Brands invest a lot of money in advertising and marketing to make sure they identify their product with specific values, such as prestige, differentiation or quality. Apart from using their advertising departments, the sales department is responsible to do a MAP price control. But what is the MAP?
Europe vs. USA
The acronym MAP stands for Minimum Advertised Price, and it is the minimum price that brands recommend to distributors.
This minimum price must be respected by retailers to avoid brand devaluation. While in the European Union the MAP is a suggestion, in the United States, not respecting the MAP is considered a violation of the agreements signed by the brand and the stores. The brand company could use the juridical services to take legal actions.
Establishing a minimum price is vital for brands to avoid starting a price war. These competitive clashes between companies to gain more market share even at the expense of their income seriously damage the user’s perception of brands, which devalues them and reduces the added value that the marketing department is supposed to give them.
MAP price control is a necessary tool provided by brands to e-commerce to make competition between them as fair as possible and allow small e-commerce businesses to compete against larger companies.
Monitor your products
With the use of price monitoring tools you can observe the evolution of the prices of your products in different e-commerces and countries. This system allows you to automatically check which stores do not respect the minimum price you have set for your products.
The application allows you to access a history of reviews that allows you to evaluate and analyze what the consumers’ perception of your products is in order to enhance the best features and improve aspects that are not so popular.
As a brand, you want the stores that distribute your product to respect that agreed minimum price so that your brand image is not devalued. But it is also necessary to agree on a maximum price or “price ceiling” with e-commerce, since the performance of your products can be affected by an increase in price, reducing the visibility of those items of your brand.
A constant fluctuation in the prices of your products will make a bad impression on your consumers, as they feel that as a brand you are not able to maintain a reputation for your items.
By using product monitoring tools you can observe which shops do not follow your prices and develop a strategy to combat them. The first step is to contact the pricing department of the shop that does not respect the MAP to review with them the economic agreement you have and ask that it be respected.
Thanks to the monitoring software you can know what percentage your brand occupies of the total catalogue of the store. With this information, your negotiating power increases, as you have a lot of influence on the sellers’ catalogue in case the shops still do not respect the minimum advertisement price.