pricing

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

10. Pricing
Condition Technique

11. Pricing
Pricing Procedure Determination

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.