What Is MAP Pricing?
In this day and age, competition is stiff in almost every industry. While it is healthy as it breeds innovation and seeks to protect the consumer, the price steadily bobs down, proving it difficult for companies and retailers to sell the products.
However, when it comes to the price of the product, there is the issue of MAP pricing, Minimum Advertised Price. The manufacturers of goods often set and bind a retailer to advertise and sell the products.
The team from Brand Alignment, a leading service provider in the industry, provides vital information on the subject matter. In this article, we will be breaking down what MAP pricing (see the Brand Alignment MAP Pricing) is, how it benefits or hinders, who makes use of it, and its importance to retailers.
What Exactly Is MAP Pricing?
MAP Pricing is the lowest price that a retailer advertises a good to be sold in its most basic form. The price at which a good has been advertised doesn’t relate to the price it would be sold.
Any reputable company looking to sell its products and make a profit has a MAP policy. Manufacturers conduct considerable research to identify and create the ideal MAP guidelines for their products. Companies keep an eye on the market for violators of their MAP policies and pricing models to protect their interests, branding, and final price.
The Benefits Of Having A MAP Policy
The current market has taught us the importance of branding and messaging. Your brand identity determines your share of the market, level of exclusivity, and the profit earned. Companies building their brand or already knowing its value will have a MAP pricing in place.
Here are some of the benefits of MAP:
- Protection of the market’s perception. A company has considerable control over how the market perceives the brand.
- It doesn’t affect sales. In the end, MAP solely affects the advertised price. Retailers have the leeway of selling the product at whatever price they choose.
- Standardization. Consumers shopping for the product statewide or nationwide can ‘expect’ a similar price.
- Protect profit margins. While some retailers may argue about the issue of competition, they cannot complain of the minimum profits guaranteed thanks to the use of MAP Pricing.
The Cons Of Having A MAP Policy
As stated earlier, the MAP hands over control to the manufacturers. By following the policy, retailers have their hands tied. If the retailer uses unique marketing strategies, they might have to customize them again to avoid violating the terms of the policy.
The Legality Of It
If you are a manufacturer or retailer operating in the US, you should know that the use of MAP is legal and binding. However, you might encounter some minor variations if you are operating across States. To be an authorized seller of a company’s products, you will be required to sign a contract to the same effect.
However, the use of MAP pricing policies does not apply in Europe. Retailers are allowed to determine the prices of the product they sell.
MSRP, A Closely Related Term
While we are on the matter of retail price, we should mention another closely related term, MSRP. The abbreviation stands for Manufacturer’s Suggested Retail Price. The MSRP represents the price that the manufacturer believes the good/ product should be sold.
The difference is in the interpretation. For MAP, the manufacturer addresses the issue of advertising/ marketing of the product while MSRP guides retailers on the price of the product.
In addition, the MSRP is shielded by the MAP pricing plan. For a company looking to sell a premium product, significant discounts hurt the branding and ultimate message to the consumer. The consumer opines that the product doesn’t match the MSRP.
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The first step in removing unauthorized sellers is spotting them on your listings and that is exactly what the Brand Alignment Monitoring Dashboard will do for you. With price updates every 3 hours and inventory totals for every seller on every listing, you will get the most complete picture possible of your brand on every major online marketplace.
Of course, the most important step in removing unauthorized sellers is prevention and enforcement. This is where Brand Alignment is leagues above the competition when it comes to the best Amazon map enforcement software.
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Online Stores and MAP
Does MAP policy apply to online stores? If you have ever used one, you might have figured out that the price displayed by online retailers is at times significantly lower. Online retailers are able to make use of a loophole that was later on validated by the Federal Trade Commission.
It was ruled that the price displayed by online stores doesn’t count as advertising and is therefore not bound by MAP pricing policies. However, the price of goods in a shopping cart of online retailers will match that of a physical store made from brick and mortar.
Since we are talking about online stores, we must mention one of the biggest stores in North America, Amazon. It should be noted that Amazon does not enforce the policies of MAP pricing on its platform.
Does it mean that a company has no power over the advertising of its products? By no means! All that it means is that a manufacturer has to monitor the platform. If you find a MAP violation, you can make Intellectual Property complaints. It is also the onus of the manufacturer to identify the violator and send them a ‘cease and desist’ notice.
Penalties for violating MAP guidelines
If a retailer advertises a product below the MAP pricing, there are several actions that the manufacturer can take:
- The manufacturer can choose to withdraw their goods from the store and ban the retailer from selling their products again.
- Some manufacturers request a refund of co-op funds; these are funds/ promotional money that manufacturers offer to retail partners to help in the advertising and marketing of the products.
It is recommended for retailers to follow the policies of the MAP. Not only does it prove your integrity but it also builds your reputation in the industry.
Are you looking to enjoy increased sales and less diverted revenue from your brand? Call upon the experts at Brand Alignment. As a premier service provider in the industry, we make use of modern development techniques and approaches to optimize your online sales and protect your brand from any violations.
With a background in data, e-commerce, and technology, our experienced team is the best for your needs. We provide our clients with unique, tailor-made solutions that are guaranteed to meet their exact needs.
Get in touch with us today and get a quote for our reputable services (see guide to price matching software).
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