Internet Marketing

Marketing Information Systems

and the Sales Order Process
1

Learning Objectives
Describe the unintegrated sales processes of Fitter
Snacker , a fictitious company.
Explain why unintegrated Sales and Marketing
information systems lead to company-wide
inefficiency, higher costs, lost profits, and
customer dissatisfaction
Discuss sales and distribution in SAPs R/3
system, and explain how integrated data sharing
increases company-wide efficiency
2

Learning Objectives
Describe how SAP R/3 processes a standard sales
order
Describe the benefits of Customer Relationship
Management software, a useful extension of ERP
software

Marketing Personnel make

decision on:
What products should we produce?
How much of each product should we
produce?
How are our products best promoted and
advertised?
How should our products be distributed?
What price should we charge?
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Problems with Fitter Snackers

Sales process:
Sources:
Three unintegrated systems
Sales Order System
Warehouse System
Accounting System

Manual handling of transactions

Information not available in real time

Fitter Snackers Sales Process

Sales
Order
Quote

Receiving
Returns

Warehouse

Sales

Pick,
Pack and
Ship

Fitter Snackers
Sales Process
Accounting

Invoice

Payment

Sales Quotations and Orders

Sales call
Hand-written quote on 3 sheet form faxed to sales
office
Customer calls 800 number to place order

Sales Quotations and Orders

Problems
Salesperson error in preparing quote manually
Customer call reaches sales office before faxed
quote
Faxed copy is illegible
Delivery data requires call to warehouse
Warehouse provides delivery date estimate

Sales Quotations and Orders

Problems
Initial credit check uses paper process
Credit check for established customers using
accounting printout that may be a week old.

Warehouse/Order Filling
Packing lists/shipping labels manually
sorted
Small order process and large order process
Inventory managed by Access database

10

Warehouse/Order Filling
Problems
Picker may not report breaking case down
for small order
Perishable product requires low inventories
Out of stock decision:
Partial shipment
Change production schedule
Wait until full order can be shipped
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Accounting and Invoicing

Sales order data transferred by disk to
PeachTree program 3 times per week
Clerks must make manual adjustments for
partial shipments and other errors.
Invoices may not always match actual
product shipped

12

Payment and Returns Problems

Customers dont always include copy of
invoice with payment
Invoice may not match paymentreconciliation required
Returned Material Paper process,
sometimes no RMA #
Improper dunning letters
13

Sales and Distribution with ERP

SAP Sales and Distribution Process

Pre-Sales Activities

Sales Order Processing

Inventory Sourcing

Payment
Billing

Delivery
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Pre-Sales Activities
Inquiry or Quote (binding)
Marketing Activities
Tracking Contacts
Sales Calls
Visits
Mailings

15

Sales Order Processing

Activities required to record a sales order

Incorporate data from inquiry or quote
Automated Pricing and Discounting
Automate Credit Check

16

Inventory Sourcing
Check of inventory, orders and production
to see if order can be delivered when
customer desires
Includes shipping and considers
weekends/holidays

17

Delivery
Releasing documents to warehouse to
initiate pick, pack and ship
Sequenced and grouped for warehouse
operation efficiency
Materials Management module carries out
picking, packing and shipping

18

Billing
Sales order data copied to invoice
Can be printed and mailed, faxed or
transmitted electronically
Accounting records updated

19

Payment
Payment may be physical check or
electronic
Cash debited and customer account credited
Quick processing avoids credit check
problems

20

Sales Order Entry in SAP R/3

Sold-to party
P.O. Number
Required Delivery Date
Material
Order Quantity

21

Master Data
Master data is stored in a central database
that is accessed by all modules
Customer Master Data and Material Master
Data are primary data sources for Sales
Order Processing

22

Organizational Structures
Organizational structures allow the R/3
system to control the sales order process
pricing, minimum orders, etc.
Distribution Channel defines the way that
materials move between the company and
customers
Wholesale Distribution Channel
Direct Sales Channel
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Document Flow in SAP R/3

All documents related to

original sales order

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Document Flow
Sales order process creates numerous
documents
- Sales Order
- Delivery
- Goods Issue

- Invoice
- Payment
- RMA

Document Flow links all documents related

to a sales order
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Discounts in SAP R/3

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Discount Pricing in SAP R/3

R/3 system can be accommodate various
discounting schemes
Calculates correct discount based on
customer and material

27

Integration of Sales and

Accounting
Sales order processing transactions make
appropriate accounting entries at time of
transaction-automatically

28

Customer Relationship
Management (CRM)
ERP provides means to manage all data relating to
a customer to improve the quality of the
interaction
CRM Activities include:

One-to-One Marketing
Sales Force Automation
Sales Campaign Management
Marketing Encyclopedias
Call Center Automation
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CRM Benefits
Lower Costs due to better use of sales and
marketing resources
Higher Revenue by improving the
effectiveness of marketing efforts
Improved strategy and performance
measurement by changing management and
staff focus
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Chapter Summary
Fitter Snackers unintegrated information
systems lead to inefficiencies and reduced
customer satisfaction
An ERP system like SAPs R/3 views sales
as a process, providing timely, accurate data
and automating error-prone tasks

31

Chapter Summary
Configuration decisions must be made
during installation to match the companys
practices and policies
The ERP systems central database
maintains master data used by all areas of
the company
CRM software builds on ERP data to
improve marketing effectiveness
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