Configuring Pricing Strategies

The pricing process is initiated by the administrator, who:

• Establishes the internal price
• Develops competitive pricing for sales opportunities or quotes
• Applies relevant customer discounts
• Ensures accurate customer pricing

Setting Internal Pricing

Pricing helps you stay competitive by allowing you to easily apply flexible pricing strategy such as targeted discount.

As a prerequisite, the administrator must configure product pricing. They can also manually apply discounts and miscellaneous surcharges to sales processes and overwrite certain pricing elements, which makes pricing more flexible.

Providing Sales Opportunities and Quotes

You can offer competitive pricing to your customers when you work with sales processes such as opportunities and sales quotes.

Applying Customer Discounts

The solution provides internal net pricing, meaning your company can derive pricing from price rates or discounts based on the master pricing data.

Internal pricing uses product pricing such as prices, discounts, surcharges, etc. and is created by the administrator. Depending on the pricing set-up, users can apply various types of discounts to the total value. With pricing configuration, you can:

• Deliver accurate prices to your customers
• Define individual prices for products, customers, and so on, during the sales process

The term pricing refers to the calculation of prices (for external use with customers).

Calculating Customer Pricing

The final price for the customer is determined by several variable factors, including the specific customer, the product selected, the order quantity, and the date of the order.

The information about how each of these factors decide the price can be stored in the system in the form of condition records (pricing record).

If integrated with SAP S/4HANA, SAP Sales Cloud provides an add-on for SAP ERP for pricing integrations. You would have to configure the integration, cloud connector, and replicate the pricing master data.

SAP pricing is determined by calculating many conditions. SAP calls this the condition technique. The condition technique breaks a pricing procedure down condition type by condition type to find the best price. The way the system does this is by an access sequence, or search strategy. Where the system looks for the most specific - most accurate condition, finds it, and then starts looking for the next on the pricing procedure list.

Here is a break down of the pricing components:

• Pricing components form an infrastructure that helps to define master data and to configure the determination of the master data. The master data is called condition records and are persisted in condition tables. To configure the determination, it uses the pricing components pricing procedure, condition type, and access sequence.
• In pricing, master data can be prices, discounts for products or business partners, surcharges, and so on. The system uses this master data to calculate a net value in a sales document.
• The pricing procedure defines the calculation sequence for the net value by specifying the order of condition types and subtotals. Subtotals are intermediate results of the price calculation, such as the sum of discounts.
• The condition type is a representation of a price, a discount, and so on. Condition types control the process from the definition of master data to the net value calculation in a sales document. For most condition types, administrators can define different condition records for a combination of different price relevant attributes and their values.
• To control the search sequence per condition type, you can define an access sequence and assign it to a condition type. In addition, the access sequence defines when the system must stop searching.
• For typical pricing activities, the standard SAP system provides predefined pricing procedures, condition types, and access sequences. In the case of each component, you can use the standard version, copy the standard version and modify it, or create entirely new definitions to suit your own business needs. PPOPP1, Opportunity pricing procedure and PPSTD1, Standard Pricing Procedure have the predefined pricing components.

The administrator configures pricing to calculate net values in the sales processes, such as opportunities and sales quotes.

The elements that are used for pricing in a sales document are called price elements (also, condition types) and they correspond to a price condition or a subtotal of multiple price conditions. The system saves only price conditions and not their subtotals.

You can set default values for price conditions by defining as many condition records as you want for the different condition types. You typically define a new condition type to fulfill a specific purpose. For example, a special price or discount.

Pricing Configuration

If the pricing configuration components that SAP delivers with the standard system are not sufficient for the business needs, you will need to create your own pricing components by utilizing the Administrative Console and Pricing Configuration found in All Settings tab.

And then access the Pricing Configuration settings:

In order to work with pricing configurations, the following prerequisites apply:

• You have created a business role for the admin that can access Settings.
• You have added the sap.crm.service.pricingMasterDataService business service to the business role.
• You have enabled the sap.crm.pricingmasterdataservice.uiapp.pricingMasterData app and the sap.crm.pricingmasterdataservice.uiapp.pricingMasterDataAdmin app for the business role.

For typical pricing activities, the standard SAP system provides 2 predefined pricing procedures, many condition types, and many access sequences. In the case of each component, administrators can use the standard versions, copy the standard versions and modify them, or create entirely new definitions to suit business needs and requirements.

Two standard delivered pricing procedures:

• PPOPP1, Opportunity Pricing Procedure
• PPSTD1, Standard Pricing Procedure

Each pricing procedure can be highlighted to show the steps of it's condition technique. The system will start at the top step and work it's way down, condition type by condition type, until it subtotals values and amounts. You can also see the manual flag, if this flag is set, a business user can manually assign or change the condition during pricing. If this flag is set to off, a business user could not change the value of that condition.

Choosing the "money bag" icon under Actions will navigate the administrator to the next tab, Condition Type.

The condition type is a representation of a price, a discount, and so on. Condition types control the process from the definition of master data to the net value calculation in a sales document. For most condition types, administrators can define different condition records for a combination of different price relevant attributes and their values.

Characteristics of Condition Types

There are four characteristics of Condition Types:

1. Classification: The condition class is the category of condition. For example: Price, Discount, or Surcharge.
2. Validity: period Every condition requires a validity period, even if it is the SAP standard end of life, 12/31/9999. Only valid conditions are searched in the system during pricing procedure calculation.
3. Scales: Quantity, Gross Weight, or Net Weight based scales can be added to conditions. For example: 1 Mountain Bike is $350 each. But if we quote 10 Mountain Bikes to a specific customer, we could set the scale so that they would now be $325, and if we quoted 50 or more Mountain Bikes to the same customer, we could set a scale to set the price at $300 each.
4. Level: Will the pricing condition be applied at the header level (entire document) or item level (just for one product line item)? For example, a header discount of 10% on a sales quote would be 10% off the entire quote. But 10% off of one item in the quote would only apply to the quantity of just that line item of materials. So the totals could be quite different.

An access sequence can be assigned to a condition type (except for condition types that are configured as a header condition).​ Every access in an access sequence is defined by using a condition table. A condition table is a combination of fields that form the key for a condition record.

• If an access sequence contains more than one access, the accesses are usually arranged from specific to general in descending order.
• The access sequence defines the order in which the system searches for data as well as the technical source (condition table) that is searched.
• The access sequence consists of one or more accesses. Their sequence establishes which condition records have priority over others.
• The accesses tell the system in which table to look first, second, and so on, until it finds a valid condition record. You can configure whether the system shall only find one valid condition record or several valid condition records.
• In Pricing Configuration, you specify an access sequence for each condition type for which you create condition records. You can use the same access sequence for more than one condition type.
• A condition type can only have one access sequence assigned.
• The standard version of the system contains access sequences that are predefined for each of the standard condition types.
• As a best practice, the names of the access sequences often correspond to the condition types for which they are intended.

An administrator can create condition tables to specify the fields and use the combination of which is used to create condition records. Customer specific condition tables enable storage and retrieval of condition records for a new condition type.​ The master data records of pricing are called condition records and are persisted in condition tables.

A condition table defines the key fields that are used for a condition record. Each line or access in an access sequence references a condition table.

A condition table defines the combination of fields that specifies the validity of an individual condition record.

• The validity is characterized by a validity start date and end date, a condition type, price relevant attributes (such as price rate, currency, UoM), and sales document relevant attributes (such as business partner, product, and so on).
• Technically, all these fields are key fields for the corresponding condition table.
• If you create a condition record, the system saves the validity information in the corresponding condition table.

So essentially, the system reads the condition type and it's access sequence.

• The sequence of condition tables represents the search strategy for finding the relevant condition record. It is the combination of fields that become a key to unlock the condition record.
• If those fields match, the key fits and the condition is copied into the sales document, if the fields don't match, the key does not fit and the next access is searched or the condition type is skipped because of no condition record found.

Each condition table represents one access, which can be used to create a condition record by using the specified key.

The administrator can define their own condition tables using Pricing Configurations on the Administrative Console.

When changing the Internal Pricing schema in SAP Sales Cloud, there are 4 pricing components that can be created.

Pricing Components include:

1. Condition table
2. Access sequence
3. Condition type
4. Pricing procedure

All pricing data provided standard by the system can be copied, but not edited.

Administrators can create condition tables to specify fields. The combination of those fields is used to create condition records. Your own condition tables enable you to store and retrieve condition records for a new condition type. SAP recommends to copy an existing condition table and modify it according to your requirements.

• A condition table defines the combination of fields that specifies the validity of an individual condition record.
• The validity is characterized by a validity start date and end date, a condition type, price relevant attributes (such as price rate, currency, UoM), and sales document relevant attributes (such as business partner, product, and so on).
• Technically, all these fields are key fields for the corresponding condition table. If you create a condition record, the system saves the validity information in the corresponding condition table.
• In Pricing Configuration, you can define your own condition tables.

Selecting Fields for a Condition Table

Selected field categories can be added to a condition table to allow the system to search for specific selected fields in order to determine a customer discount.

For instance, when Buyer and Sales Organization are selected then the system will look at who the buyer is AND which is the sales organization of the buyer.

As an SAP best practice, it is recommended to create your own access sequence by copying a similar access sequence and modifying it according to your needs. You can easily copy a similar access sequence to modify by selecting the copy icon in the upper right corner.

For example, when 7DS0 Overall Customer Discount access sequence is selected and then copied. This information will be copied over and modified as needed instead of manually inputting all the same data.

Naming Access Sequences

When naming the access sequence, SAP recommends to name it the same name as the condition type it will be associated with.

For example, you can see from the previous screen that the access sequence's ID is the same as the condition table.

Understanding Access Sequences

An access sequence is only required for the corresponding condition type, and the condition amount is determined based on condition records.

• Condition types for which you always enter the condition amount manually (header discounts, for example) do not require an access sequence.
• The access sequence defines the order in which the system searches for data as well as the technical source (condition table) that is searched.
• The access sequence consists of one or more accesses.
• Their sequence establishes which condition records have priority over others.
• The accesses tell the system in which table to look first, second, and so on, until it finds a valid condition record.
• You can configure whether the system should only find one valid condition record or several valid condition records.
• In Pricing Configuration, you specify an access sequence for each condition type for which you create condition records.
• You can use the same access sequence for more than one condition type. Since this is a search strategy, it is important to set up the sequence of accesses from the most specific case at the beginning to the most generic case at the end. Once the system finds a condition table that meets the search criteria, it stops the search and returns that condition's amount.
• The standard version of the system contains access sequences that are predefined for each of the standard condition types. The names of the access sequences often correspond to the condition types for which they are intended.

Similarly to copying access sequences, SAP recommends creating a new pricing procedures by copying a similar pricing procedure and modifying it according to your new requirements.

Creating Pricing Procedures

Pricing Procedure modifications can be done by:

1. Adding additional condition types or subtotals
2. Deleting rows you do not need

The main function of a pricing procedure is to define the list of condition types and subtotals that are to be used in a specific business context. Price elements in a sales document can be price conditions or subtotals. A row in a pricing procedure defines the way such a price element is calculated in a sales document.

Furthermore, a pricing procedure establishes the sequence in which the condition types contribute to the net price calculation.

The pricing procedure also establishes the following:

• Subtotals that are calculated during pricing and displayed in a sales document.
• Whether a document condition is determined automatically or added manually, either by a user or by an external process.
• The base that the system uses to calculate percentage discounts and surcharges.
• Whether the price element is printed on item level as total of all items or not at all.
• Whether a condition is mandatory when the system carries out pricing using the pricing procedure.

The standard system contains predefined pricing procedures that contain frequently used condition types, along with their corresponding access sequences. You cannot modify these predefined pricing procedures. You can create your own procedures from scratch.

Pricing procedure determination is based on sales area and document type.

You must ensure that the condition types and subtotals that refer to calculation results of other condition types or subtotals must have a higher number in the pricing procedure than the condition types or subtotals they refer to.

A condition type is a representation in the system of some aspect of your daily pricing activities.

For example, you can define a different condition type for each kind of price, discount, or surcharge that occurs in your business transactions.

The standard system includes predefined condition types. You can view the predefined condition types in Pricing Configuration. You can also create condition types that better suit the needs of your own organization in Pricing Configuration.

Condition Types Control the Following in the System

Calculation of the price condition of a condition type in a business document, which includes the following:

• Determination of a condition amount from condition record in pricing
• Calculation of condition value from condition amount
• Quantity conversions
• Determination of pricing date

Whether the calculation of a condition value is based on all items of the sales document or separately for each item.

Various changes that the users can perform on a price condition in a sales document.

Automatic correction of the sign for the condition amount of a condition record or of a price condition in a sales document. The system performs the automatic correction in case only a positive sign or only a negative sign is allowed.

Creation of master data for a specific condition type. Specifically, condition types control the following:

• Default values for validity dates
• Default values for calculation type

Reusing master data of another condition type.

Processing of scales during master data maintenance or during pricing.

You can access the Determination Rules for Pricing from the Settings.

When using Determination Rules, you can decide the right pricing procedure for your sales documents.

Prices and price determination can be different for different sales organizations, distribution channels, or divisions. To ensure that the right price is determined for the respective sales area, you can assign different pricing procedures to them.

• The example above shows the Best Run Business Sales Organization and Direct Sales Distribution Channel will use the NEW pricing procedure, regardless of the product Division.
• The example also shows the NEW Pricing Procedure with the NEW access sequence matched with the NEW condition type and table will only be used when pricing the NEW sales opportunity.

During pricing for a sales document, the SAP system automatically determines the pricing procedure valid for the respective sales process and sales area.

Upload Pricing Components

From the general Settings, you can access the Upload Pricing Components feature.

As an administrator, you have the ability to:

• Upload pricing configurations from external SAP systems to SAP Sales Cloud Version 2.
• Replicate pricing master data from SAP S/4HANA.

To use the price components and descriptions of the sales orders you replicated from an external system, you must map the fields and define determination rules for them.

In the Field Mappings tab, upload the pricing procedure downloaded from SAP S/4HANA or SAP S/4HANA Cloud Private Edition:

In the Upload External Data tab, select the spreadsheet with pricing components from SAP S/4HANA or SAP S/4HANA Cloud Private Edition:

In the Maintain Determination Rules tab, define the rules to be used:

Native pricing can be enabled for the document type of a sales document with the maintenance mode Internal & External. For such sales documents, the price is estimated based on the uploaded pricing configurations and the replicated pricing master data.

You can access data related to external pricing configuration upload operations, including both Field Mappings and Upload Logs.