PRICING_PRESENTATION.ppt
- 1. Pricing • The term Pricing is used broadly to describe the calculation of prices and costs . • Pricing enables to determine relevant price information in all kind of business transactions, such as sales or service orders, contracts, quotations, or campaigns. • Pricing provides an infrastructure for managing comprehensive pricing strategies and enables to provide consistent price information anytime, anywhere. • Pricing plays a vital role in an organization and it is the largest configuration in Sales and distribution module which uses Condition Technique • Condition Technique is a method where system determines the prices of the material using condition records
- 2. Pricing How Pricing Works When setting up pricing, the system uses a method to determine prices from the information stored in the condition records Pricing is based on the following elements: • Condition types • Pricing procedures • Access sequences • Condition tables
- 3. Pricing Condition Types The condition type defines the characteristics and attributes of a condition. You can define a condition type for every type of price, surcharge, or discount that occurs in your business transactions. Value from Amount - 1 % - 2 % - 4% Amount $1 per 1 kg Freight KF00 Calculation type: Percentage Scale base type: Value scale Calculation type: Amount/weight Discount % K007
- 4. Pricing Pricing Procedure The pricing procedure defines which condition types are permitted and in which sequence It also defines: – Which subtotals are shown on the pricing screens – If a condition type is mandatory – If a condition type is statistical – If a condition can be entered only manually – Formulas for calculating prices – The basis on which the system calculates prices – Which requirements must be met for a specific condition type to be taken into consideration
- 5. Pricing Access Sequence An access sequence is a search strategy that the system uses to search for valid data for a specific condition table. It consists of one or more accesses. Access sequence K027: Condition type K027: 1. Customer-specific discount Condition table: customer/sales organization 2. Discount for price group Condition table: price group/sales organization 3. General discount for the sales organization Condition table: sales organization
- 6. Pricing Condition Table A condition table defines the combination of fields (keys) that identify an individual condition record. Condition table Z007 customer/sales organization: Condition table fields: Sales organization Distribution channel Division Sold-to-party
- 7. Pricing Condition Technique in Sales Document: • System determines the pricing procedure based on the combination of Sales area and customer pricing procedure and Document pricing procedure. • The pricing procedure contains different condition types and each condition type will have an access sequence assigned to it. • Access sequence is a search strategy to find a valid condition records for that particular condition type using the accesses assigned to it. • The system determines the price according to condition records and the same will be reflected in sales document. • The system repeats the same price for each condition type and determines the price
- 8. Pricing Determine conditions at any level you require Discounts/ Surcharges For example: Material price Customer-specific Price list Freight For example: Incoterms, part 1 Incoterms, parts 1+2 For example: Departure country Export Conditions Taxes For example: By customer By material By price group Prices
- 9. Pricing Steps involved in Condition Technique: • Put the fields in catalog • Create tables • Create Access Sequence • Assign tables to Access sequence. • Create Condition Types • Assign Access Sequence to Condition Types. • Create Pricing Procedure • Assign Condition types to Pricing Procedure. • Determination of Pricing Procedure
- 12. Pricing To Create own Sales Doc Types: Define sales doc types: VOV8. Copy std order type& rename • Assign Sales area to Sales Doc Types: – Combine sales orgn – Combine Distbn channel – Combine division – Assign sales order types to permitted sales area To create Price List Types: - Define price list category for customers: OVSI: assign to CMD sales area screen in price list type field, in sales tab page in pricing and statistics section. – Define pricing group for customers: OVSL: assign to CMD sales area screen in price group field, in sales tab page in pricing and statistics section. – Define material group: OVSJ: assign to sales orgn 2 view of MMR in Mat Pricing Group Field. – 2 digits character key with description
- 13. Pricing Customer Specific Price: sales orgn, distbn, division, customer & material Price List Price: sales orgn, distbn, division, price list type & material Material Price: sales orgn, distbn, division & material Customer discount: sales orgn, distbn, division & customer Customer material discount: sales orgn, distbn, division, customer & material or sales orgn, distbn, customer & material. Material discount: sales orgn, distbn, division & material or sales orgn, distbn & mat
- 14. Pricing Pricing – Features – Item level pricing – Manual changes on item and header level – Different calculation types – Scales with different scale bases – Two-dimensional scales – Validity periods – Condition exclusion – Currency conversion – Quantity and unit of measurement conversion – Formulas for more complex pricing – Free goods
- 15. Pricing Pricing – Special Functions Condition exclusion – In pricing, more than one condition record may apply to a particular item at any one time. You can use the condition exclusion process to compare possible conditions to determine such things as the best price for a customer. Variant conditions – Variant conditions can be used to influence the price of a configurable material, depending on the characteristic values assigned. Group conditions – You want some conditions to be used as the basis for determining scale values from several items. For example, materials have been assigned to a material pricing group, and you want a quantity- based discount to be assigned to these materials. You want the quantity scale to be read cumulatively, with the cumulated quantity of all materials in the sales order that are assigned to this material pricing group. Hierarchical access – Hierarchy accesses are used to optimize pricing for hierarchical data constellations, such as a product hierarchy.
- 16. Pricing Free Goods • In many industries, it is common to provide goods free of charge or part of an order at no extra charge when specific products are sold. There are two types of free goods: Inclusive The customer only pays for part of the products ordered. The remaining quantity is free of charge. Exclusive The customer pays for all the items ordered and receives additional products free of charge.
- 17. Pricing Pricing – Benefits • Increased profitability – Economically sound response to any type of customer request • Increased competitiveness – Timely reaction to any type of customer request • Enhance selling effectiveness – By providing product, pricing, and discount information at the point of sale • SAP pricing features a flexible infrastructure, enabling comprehensive pricing strategies.