000.00 but only Supervisors can approveclaims above that up to the amount of $100,000,000.00.

As part of the threshold check, the system also checks if a budget posting, prepayment,

a deduction claim or an invoice claim can be approved automatically, depending onthe user's approval rights. This check is performed when the user saves a documentwith status To Be Approved at header or item level.

Prerequisite to activate this function is that the following indicators within thetransaction type customizing have been set in the step above: Approval Procedure for transaction types that have been assigned to the claimstransaction category Claim.

Multi-Stage Approval for transaction types that have been assigned to thetransaction category Budget Posting.

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