Example: Traffic Lights for Trade Promotions 

Use

In the Marketing Planner, you can display the status of a planned trade promotion using red, amber, or green traffic lights. To do this, you can use the alerts predefined in Business Planning and Simulation (BPS). You can also modify existing alerts or define your own ones.

For more information, see the SAP Library documentation of BPS under KPI Valuation for an Alert.

Predefined Alerts

You can use the following four alerts that are contained in the CP: Sales Planning with Promotions planning profile (4TPM0001) in BPS:

●     Incremental Costs (4TPM1596)

This alert shows the ratio of promotion budget to uplift quantity. This ratio gives you an idea of how high the costs for the expected uplift could be.

Calculation: Budget (0BUDGET) / Uplift Quantity (0UPLI_QTY)

The higher the value of this ratio, the better:

○     Red traffic light, if incremental costs < 0.5

○     Yellow traffic light, if 0.5 > incremental costs > 2

○     Green traffic light, if incremental costs > 2

●     Incremental margin (4TPM1598)

This alert shows the ratio of net revenue to billed quantity. This ratio gives you an idea of how the margin could develop as a result of the planned trade promotion.

Calculation: Net Revenue (0COPANETRV) / Billed Quantity (0BILL_QTY)

The higher the value of this ratio, the better:

○     Red traffic light, if incremental margin < 1

○     Yellow traffic light, if 1 > incremental margin > 10

○     Green traffic light, if incremental margin > 10

●     Return on Investment (4TPM1594)

This alert shows the return on investment (ROI) that a trade promotion could generate.

Calculation: Uplift Quantity (0UPLI_QTY) / Billing Quantity (0BILL_QTY)) x (Net Revenue (0COPANETRV) / Budget (0BUDGET))

The higher the value of this ratio, the better:

○     Red traffic light, if ROI < 1

○     Yellow traffic light, if 1 > ROI > 5

○     Green traffic light, if ROI > 5

●     Uplift Ratio (4TPM1592)

This alert shows the ratio of uplift quantity to base quantity. This ratio gives you an idea of the effect the planned trade promotion could have on sales.

Calculation: Uplift Ratio = Uplift Quantity (0UPLI_QTY) / (Billing Quantity (0BILL_QTY) – Uplift Quantity (0UPLI_QTY))

The higher the value of this ratio, the better:

○     Red traffic light, if uplift ratio < 0.01

○     Yellow traffic light, if 0.01 > uplift ratio > 0.10

○     Green traffic light, if uplift ratio > 0.10

Settings in SAP CRM

You can assign these predefined planning functions to the planning profile group Trade Promotion Management (standard) (4TPM) or TPM – Free Goods (4TPF):

...

        1.      In Customizing for Customer Relationship Management, choose Marketing ® Marketing Planning and Campaign Management ® Key Figure Planning ®Define Planning Profile Groups.

        2.      Choose a planning profile group and then choose Assignment of Traffic Lights.

        3.      Choose New Entries.

        4.      Choose one of the four entries from the dropdown box for Alert Number and Alert ID.

        5.      Save your data.