Defining and Maintaining Promotions

This document explains how to define a promotion and how to connect customers, warehouses and items to it. It also describes the functions for maintaining a promotion.

A promotion is an entity that controls prices and discounts for a limited time period for a number of customers and items. The promotion contains its own budget and follow-up transactions.

Outcome

A promotion is created and activated in M3 in order to affect prices and discounts during customer order entry.

A promotion is used to manage prices and discounts and to be able to follow up on promotion sales.

Special prices and discounts take effect during customer order entry.

A promotion header and lines are created and these affect customer order pricing if the status of the promotion is 20=Activated.

A promotion is automatically or manually retrieved during customer order line entry.

The following files are updated:

  • OPROMH – Promotion Header
  • OPROMC – Promotion Customer
  • OPROML – Promotion Lines
  • OPROMW – Promotion per Warehouse.

Before you start

  • The parameters must be set in 'Promotion. Open' (OIS840/P).
  • If you want to use promotions for customer selection purposes, a customer table must be entered in 'Customer Selection Table. Open' (CRS143), or a business chain must be entered in 'Business Chain. Open' (OIS038).
  • If you want to use promotions for warehouse selection purposes, a warehouse table must be entered in 'Warehouse Selection Table. Open' (MMS033).
  • A promotion type must be entered in 'Promotion Type. Open' (OIS849).
  • The promotion must be a part of the price origin sequence in the order type 'CO Type. Open' (OIS010/I).

Follow These Steps

  1. Define Promotion Header

    Promotions are entered in 'Promotion. Open' (OIS840). General settings governing how information is displayed are defined in 'Promotion. Open' (OIS840/P). The promotion header is stored in the OPROMH file.

    • Connecting Customers to Promotion

      A promotion can be connected to one particular customer or to several customers using a customer table or a business chain.

      Field Customers Connected to the Promotion
      Customer number The promotion is only valid for the customer entered.
      Customer table The promotion is valid for all customers defined in a particular customer table.
      Business chain The promotion is valid for all customers belonging to a particular business chain.

      After a promotion has been entered, it is still possible to connect new customers to the promotion on an individual basis. To do this, use sorting order 11 in 'Promotion. Open' (OIS840/B).

      After the promotion is entered, customers connected to it must be generated. The promotion is not active until customers are generated. See the Generating Customers section later in this document.

      Activity Customer

      This field indicates the customer who is actually performing the promotion. This information is useful if your customer is the distributor for a third-party customer who is running a promotion, or if the customer receiving the goods is a wholesale organization and the retail chain performing the promotion belongs to a different business chain, for example.

      This field is used for informational purposes only, such as searching promotion statistics and doing follow-up.

      Activation

      A promotion is activated by setting its status to 20=Activated. A promotion must be activated for prices and discounts to be used in the customer order entry process. Promotions can be activated in advance of the date and time that they actually come into effect since they are controlled by the validity dates you assigned to them.

      When activating the promotion, customers and warehouses will be connected to the promotion according to the selections you make. The system changes the 'Customer generated' and 'Warehouse generated' fields to 1 either when you change the status of the promotion to 20, or when you select option 20 for customers and 30 for warehouses.

      Statuses 00 and 10 are used when a promotion is entered for planning purposes and will not affect prices or discounts during customer order entry. These statuses can either be set manually or assigned automatically.

    • Activation by Customer Order Type

      For a promotion to work during customer order entry, the 'Promotion check' field must be activated and Promotion must be a part of the 'Price origin sequence' field in 'Customer Order Type. Open' (OIS010/I).

      If promotion check 1 is selected, the promotion will be retrieved automatically during customer order line entry. If promotion check 2 is selected, the 'Promotion. Display Qualified' panel (OIS845) will be displayed and the promotion will be available for manual selection during customer order entry.

      Promotion Type

      Promotion types are used to classify and group promotions. This can be useful for statistical purposes. A promotion type only consists of a name and is not used for any other functional purpose.

      Valid From and Valid To

      The validity interval controls the period during which the promotion is valid in customer order entry. The pricing date for the order must be within this interval for the promotion to come into effect. The pricing date is set in the 'Price and discounting setting' field on the I panel in (OIS010).

      These validity fields are closed when items are connected to a promotion, but the dates can still be changed using option 22 on the B panel.

      Activity Start Date and End Date

      The activity start and end dates are the dates between which the promotion is to be advertised in stores and in the media. This data is collected for follow-up and information purposes.

      Costing Model Sales

      The sales price costing model that is to be used to calculate sales prices must be entered.

      Promotion Terms

      Promotion terms define how sales prices and discounts are calculated for a promotion. Promotions are based either on fixed sales prices or on discounts. This is set in the 'Promotion terms' field on the E panel in (OIS840).

    • Discounts Not Used

      If discounts are not to be used (Promotion terms 0 and 1), sales price information must be entered per item in 'Promotion. Open Lines' (OIS841). No fields are displayed on the F panel in (OIS840) if discounts are not used.

    • Discounts Used

      If discounts are to be used (Promotion terms 2 and 3), they must be set up on panel (OIS840/F).

      For discounts to work, a discount number must be reserved for promotions in the discount models used at order entry. A discount number is reserved in the 'Reserve promotional discount' field in 'Discount Model. Open' (OIS800). The reserved discount number must then be defined with discount category 1=Line discount in 'Discount Model. Connect Discount Number' (OIS805).

      Note: The settings for the discount number are controlled by the settings on the F panel in (OIS840) rather than by those on the E panel in (OIS805).

      The following information needs to be entered:

      • Discount base—This setting specifies the total amount from which the discount should be deducted.
      • Manually changeable—This setting specifies whether or not the discount percentage can be changed during order line entry in 'Customer Order. Open Line' (OIS101/E).
      • Internal discount—This setting specifies whether or not the discount should be considered an internal one; that is, a discount that does not affect sales prices. Instead it can be used on a commission basis or for follow-up reasons in sales statistics or the general ledger.
      • Statistical field—This setting specifies which discount field should be updated in the OSBSTD statistics file.
      • Account control object—This setting controls account setup.
      • Presentation—This setting specifies how a discount is to be presented on order acknowledgements and invoices.
      Budgeted Fixed Costs, Actual Fixed Costs and Distribution Method

      The budgeted fixed cost of performing advertising—producing television commercials or printing coupons, for example—can be entered here. The budgeted fixed cost is then distributed among the item lines in the promotion according to the distribution method you specify. This is done using F16=Distribute budget cost in 'Promotion. Open' (OIS840).

      Actual fixed costs

      This field specifies the actual cost of the promotion. This information is maintained manually. The actual fixed cost is then distributed among the item lines in the promotion according to the distribution method you specify. This is done using F17=Distribute actual cost in 'Promotion. Open' (OIS841).

  2. Define Promotion Lines

    A promotion line is made up of the item numbers that are included in the promotion. Prices, discounts, budgeted quantities, amounts and costs are included for each item. Promotion lines are entered in 'Promotion. Open Line' (OIS841), which is started from 'Promotion. Open' (OIS840) using option 11=Promotion lines. Promotion lines are stored in the OPROML file.

    • Entering Items

      Items can be entered manually or automatically. Items are generated automatically by using function key F14 on the B panel of (OIS841), after which a selection is made. This method creates incomplete item records that have to be completed manually.

    • Entering Information per Line

      Information about the item, such as bonus, commission, price and statistical information, is entered on the E panel in (OIS841).

      Fields for sales price and discounts are displayed according to the promotion terms entered on the E panel in (OIS840).

      If discount in kind is given, information must be entered in the 'Item number,' 'Ordered quantity' and 'Sales price' fields.

      A demand factor can be defined in (OIS841/E) in order to create a basis for demand calculation and to take the effects of the promotion into account. If the 'Demand factor' field is left blank, the demand factor entered in 'Order Type. Open' (OIS010/K) is used.

      Information about budget quantity and costs is displayed along with updated information about the actual status of the promotion item on the F panel in (OIS841).

  3. Generate Customers

    A record must be generated for each customer connected to the promotion on the E panel in (OIS840). This is done using option 20 in 'Promotion. Open' (OIS840/B). The connected customers are stored in the OPROMC file.

    When customers are generated:

    • A connection between the promotion and each individual customer will be created. These connections can be viewed on the B panel in (OIS840) using sorting order 11.
    • The 'Customer generated' field is set to 1=One or more customers generated.

    Deleting Customers

    All customers are deleted from a promotion using option 24=Delete customers on the B panel in (OIS840). This option disconnects all customers that were previously connected to the promotion.

  4. Generate Warehouses

    When promotion selection is based on items, the promotion is normally valid for all warehouses. If you want the promotion to be valid for only one warehouse, or for a selection of warehouses, a record must be generated for each warehouse connected to the promotion in 'Warehouse or Warehouse Table' (OIS840/E). This is done using option 30 in 'Promotion. Open' (OIS840/B). The connected warehouses are stored in the OPROMW file.

    When warehouses are generated:

    • A connection between the promotion and each individual customer will be created. The connection can be viewed on the B panel in (OIS840) using sorting order 12.
    • The 'Warehouse generated' field is set to 1=Warehouse(s) generated.

    Deleting Warehouses

    Warehouses are deleted from a promotion using option 34=Delete warehouses on the B panel in (OIS840). This option disconnects all warehouses that were previously connected to the promotion.

  5. Change a Promotion

    • Validity Dates

      After customers have been generated for a promotion, the validity dates can be changed using option 22=Change promotion dates. Otherwise, the dates can be changed on the E panel in (OIS840/E).

      Validity dates for connections to warehouses or customers can also be changed using sorting orders 11 (for customers) and 12 (for warehouses) on the B panel in (OIS840).

    • Promotion Lines

      Promotion lines can be changed no matter what the status of the promotion is. However, be aware that changes at the line level after the promotion has come into effect may affect the traceability of transactions connected to the promotion.

    • Changing Included Customers

      If the promotion has status 20=Activated, the status must be changed manually to 10=Preliminary before you can perform changes to the list of individual customers included in the promotion.

      If a customer has already been generated for a promotion, its promotion records can be changed by using sorting order 11=View all customers included.

      Note: Changes to customers after the promotion has come into effect may affect the traceability of transactions connected to the promotion.

      Changes to Customer Tables and Business Chains

      When you make a change in a customer table or a business chain, a dialog box will appear that asks whether or not you want to update promotions based on the changes you just made. If you answer yes, note that only promotions with the 'Update promotion' field activated on the E panel in (OIS840) will be updated.

      Example:

      You have a promotion with the 'Update promotion' field activated that is connected to a customer table. That table includes, among other things, customers that belong to customer group A. Thus, all customers that belong to customer group A became connected to the promotion when you originally set up the connection between the promotion and the customer table and entered option 20=Generate customers.

      Later on, you enter a new customer into the system and you add it to customer group A. When you exit the new record, a dialog box asks you if you want to update promotions. If you answer yes, the new customer will be connected automatically to the promotion.

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