SAP Demand Management
You use this component to improve the demand planning of retail companies by optimizing regular prices, markdowns, and promotions. Based on historical sales data it models customer demand for every store, product and promotion type. This allows you to track how customers react to price changes and how lowering or raising a price affects revenue, profit and price image.
Demand models are used to forecast the consumers' reaction to price changes. They take demand influencing factors like seasonality and cannibalization into account.
Depending on your target (such as, increase profit, revenue or price image) you can use different price strategies.
Regular Price Optimization
Regular price optimization helps you to find the best combination of regular prices to meet business and category goals based on customer demand patterns.
Markdown Optimization
Markdown optimization helps you to optimize frequency, timing, and depths of markdowns.
You can optimize discount pricing to achieve the maximum margin possible while reducing inventory at the required rate.
You can run reports on current or previous markdown events. You can change and reoptimize an existing markdown event in response to changing inventory and sales information.
Promotion Optimization
Promotion optimization helps you to plan more profitable and effective promotions.
The promotion optimization process uses historical price data to generate recommendations for products, offers, forecast units, and prices for future promotion events based on defined financial goals. You can manage scenarios that perform what-if analysis of different products, forecast units, prices, and offer combinations. During optimization you create, change, and delete promotion events, areas, and scenarios.