Scenario for MDF Management

This scenario gives one example of how MDFs might be used. You might use MDFs differently, depending on your business model.

A program manager at the brand owner company is responsible for collaborative marketing with partners. She realizes that partners often have better insight into local markets and are therefore more suited to organize targeted marketing activities. Recently, her company’s new product was introduced and in order to give resellers an incentive to resell this product, she has decided to set up a targeted program. This program lasts for six months, active immediately, and only specially certified dealers are eligible for participation. Under the program, resellers accrue 3% of their revenues for the server product line into their program account. All the funds accrued can then be used by the resellers to run marketing activities. However, her firm refunds only 50% of the total amount approved for every activity.

As part of the setup, the program manager selects the resellers eligible for participation and adds them to the program. By clicking the Generate button, individual program accounts are generated for each participating reseller.

The sales manager at one of the brand owner’s resellers has noticed the new program set up by the brand owner. The sales manager decides to set up a local event to promote the new product to the existing client base. The plan is to invite the 20 most popular customers to a seminar to discuss the product. The sales manager creates and submits a preapproval to obtain approval from the brand owner to run the event.

After the event, the reseller collects invoices for the individual line items on his preapproval and submits a claim for payment. The reseller submits the claim, aware that the brand owner funds a maximum 50% of the total amount.

The channel account manager at the brand owner company reviews the claim. The manager sees that all conditions for payment are met. The manager sets the status of the claim to Accepted. However, because the channel account manager can only approve claims up to $1000, the claim status is not automatically set to Final Approved. Instead, the claim gets routed to his manager for review, who approves it.