Performing Promotion Planning and Subsequent Processing


After completing this lesson, you will be able to:

  • Perform Promotion Planning and Subsequent Processing
  • Name the most important functions of the allocation table

SAP Promotion Management

The retail-specific SAP Promotion Management (SAP PMR) application offers complete support for planning promotions, forecasting their performance, and creating a closed-loop promotions process by integrating with execution systems; SAP PMR is a consuming app on the SAP Customer Activity Repository platform. Modeling and analysis functionality allows you to assess individual offers as well as larger promotions. The software helps you make personal appeals to customers through multiple sales channels, improve service levels, and work effectively with your supply chain partners.

An event is a retail activity designed to promote one or more offers during a specific time period using a specific advertising medium across a defined set of locations. An example of this could be a printed flyer, or a group of in-store displays.

A campaign is a grouping of retail events designed to target the promotion of specific offers throughout a specific period of time. For example, a "Back-to-School" campaign could be associated with 50 events, leveraging TV, Radio, and Web media. The grouping is valuable as a mechanism for reporting on aggregated sales figures across events.

You create offers to promote your products in a retail event. The offer specifies the conditions (such as price, discount) for an article, a group of articles, or a category, along with descriptive promotional text, and the tactics like "save x amount". Offers can be grouped into areas. An example of this is an offer that could be created for one specific article, which appears on a specific page (area) of a printed flyer (event).

Vendors provide retailers with additional financial incentives to promote the vendor's products. These vendor funds give vendors greater penetration into new market areas, boost consumer awareness of new products, and increase a retailer’s store traffic and sales volume. You can choose from five different types of vendor funds - for example, lump sum or scan back.

  • What: Which event should be created - for example, a newspaper ad or a web campaign

  • Where: Which stores will participate?

  • When: Define the promotion period

  • How: For each event, one tactic can be chosen - for example, a weekly flyer

The event layout in the PMR system provides a preview of the event - for example, it could be a whole flyer or a flyer page. For one offer, several tactics could be chosen - for example, the article should be promoted in both a local flyer and the web. The offer layout in the PMR system provides a preview of the offer, which comprises for example the article’s picture along with the condition, and further descriptive text. In a local flyer event, a concrete offer is a section on one of the flyer’s pages. Offer templates are used for recurring offer types as in weekly flyers (for example, a "save x amount" offer on the first page, special price, or discount offers).

Promotion Creation in SAP Retail

Promotions in SAP Retail can be created from SAP Promotion Management through the interface, but also planned and executed within SAP Retail. This process starts with creating a promotion in SAP Retail, using the Create / Maintain Promotion functions, and is going to cover the promotion execution using Merchandise Distribution functions.

Promotions can be created for many reasons, and they are an important part of the regular business of retailers. For example, promotions can be used to execute brand vendor initiated offers, or to celebrate a retailer's anniversary, or to sell off excess stock, and so on.

Optionally, promotions can be defined as higher-level promotions, or assigned to a higher-level promotion, for planning and evaluation purposes. A higher-level promotion is used to group the operational promotions assigned to it according to logical criteria. Promotion processing itself is performed by the operational promotions, that is, subsequent processing does not take place for higher-level promotions.

Quantity planning within the promotion planning process allows you to specify a planned sales quantity for each article for evaluation purposes. You can also plan allocation quantities for supplying the participating sites with promotional merchandise.

When you assign site groups, you can choose whether to assign site groups from the classification system or promotion-specific site groups. The latter can only be created and used within that specific promotion. By contrast, site groups from the classification system can be used in any promotion. You can also convert site groups from the classification system to local site groups within a promotion to make adjustments, and you can check if sites occur more than once in the site groups assigned to a promotion.

You can create various promotion conditions. Promotion sales prices can be maintained for a distribution chain, for a price list, or on site level, as in regular retail pricing. Besides promotion sales prices, these are percentage or absolute discounts at various predefined levels. Free goods conditions are another option. For use at point-of-sale transactions, also bonus buys with or without coupon assignments, can be defined. Bonus buys are complex conditions which are valid under certain prerequisites and requirements, and are set up for a group of articles or individual articles.

You use the promotion type to specify promotions from a technical perspective. It describes specific characteristics of the promotion and controls subsequent processing by means of default settings and indicators.

The following default data are specified for the promotion header. Lead times are defined in number of days before the promotion start date, and follow-up times are defined in number of days after the promotion end date:

  • Lead- and follow-up time for purchasing conditions

  • Number of lead days for promotion announcement

  • Lead- and follow-up time for article listing

  • Lead days for goods receipt at store

  • Allocation table type to control default for allocation table item category

  • Application, schema, and announcement category to control output determination

  • Condition type group for purchasing

  • Condition type group for sales

You can define different validity periods for different store groups participating in the promotion. For example, a promotion for swimwear might begin earlier and run for a longer period in stores located in warm regions, than in stores located in cooler regions. If you define different validity periods for different store groups, the system regards the entire promotion period as the period from the earliest start date to the latest end date for all participating stores.

Alternatively, promotions can also be created using the Price Planning Workbench (PPW), which is a work environment in SAP Retail to process manual price changes, and to plan and create promotions. The regular sales price calculation functions are integrated in the PPW. The PPW also displays the stock quantities that are going to be affected by your price changes. When you create a promotion from the PPW, you can maintain promotion sales prices for several site price lists, not just one. The post-processing options for a promotion created using the PPW also allows you to change various factors of the promotion, even when it is already in execution. For example, you can remove (deactivate) articles from the promotion, or extend, or shorten the validity period of the promotion prices.

Subsequent Processing for Promotions

In order to actually execute a planned promotion, no matter if it was created via interface from SAP Promotion Management, or if planned manually in SAP Retail, you perform the subsequent processing steps. These steps are either executed online, or by scheduling the corresponding reports for background processing. The available subsequent processing steps are executing listing, performing supply source determination, generating an allocation table, executing price activation, and creating the announcement message, as well as assigning additionals. Not all steps necessarily have to be executed for each promotion. For example, if all the promotion articles are already listed in all the participating sites, additional promotion listing is not necessary. Furthermore, assigning additionals is not mandatory. However, if planned promotion prices should become valid, price activation is necessary to create the condition records accordingly. In addition, supply source determination is necessary for both price activation and allocation table generation - if an allocation table is planned for procuring and distributing promotional merchandise. This is not mandatory, for example, a retail promotion could also be executed to sell off already existing stock in the stores. An announcement can be created for a promotion, but also for an allocation table.

With the SAP Fiori app, Retail Promotion, you can access promotion data and context information easily and efficiently. The app displays all relevant information about a promotion in one place and enables you to navigate directly to related business objects. For example, the app also displays the allocation table number, as well as its follow-on documents.

You can have the system generate an allocation table in subsequent processing for a promotion.

An allocation table is a tool used by the head office to plan, control, and monitor supplies to sites (stores, distribution centers). For example, it is used for the initial procurement and distribution of articles, for distribution of promotional goods, distribution of stocks, and distribution of imported goods procured centrally. Therefore, the allocation table is a standalone SAP Retail purchasing function, which is also embedded in Retail promotion planning and subsequent processing. When allocation tables are created in purchasing, that is, without being linked to a retail promotion, it is also possible to assign customer groups. In this case, the relevant follow-on document to supply customers is a sales order.

You can control the article quantity distribution to the sites in promotion planning by specifying a minimum order quantity, or by defining allocation table data. Here, you can use an allocation rule, which either contains fixed quantities or relative shares for each site in the site group, or you can apply an allocation strategy. When you are creating an allocation table in purchasing, you either enter a site/customer group with quantity distribution by manual entry or allocation strategy, or you assign an allocation rule to distribute the quantities.


In case of a promotion, the site group that is assigned to an allocation rule must represent a superset of the site groups for the promotion.

You can create allocation rules manually or generate them based on key figures from the business warehouse. You can do this using planning and statistical data. You can also use your own information sources. Alternatively to allocation rules, allocation strategies can be used to flexibly determine the quantity for each store - for example, by accessing planning or historic data in the business warehouse.

You can have the system generate documents for Logistics for each business transaction (controlled by the item category) in follow-on document generation of the allocation table. For example, you can generate stock transport orders or outbound deliveries for stock reduction, and standard purchase orders for procurement from external vendors.

The allocation table comprises the following structural elements:

  • The header contains information such as the allocation table number, the organizational levels (purchasing organization and purchasing group) and a header text.

  • An allocation table item contains information such as the item category, article number, planned quantity, site group, allocation rule or allocation strategy, and status information.

  • A site group is assigned to an allocation table item. The site group view contains information such as the site group number, the assigned sites, allocation quotas, and planned quantities. In an allocation table created in purchasing, it is also possible to assign a customer group.

  • Sites are assigned to a site group. The site view is also available for each allocation table item, and provides information such as the site number, planned quantity, source of supply, and delivery dates. Depending on the item category, either a distribution center is assigned as supplying site, or an external vendor is displayed as source of supply. In case a customer group was assigned to an allocation table item, the site view displays the data for each customer.

  • The distribution center view of an allocation table item contains information such as the distribution center number, planned quantity, and the external vendor supplying the DC.

The allocation table type contains the following default parameters for quantity calculation for the allocation table:

  • Rounding: Controls how rounding takes place during quantity calculation for sites. You can have the system consider rounding profiles from the article master, or round up/down/off.

  • Distribution of remaining quantities (Split remainder): Controls how remaining quantities in quantity calculation are distributed, or if the total quantity is to be adjusted.

  • Minimum and maximum quantities: Controls, if these are considered for each site to calculate or update planned quantities.

The item category for the allocation table defines the business transaction. It defines which follow-on documents are to be generated using the allocation table. The item category plays a very important role when it comes to defining the merchandise flow.

Specific item categories exist for controlling merchandise movements (merchandise distribution) within the distribution center (cross docking, flow through) which can be used specifically for purchase orders using the distribution center.

You can make the time of follow-on document generation dependent on the notification. Do you want to generate follow-on documents immediately after the allocation table is posted, or wait until the notification procedure has been completed?

Third-party Order:

The purchaser sends the vendor order for the sites to the external vendor. The vendor is asked to deliver the merchandise directly to the sites/customers for whom the order was placed.

Supply source determination is used to find external vendors.

Stock reduction:

In this case, no purchase order is placed with a vendor. The sites (and/or customers) defined in the allocation table are supplied with merchandise from the existing warehouse stock of the distribution center.

The DC stock can be reduced to supply sites using stock transfer orders or deliveries, or sales orders for customers.

Supply source determination for a particular site/customer is used to find distribution centers (internal vendor).

Purchase order using the distribution center:

This can be divided into two steps:

  • Step one involves placing a purchase order for a distribution center with an external vendor. The vendor then delivers the ordered merchandise to the distribution center.

  • Step two involves the merchandise flow from the distribution center to the store/customer. This is triggered by a stock transfer order or outbound delivery for stores, or by a sales order for customers.

Supply source determination in the 2-step allocation is used to find both external and internal vendors.

Order using the distribution center with merchandise distribution:

You can plan merchandise distribution in the DC using an allocation table and the corresponding item category. Item category CA controls merchandise distribution using cross-docking, and item category CB controls the distribution method flow-through. When you generate follow-on documents for the allocation table, the system updates merchandise distribution data in the system. The data is then used later to control merchandise distribution (cross-docking/flow-through) in the distribution center. The follow-on documents are the procurement and issue documents from a distribution center point of view. Procurement documents are vendor purchase orders for the distribution center. The vendor then delivers the ordered merchandise to the distribution center. Issue documents control the flow of goods from the distribution center to the stores/customers. This is triggered by stock transfer orders or sales orders. Merchandise distribution is executed in the distribution center. The distribution data is adjusted to match the quantities actually available at goods receipt to the final processing method. The merchandise is then distributed to recipients using cross-docking or flow-through, or placed in storage (putaway). The cross-docking/flow-through merchandise is then moved to the goods issue zone, where the goods issue is posted.

Business transactions for customer:

The business transactions third-party order, stock reduction, and purchase order using the DC (with or without merchandise distribution), can also be performed for customers. Specific item categories are available for this purpose. A customer master record must be created in the system for each customer. In this case, the system generates a sales order when generating the follow-on documents for the customer from the allocation table.

Returns allocation table:

Allocation tables can also be used for returns processes involving sites - for example, for a central product recall. The follow-on documents are then returns purchase orders/stock transfer orders. It is possible to have the system determine the allocation table quantities based on the unrestricted-use stock in the respective sites.

There are different kinds of notifications depending on the business transaction:

  • Headquarters notifies the stores: Stock allocation notification, request notification, request notification with confirmation notification

  • Headquarters notifies the distribution center: Stock allocation notification distribution center

In addition to these notifications, sites also receive change notifications that provide the stores with additional information about changes (quantities, delivery dates) made at a later date by headquarters. These notifications only contain the allocation table items that were changed. Change notifications are created for stock allocation notifications, request notifications, confirmation notifications, and stock allocation notifications for distribution centers. You can then inform your sites about the allocation of merchandise for example by post/mail or by EDI (IDocs). Sites can report back their requested quantities using their store merchandise management system.

You can define the notification form by selecting the notification category indicator in the sub-items for the allocation table (for each article and site) or for each allocation table item (for each article).

Reminder: This notification is intended to remind sites that they have not responded to a request from headquarters.

When creating an allocation table, you can perform a mass selection of articles. You can choose from many different article selection criteria, such as merchandise category, article category, article hierarchy nodes, vendor, article list, and many more.

When you create an allocation table, you can reference existing vendor orders - for example, you can select these according to the delivery date. You can also reference shipping notifications, and contracts.

The function for generating follow-on documents allows you to create vendor orders (or contract release orders), stock transport orders, outbound deliveries, and sales orders from an allocation table. However, in a 2-step allocation, you can still change the recipients (stores or customers) for the allocation table after having generated the vendor purchase order, but before generating the follow-on documents for the stores/customers. For example, if a store closes, you can distribute the quantities among the other stores. This is done using the quantity distribution function.

Generating Follow-on Documents for Allocation Table

Follow-on documents are generated from the allocation table according to the item category. When this takes place, distribution data can be updated in the system and is then used to control the flow of goods in the distribution center after goods receipt. If the allocation table is created with a reference to a purchase order or a shipping notification, it means a procurement document already exists. Consequently, only the issue documents are generated as follow-on documents from the allocation table. For item category stock reduction, only the work-list for generating issue documents from the DC is created.

When you have planned the merchandise distribution through cross-docking in the allocation table using the relevant allocation table item category, you generate the procurement and distribution follow-on documents. These are first the vendor purchase orders to procure merchandise for the DC, and then the stock transport (warehouse) orders to distribute the quantities to the stores.

Vendor pre-picking is a prerequisite for the cross-docking process in the DC. This means that the vendor has to be informed about the recipient (store) quantities per article. In general, merchandise distribution supports this in two ways. Either the whole information is provided in one standard PO to the vendor, which means each main order item contains the quantity info for each recipient by means of one sub-item per recipient, or in single-store /single-recipient purchase orders. In this case, the planned merchandise distribution among n stores results in n standard single-store/single-recipient purchase orders, which are all grouped under a collective number. When these supplier purchase orders are generated, the collective number is displayed in the DC detail view of the allocation table items. With single-recipient purchase orders, one sub-item is created for each main item. In the supplier purchase order, the final recipient (= store) displays on the SLS tab page in the item details for each main item.

In order to have the system include the recipient information for pre-picking in the vendor purchase order by means of statistical sub-items, you assign a supplementary logistics service (SLS) additional to the relevant article master records.

The Allocation table function only supports prepacked cross-docking with Supplementary Logistics Services, if single-recipient vendor orders are generated. The generation of single-recipient orders from allocation tables is activated in Customizing.

The issue documents for the stores are then generated as follow-on documents of the allocation table in a second step.

The typical procurement documents that you can generate as follow-on documents from an allocation table for sites are the standard purchase order and stock transport order.

In merchandise distribution, the procurement document for the DC (supplier purchase order), and the issue document for the store (stock transport order) are logically connected. This link is stored as distribution data in the system. The figure, Follow-On Documents, shows the single-recipient vendor order for the DC, and the related stock transport order for the store.

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