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In long-term trade promotions based on products or product categories, you can use tiered growth rebates to provide incentives to retailers where the incentive can vary with the level of performance over a period of time. The better the performance, the higher the rebate.

Example Example

If sales revenue increases by between 5% and 7% over last year, the retailer receives a rebate of 1,000 USD. If sales revenue increases by between 8% and 10%, the retailer receives a rebate of USD 2,000.

End of the example.

Example Example

If a retailer increases the number of shelves in a product display by one or two, the retailer receives a rebate of USD 500. If the retailer increases the number of shelves by three or four, the retailer receives a rebate of USD 1,000. If the retailer increases the number by five or six, the rebate is USD 2,000.

End of the example.

Each tiered growth rebate (TGR) consists of a set of tiers. Each tier associates a range of performance values with a specific spend value. You can define the range and spend value for each tier. Actual performance is evaluated to a single figure that is referred to as the evaluation criterion. The final rebate is determined using a formula referred to as the calculation method. Each TGR type has one evaluation criterion and one calculation method.

Prerequisites

  • You have defined the set of TGR types you want to use in Customizing for Customer Relationship Management, by choosing   Trade Promotion Management   Trade Promotions   Trade Spends   Tiered Growth Rebates   Define Tiered Growth Rebate Types  .

  • You have associated a unique trade spend combination (spend type, spend category, spend method) with each TGR type in Customizing for Customer Relationship Management, by choosing   Trade Promotion Management   Trade Promotions   Trade Spends   Tiered Growth Rebates   Define Trade Spend Combinations for Tiered Growth Rebates  .

  • You have associated the names of the key figures and profiles that are retrieved from SAP NetWeaver Business Intelligence (SAP NetWeaver BI) for the TGR, with the corresponding names of those key figures in Customer Relationship Management (CRM), in Customizing for Customer Relationship Management, by choosing  Trade Promotion Management   Trade Promotions   Trade Spends   Tiered Growth Rebates   Define BI Content  .

  • You have defined condition records in Customizing for Customer Relationship Management, by choosing   Account Planning   Condition Maintenance   Define Condition Generation  .

  • You have created planning profiles for tiered growth rebates in Customizing by choosing   Customer Relationship Management   Account Planning   Key Figure Planning   Define Planning Profile Groups  .

  • You must integrate tiered growth rebates with claims and funds. When you release a trade promotion, the system generates condition records. For more information about conditions, see Condition Generation in Trade Promotion Management.

Features

A TGR type is a unique identifier for a specific combination of base dimension, comparison dimension, tier type, spend value type, and calculation method. The trade spend combination (spend type, spend category, spend method) you select in a trade promotion determines the TGR type.

The following are the default TGR types that ship with SAP CRM 2007 (the technical name of the TGR type in Customizing appears in square brackets):

  • Variable growth vs last year, total sales [TGR0000]

    A variable TGR based on growth of total sales over the previous year's total sales where sales are a monetary value measured in the currency of the trade promotion

    Example Example

    Using the tiers defined below, if last year sales is USD 100,000 and actual sales is USD 112,000 (a sales growth of 12%), the rebate is (112,000 USD * 1.0%), which yields USD 1,120.

    Tier

    Percentage of Sales Growth

    Spend Value

    1

    0.0%–10.0%

    0.0%

    2

    10.0%–15.0%

    1.0%

    3

    15.0%–

    1.5%
    End of the example.

  • Variable growth vs last year, volume[TGR0001]

    A variable TGR based on growth in sales volume over the previous year's sales volume where volume is measured in cases

  • Variable growth vs last year, sales [TGR0002]

    A variable TGR based on growth in sales over the previous year's sales where sales are a monetary value measured in the currency of the trade promotion

  • Fixed growth vs last year, total sales[TGR0003]

    A fixed TGR based on growth in total sales over the previous year's total sales where sales are a monetary value measured in the currency of the trade promotion

  • Incremental growth vs last year, total sales[TGR0004]

    A TGR based on a percentage growth in total sales over the previous year's sales

    Example Example

    Using the tiers defined below, if last year sales volume is 100,000 cases and actual sales volume is 112,000 cases (a sales growth of 12%), the rebate is ((112,000 — 100,000) * 2.5%), which yields USD 300.

    Tier

    Percentage of Sales Growth

    Spend Value

    1

    0.0%–10.0%

    0.0%

    2

    10.0%–15.0%

    2.5%

    3

    15%–

    5.0%
    End of the example.

  • Off-invoice [TGR0005]

    An off-invoice discount (a scale type discount) based on total sales during the year

    Example Example

    Using the tiers defined below, consider a retailer who places three orders during the year, each for 75,000 cases.

    On the first invoice, the retailer receives a discount of (75,000 * USD 1.00), which yields USD 75,000.

    On the second invoice, the total number of cases purchased to date is 150,000. Thus 25,000 of the cases in the current order are mapped to tier 1, and 50,000 to tier 2. The retailer receives a discount of (25,000 * USD 1.00) + (50,000 * USD 1.50), which yields USD 100,000.

    On the third invoice, the total number of cases purchased to date is 225,000. Thus all 75,000 of the cases in the current order are mapped to tier 3. The retailer receives a discount of (75,000 * USD 2.00), which yields USD 150,000.

    Tier

    Number of Cases Sold

    Spend Value

    1

    0–100,000

    USD 1.00

    2

    100,000–150,000

    USD 1.50

    3

    150,000–

    USD 2.00
    End of the example.

  • Shelves [TGR0006]

    A TGR based on the number of shelves per product the retailer has in a store

  • Growth over each tier [TGR0007]

    A variable rebate based on the number of cases sold

    Example Example

    Using the tiers defined below, if a retailer sells 225 cases, the rebate is ((225 — 0) * USD 0.00) + ((225 — 100) * USD 0.80) + ((225–200) * USD 1.25), which yields USD 131.25.

    Tier

    Number of Cases Sold

    Spend Value

    1

    0–100

    USD 0.00

    2

    100–200

    USD 0.80

    3

    200–

    USD 1.25
    End of the example.

  • Classic tiers [TGR0008]

    A variable rebate based on actual volume (measured in cases) where the spend value is multiplied by the volume in each tier

    Example Example

    Using the tiers defined below, if 25,000 cases are sold, the rebate is (10,000 * USD 1.00) + (10,000 * USD 2.00) + (5,000 * USD 3.00), which yields USD 45,000.00.

    Tier

    Number of Cases Sold

    Spend Value

    1

    0–10,000

    USD 1.00

    2

    10,000–20,000

    USD 2.00

    3

    20,000–

    USD 3.00
    End of the example.

  • All tiers [TGR0009]

    A variable rebate based on actual volume (measured in cases) where the spend value is multiplied by the total volume for the period

    Example Example

    Using the tiers defined in the example for classic tiers, if 25,000 cases are sold, the rebate is (25,000 * USD 1.00) + (25,000 * USD 2.00) + (25,000 * USD 3.00), which yields USD 150,000.00.

    End of the example.

You can define a performance evaluation criterion or create a calculation method for determining the TGR in a trade promotion in Customizing by choosing   Customer Relationship Management   Trade Promotion Management   Trade Promotions   Trade Spends   Tiered Growth Rebates   Business Add-Ins   BAdI: Performance Evaluation Criteria and Calculation Method  .

Example

A classic tiers TGR uses the tiers defined below. A retailer has sold 350 cases.

The evaluation criterion is 350. Since this is a classic tiers TGR, the first 100 cases sold are mapped to tier one, the next 200 cases to tier two, and the last 50 cases to tier three.

The calculation method for this TGR type is the sum of ((number of cases sold for that tier) * (spend value for that tier)) for all tiers.

The rebate for a sale of 350 cases is (100 * USD 0.00) + (100 * USD 0.80) + (150 * USD 1.25), which yields USD 267.50.

Tier

Number of Cases Sold

Spend Value

1

0–100

USD 0.00

2

100–200

USD 0.80

3

200–

USD 1.25