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The CPG companies invest a considerable effort and cost in planning and executing trade promotional activities. However very few CPG companies are able to derive the expected results or ROI from the promotional activities. One key challenge is the lack of an integrated solution that helps the CPG companies and retailer to plan for the entire business chain (CPG Manufacturer -> Retailer-> Consumer) in a mutually understandable manner.

SAP Trade Management (TM) 3.0 is a revolutionary, holistic solution that embodies a basic shift that the key account managers are not just promotion planners working in silos but are trusted advisors to the retailers, jointly planning for the entire business chain through the retailer and managing both internal margin as well as customer category growth. Customer Business Planning (CBP) is a key component of the SAP TM 3.0 solution and fills an important whitespace that enables CPG companies to run an integrated, seamless trade program that goes beyond individual promotion planning.

The current blog looks at some of the key features of the CBP module and how these are beneficial in providing incremental benefits to the current users of SAP Trade Promotion Management.

Key Features of CBP

  • Product Planning Hierarchy:

This feature addresses a long time gap that the material hierarchy defined in SAP ECC solution was not always sufficient from a trade planning perspective. Trade planners wanted to classify the products in a different way than the way these were classified for logistics / financial perspective in ECC. In CBP, product planning hierarchy can be defined independently from the material hierarchy; though (if needed) some of the levels can correspond to the material hierarchy.  What is more important is that unlike a material hierarchy, which is customer agnostic, a product planning hierarchy can be defined separately for each retailer. This provides a Key Account Manager a great flexibility in setting the targets or analyze the performance at different levels in a way that both the retailer and the CPG company understand.

  • Buyer set-up and Buyer-wise Target Planning: 

There may be more than one buyer  who are involved from the retailers end, in managing the purchasing and selling activities of the CPG company’s products. They may be responsible per specific brands / sub-brands. CBP enables to assign the buyers to the different levels of the product planning hierarchy and also agree and monitor targets per buyer – such as volume / revenue growth / profit margins.

  • Full business planning (base and promotional):

Using CBP, a Key Account Manager can now plan for the entire business for the full planning year; not just the individual trade promotions. The baseline plan is constructed using the references like previous year’s planned data or sell-in (shipment) data or EPOS data and considering any factor to reflect the current year’s adjustment. Once the baseline plan is finalized, then the individual promotional activities are planned on top of this. Planning can be performed on any of the three views in CBP:

  • P&L View displays the complete P&L (all key figures) in rows and the time dimension (every week / month) in columns, for a single Product Dimension (any level of product planning hierarchy or an individual product)

  • Product View shows entire product hierarchy in the form of rows and the time dimension (every week / month) in the columns, for a single metric/KPI from the P&L structure

  • Summary View shows the data at an aggregated level for all the entire product hierarchy in the form of rows and all metrics/KPIs from the P&L structure in the columns , aggregated for the entire year

All the views are internally synchronized at real time. E.g. The Key Account Manager may choose to make changes to the planned volume of a specific product on the P&L view, for a certain week. The data in all other views (e.g. product-tree, monthly view) and across the entire product planning hierarchy levels is automatically adjusted.

  • Customer P&L:

This is one of the most important features of CBP. It enables the Key Account Manager to plan, monitor and analyze the End to End P&L covering the business from CPG company -> Retailer -> End Consumer, as the planning year progresses.

As a standard offering, some of the key figures on the P&L are:

  • Baseline Volume, Uplift and Total Volume

  • Gross Sales Value, Total Promotional Investment, COGS, Internal Margin

  • Retail Shelf Price, Retailer total profit, Retailer Margin, etc.

These key figures (components of the P&L) can be easily enhanced to suit the individual client requirements. Technically, the planning is performed using SAP BI-IP. It offers a very flexible, extendable set-up to add new key figures or adjust the planning layouts displayed on the different views.

  • Integration with Trade Promotion Planning and Execution:

The traditional trade promotion planning functionality is now embedded in / seamlessly integrated with the CBP. The solution allows the creation of two types of promotions, DRAFT and DETAIL. Both promotion types can be created from the Customer Business Plan Calendar, P&L, Product Tree, Summary views.

  1. DRAFT Promotions are used to quickly ascertain a promotional impact on the Plan. These promotions have no budget impact nor are finalized, but serve as placeholders for promotional activity during the planning process

  2. DETAIL Promotions are created as confirmed promotional events. These have budget impact and deplete the Fund. Once finalized and released these generate the downstream objects in ECC (campaigns / off-invoice discounts / rebates etc.)

The baseline volume for the promotional period is automatically copied from CBP plan to the individual trade promotion. The “uplift” as well as the planned promotional expenses are transferred back from trade promotion to CBP to provide an integrated view at all times.

As the trade promotions are executed, the actual data (e.g. settled claim expenses, sales order volume, EPOS data) is updated back in the CBP plan.

  • Retailer Calendar: 

This is another area where CBP addresses a key requirement in trade planning. The retailer’s planning calendar does not necessarily match with the CPG company calendar and the definition of planning periods may be different. CBP solution allows to define the retailer calendar and display the planning data optionally as per the retailer calendar.

  • Scenario Planning:

A scenario is a variant of the operation plan and the solution allows the creation of a three customer business planning scenarios (apart from operational plan) for a given planning year. Scenarios enable the comparison all the KPIs (Key Performance Indicators) between the different scenarios as well as the operational plan for the planning year.


Customer Business Planning greatly enhances the capability of the SAP product from an individual trade event planning and tracking tool to a full business planning solution. The current users of SAP Trade Promotion Management can derive a lot of additional benefits by implementing SAP TM 3.0 which seamlessly integrates the Trade Promotion Planning into a holistic, end to end business solution.