7Creating Aggregate Discounts
Creating Aggregate Discounts
This chapter covers aggregate discounts and includes the following topics:
About Aggregate Discounts
When you define aggregate discounts, you specify a bundle of items and the discount that applies to specific items if the user buys the entire bundle.
For example, you might specify that customers who buy a dining room table and four chairs would get 10 percent off on the price of the chairs.
In addition to the method described in this chapter, there are two other ways to create aggregate discounts:
Simple Product Bundles. In simple cases, you can create a simple product bundle with all the products in the promotion and create a special price for the bundle. For example, create a product bundle with a dining room table and four chairs, and set a price for this bundle that is less than the total of the individual prices of these items. For more information about simple bundle pricing, see Creating a Price List Line Item for a Simple Product Bundle.
Product Promotions. Product promotions allow you to create bundled promotions, to show these promotions in quotes, orders, and catalogs, and to recommend these promotions to customers who buy products in the bundle. This is usually the preferred method of creating bundle discounts. For more information, see Creating Product Promotions.
Note: If you use an aggregate discount with other types of price adjustments, then the final price depends on the order in which Siebel Pricer applies the pricing adjustments. For more information, see About the Processing Order of Price Adjustments.
Buy and Receive Products for Aggregate Discounts
When you add the components to an aggregate discount, you specify whether items are buy or receive products:
Buy products. To qualify for the aggregate discount, the customer must buy at least the specified quantity of all the Buy products in the list. The Buy products themselves may be discounted if the customer qualifies for the aggregate discount.
Receive products. The Receive products are discounted if the customer qualifies for an aggregate discount. There is no requirement to buy a specific number of Receive products.
Some examples of Buy and Receive products in aggregate discounts are as follows:
If you buy a certain model of desk, then you get 50 percent off on a certain model of ergonomic chair. (The desk is a Buy product with a quantity of 1 and no price adjustment. The chair is a Receive product with a quantity of 1 and a price adjustment of 50 percent discount.)
If you buy 10 desks, then you get 10 percent off on the desks and 50 percent off on the ergonomic chairs for them. (The desk is a Buy product with a quantity of 10 and a price adjustment of 10 percent discount. The chair is a Receive product with a quantity of 10 and a price adjustment of 50 percent discount.)
If you buy 10 desks, then you get 10 percent off on the desks and 50 percent off on any model of desk chair for them. (The desk is a Buy product with a quantity of 10 and a price adjustment of 10 percent discount. Each model of desk chair is a Receive product with a quantity of 10 and a price adjustment of 50 percent discount.)
If you buy 10 desks, then you get 10 percent off on the desks. (The desk is a Buy product with a quantity of 10 and a price adjustment of 10 percent discount. There is no Receive product.)
Note: The Buy product quantity is a minimum and the Receive product quantity is a maximum. For example, the bundling discount says that if you buy 10 desks, then you get 50 percent off on 10 ergonomic chairs for them. You must then buy a minimum of 10 desks to get the discount, and you can get a discount on a maximum of 10 chairs. This prevents a customer from buying 10 desks in order to get a discount on thousands of chairs.
Process of Creating Aggregate Discounts
By default, aggregate discount functionality is not designed to be used with promotions that include customizable products. If you want to use aggregate discount functionality with promotions that include customizable products, then it is recommended that you redesign the workflow with regard to the specific business scenario. For more information about the aggregate discount workflow, see Pricing Procedure - Aggregate Discounts Workflow.
To create aggregate discounts, perform the following tasks:
Adding an Aggregate Discount Record
This task is a step in Process of Creating Aggregate Discounts.
To define an aggregate discount, you enter general information about the group of products in the Aggregate Discount record and add all the products in the group to the Discount Details list.
To define an aggregate discount
Navigate to the Administration - Pricing screen, then Aggregate Discounts view.
Add a record to the Aggregate Discounts list, and complete the necessary fields in the record and the More Info form, as described in the following table.
Field Comments Name
Enter a name for the aggregate discount.
Currency
Select the currency for the aggregate discount.
Exchange Date
If multiple currencies are used for the products in the bundle, then enter the date of the exchange rate that will be used for currency conversion.
Effective From
Enter the start date when this discount becomes active.
Effective To
Enter the end date when this discount is no longer active.
Active
Select this check box to activate the aggregate discount.
The discount is active only if the date of an order is between the Effective From and Effective To dates, and you have selected this check box so the aggregate discount is active.
Click the Discount Details view tab.
For each product in the bundle, add a record to the Discount Details list and complete the necessary fields, as described in the following table.
Field Comments Product Name
Select the product.
Buy
If it is a Buy product, then select this check box. For more information, see Buy and Receive Products for Aggregate Discounts.
Receive
If it is a Receive product, then select this check box.
Note: You cannot select both the Buy and Receive check box in a single record. If you want to make a product both a Buy and a Receive product, then add two records for that product, and select Buy in one and Receive in the other.Qty
Enter the quantity of the product. For Buy products, this is the minimum quantity that you must buy to receive the aggregate discount. For Receive products, this is the maximum quantity that can receive a discount. For more information, see Buy and Receive Products for Aggregate Discounts.
Adjustment Type
Select the type of price adjustment applied to this product. Options are Discount Amount, % Discount, Markup Amount, % Markup, and Price Override.
Adjustment Amount
Enter the amount of the Adjustment. How this value is used depends on the selection in the Adjustment Type field:
Discount Amount. The adjustment amount is subtracted from the product price.
% Discount. The adjustment amount is treated as a percentage of the product price, which is subtracted from the product price.
Markup Amount. The adjustment amount is added to the product price.
% Markup. The adjustment amount is treated as a percentage of the product price, which is added to the product price.
Price Override. The adjustment amount is used as the product price, overriding the original price.
Defining Aggregate Discount Sequence
Aggregate discount sequences are used to define the stacking logic for aggregate discounts. This logic can define:
The order in which aggregate discounts are applied.
Which aggregate discounts are mutually exclusive.
Which aggregate discounts can be “stacked," or applied in conjunction with one another.
You can use aggregate discounts within a quote or an order only if they are part of an aggregate discount sequence. Therefore, you must define an aggregate discount sequence even if you have only one aggregate discount. An aggregate discount can be a part of many aggregate discount sequences.
Aggregate discount sequences are linked with price list and discount matrix line items (like volume discounts and attribute adjustments). At run time, the pricing procedure picks the aggregate discount sequence to be used and evaluates the aggregate discounts to be applied.
The order in which aggregate discounts are applied within an aggregate discount sequence can affect the resulting price. For example, if aggregate discount (a) gives a discount of $100, and aggregate discount (b) gives you 10% off the price of the product, the resulting price would be lower if aggregate discount (b) is applied before aggregate discount (a).
To apply all the aggregate discounts in a sequence, you attach the sequence to either a price list or a product with component line items. A sequence includes all the aggregate discounts that apply to one price list or to one product with components in a price list.
Use the following procedure to define the aggregate discount sequence. This task is a step in Process of Creating Aggregate Discounts.
To define the aggregate discount sequence
Navigate to the Administration - Pricing screen, then Aggregate Discount Sequences view.
Add a record to the Aggregate Discount Sequence list and complete the necessary fields as described in the following table.
Field Comments Name
Enter a name for the aggregate discount sequence.
Effective From
Enter the date when the aggregate discount sequence becomes effective.
Effective To
Enter the date when the aggregate discount sequence is no longer effective.
Active
Select this check box to activate the aggregate discount sequence.
Click the Aggregate Discounts view tab.
Add records to the Aggregate Discounts list for every aggregate discount that you want in this sequence and complete the necessary fields, as described in the following table.
Field Comments Sequence
Enter the sequence in which this aggregate discount is applied.
Name
Select the aggregate discount.
Next Discount if Used
Select the next aggregate discount in the sequence to be used if this discount is applied.
Next Discount if not Used
Select the next aggregate discount in the sequence to be used if this discount is not applied.
Attaching an Aggregate Discount Sequence to a Price List
This task is a step in Process of Creating Aggregate Discounts.
You can attach the aggregate discount sequence to a price list and, with some restrictions, also to price list line items. In the case of price list line items, you can attach an aggregate discount sequence to a product with components.
For example, with a computer system, you might want to attach the aggregate discount sequence to a product with components to give discounts to customers who buy a specific CD-ROM drive, monitor, and keyboard.
Attaching an Aggregate Discount Sequence to a Price List
Use the following procedure to attach an aggregate discount sequence to a price list.
To attach an aggregate discount sequence to a price list
Navigate to the Administration - Pricing screen, then Price Lists view.
In the Price Lists list, select the price list to which you will attach the sequence.
In the More Info form, in the Aggregate Discount Sequence field, select the sequence to attach to this price list.
The aggregate discounts in this sequence apply to all prices in this price list.
Attaching an Aggregate Discount Sequence to a Price List Line Item
Use the following procedure to attach an aggregate discount sequence to a price list line item.
To attach an aggregate discount sequence to a price list line item
Navigate to the Administration - Pricing screen, then Price Lists view.
Click the Price List Line Item view tab.
In the Price List Item Detail form, in the Aggregate Discount Sequence field, select the aggregate discount sequence.
You can modify this field only if the product is a product with components.
Aggregate Discounts for Buy One, Get One Free Discounts
Aggregate discounts are generally used to reduce the price of one product when it is sold with one or more different products. For example, a customer could buy a dining room table at full price and receive a discount on dining room chairs.
Aggregate discounts can also be used where you buy a product and receive a discount on the same product. This is commonly called a Buy One, Get One Free discount.
To set up this sort of discount, combine them in one aggregate discount with a Buy quantity equal to the total number of products a customer must buy, and the discount set to give the appropriate result. For example, if customers can buy one dining room chair and get one chair for free:
Set the Buy quantity to two.
Set the price Adjustment Type to % Discount and the Adjustment Amount to 50 to create a Receive rule that gives 50 percent off the List price for each product.
Similarly, if customers can buy three dining room chairs and get one chair for free:
Set the Buy Quantity to four.
Set the price Adjustment Type to % Discount and Adjustment Amount to 25 to create a receive rule that gives 25 percent off the List price for each product.
Aggregate Discounts for Products with Components
Aggregate discounts can be associated with component-based products. For example, for customers buying personal computers, you might create an aggregate discount so that if they buy both a CD-ROM drive and a floppy disk drive, then they get a 10 percent discount on both drives.
Aggregate discounts for product components work in the same general way as other aggregate discounts, but there are several additional constraints:
Aggregate discounts for product components must include only components of the product. Do not create an aggregate discount that mixes components of one component-based product with components of other component-based products.
The aggregate discount is applied once the product with component has the required quantity of the Buy and the Receive products.
If you are defining the required quantities for a component-based product component in a bundling discount, then be aware of the constraints defined for the product, especially the Max Cardinality limit. Do not define aggregate discounts that require the user to buy more products than the cardinality limits. If the pricing rule exceeds cardinality, then it will not be applied.
Note: If the same product appears multiple times as a component, then the different instances of the product may have different prices after all adjustments. In this case, the aggregate discount uses as its target price the instance of the product with the highest net price. For example, if a specific memory chip appears multiple places within a customizable computer system product, then the highest calculated price for that memory chip will be used as the target price for all bundling discounts on that chip.