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Cannibalization Effect of Promotions (New) ( RELNSCM500_ICH_PRO_CANNI )

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Cannibalization Effect of Promotions (New)

Use

As of SAP SCM 5.0, you can include the effects of "cannibalization" in ICH Promotion Planning. Cannibalization refers to the phenomenon whereby the promotion of one product may affect the sales or demand for other products.

You model the cannibalization effect between products using a cannibalization group that you assign to a promotion. You assign products with an associated factor (cannibalization percentage) to the cannibalization group. When you create a promotion, if a product within the cannibalization group is being promoted, the baseline forecast values of other products in the cannibalization group are affected according to their baseline quantities and cannibalization factors.

You can assign multiple cannibalization groups in the form of a cannibalization profile at the event type/ship-to location/product level to accommodate different product categories that you may promote in one promotion. You can also manually correct cannibalization factors at the promotion level, and you can manually add cannibalization products and their factors to a promotion even if originally there was no cannibalization group assigned to the promotion. The system calculates the cannibalized baseline forecast for cannibalized products with the same location as the promoted product. Cannibalization effects are only considered for the same customer.

Other features of cannibalization include:

• The ability to turn the cannibalization effect for a promotion on or off

• The daily baseline forecast is adjusted according to the cannibalization effects

• The cannibalized baseline forecast is displayed in the short-term forecasting screen

• The system issues an alert if a negative cannibalized baseline causes the final baseline quantity to fall below zero

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