Marketing Development Funds

- Harish Rai

MDF Concept

Market development funds or MDF are used in an indirect sales channel where funds are made available by a manufacturer or brand owner to help affiliates, channel partners, resellers, VARs, or distributors, etc. sell its products and create local awareness. MDF funds are disbursed based on the execution of a marketing plan agreed-to, between the partner and the manufacturer . These funds are not sales incentives or promotions. They are mainly used for the comarketing and co-branding of products The Brand Owner/Manufacturer is often referred to as Channel Manager and the reseller/distributors as Channel Partners or Partner MDF consists of long and short term planned projects where the product manufacturer/brand owner decides to market a particular product; defines the kinds of marketing activities to be done; how much and how the funding is to be used for these marketing activities In setting up projects, Brand Owner decides on the participating partners, define what expenses can be claimed, duration, and kind of activities that can be conducted, as well as define reimbursement rates at which the expenses can be claimed. Example As a Marketing manager at a multinational company that sells high-quality bicycles how will you utilize your channel partner and MDF to promote your brand and increase depth.

SAP CRM MDF

SAP CRM MDF supports Brand owner to: Create Long and short term Marketing programs Allocate funds to their partners to execute marketing activities. Centrally plan, manage and align marketing activities (such as when, where and what) conducted by partners. Track expenses incurred by the partners in the execution of marketing activities. Partners to: Use the solution to allocate funds within their network and manage their activities. Create claims for reimbursement, track approval and payout status.

SAP CRM MDF

MDF Elements

MDF Program: It is used to set up structural elements that help achieve business objectives spanning a long period of time. Contains special programs ,Initiative and templates ,Funds Plan ,Product & Categories ,channel partner MDF Special Program: Helps the brand owner implement specific, mid-term strategies, uses MDF Program linked Fund Initiative :An initiative documents specific marketing activities by a channel partner in an MDF program or MDF special program . In an initiative, a channel partner proposes a specific marketing activity or set of marketing activities to request funding for it within an MDF program or MDF special program. If you, as the brand owner, approve the proposal, the channel partner performs the proposed activity or activities at his or her own expense. You make your contribution by reimbursing the channel partner afterwards. Initiative template :An initiative template is a basis for creating an initiative in an MDF program or MDF special program. By providing initiative templates, a channel manager can control and restrict the initiatives that channel partners can create. Templates assist channel partners in creating initiatives and clarify to them what they can do in an MDF program or MDF special program. In particular, a template can provide the type for initiatives that are created from it. Causal factor: use causal factors in initiative templates to define the allowed marketing activities during initiatives in the market development funds (MDF) business scenario. You can choose from many types of causal factors, such as Media, Display, or Logo. Example: Causal factor type :Media and Causal factor Value :TV

Funds Management

Funds management is an application that allows brand owners to manage the administration, distribution, and consumption of funds. Funds management also allows brand owners to track the state of the money in funds from the time it is budgeted to the time it is paid out to customers and partners. Depending on their authorization rights, partners may also be able to view and manage their funds.

Features Budget postings

A budget posting is a transfer of a financial transaction to or from an accounting area; debit or credit. Depending on the status of a fund and the status of the funds plan to which the fund is assigned, you can post or update a fund budget by creating or editing a budget update. You can also create a budget transfer from one fund to another, from one fund to many funds, or from many funds to one fund.

Fund postings

Fund postings capture all value changes related to funds in funds management, such as: Changes to budgets Planned and reserved values Prepayment and accrual balances Expensed and settled amounts Fund postings produce a line item-based audit trail of financial transactions relating to funds. Brand owners can use fund postings to monitor the value changes in their funds. The system creates fund postings; you cannot create them manually.

Funds Management
Fund Usages Fund usages are used in funds management (FM) to reserve parts of fund budgets. All fund consumptions are represented in the system by fund usages. Fund usages are created by the system; you cannot create them manually.

Budget Reservation An budget reservation contains information about amounts of money in funds that have been reserved for an initiative or initiative element.How much of budget is allocated for a particular initiative

Claim Management

Claims management is an application that allows users to create and settle claims. Brand owners and consumer products companies can create and settle claims in the market development funds (MDF) The channel partner uses claims in the market development funds (MDF) business scenario to make claims for reimbursement of marketing activities .Can be a followup activity of an Initiative

Types
After you have approved an initiative or initiative element, the channel partner can create a claim to request full or partial reimbursement for marketing activities. Depending on the agreement between you and the channel partner, the channel partner may also need to submit proof that the initiative was executed. You can also create a reimbursement claim against an initiative on behalf of the channel partner. You can create claims without reference to initiatives or initiative elements. The MDF Direct Payment can only be created by brand owners.

Reimbursement Claims

Direct Payments

Funds Lifecycle

Benefits to Brand Owners and Partners

Brand owners Can closely monitor the expenses incurred by partners during the execution of marketing activities. Utilizes the market depth of its channel partner Have visibility and can control unwanted and fraudulent claiming Regulate funding usage by assigning an expiration period to the funding. Partners The Brand value helps channel partner Plan activities, regulate and spread it over time or reserve money for future activities. Claims made easy .Directly create claims for the money spent.

Process Diagram

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