Either you are a brand or a retailer, you probably have heard about MAP, or Minimum Advertised Price. To understand the concept, think about the increasing number of online shops emerging all over the world. Globalization is bringing more and more competition and therefore the same kind of products can be obtained by a huge number of different retailers. If you are a brand, it’s amazing that your product is being sold by different stores, moreover, you can easily lose the visibility of who and for how much someone is selling your product. To be aware of the distribution of your product is crucial for your brand’s image. Imagine someone is selling your product far below the price that your product is worth. That would damage your brand’s reputation and give the consumer an unfair impression about your brand and therefore impact the gains of your company. To avoid that, brands create MAP pricing policies for their retailers that establish the lowest price they should advertise the product.
Is MAP pricing legal?
MAP pricing policies are legal in the US, it’s usual to sign agreements about it between brand and retailer. Breaking the agreement can lead to consequences such as the termination of the economic relationship. In Europe it works differently, here the MAP agreements are illegal, which sometimes can lead to a continuous race for the lowest price.
Difference between MAP and MSRP
It can be easy to confuse MAP pricing and MSRP because they go by hand, but it’s important to be aware of the differences between both concepts. MSRP stands for Manufacturer Suggested Retail Price and it’s the other major pricing policy impacting on sales. MSRP is the actual price that a manufacturer suggests a retailer to sell his products, while MAP just refers to the advertised price, but not the final one. As its name says, it’s just a suggested price, suppliers or manufacturers are not allowed to provide their distributors with store selling prices, but only recommend them without obligation.
Reasons for monitoring MAP
As we have seen MAP pricing can be quite controversial, but also an important element to be aware of when selling a product. Respecting MAP doesn’t just build a better relationship between brands and retailers, but also helps to avoid pricing wars about becoming the lowest seller.On the other side, if MAP is not respected, conflicts may appear for your brand. Since the advertised price does not match with the image of your brand, it can be devalued and give the wrong impression to potential customers. That’s why it’s crucial as a brand to know all the information about the retailers you are working with and discover if there are unauthorized sellers. All this is just possible with the right map monitoring tool for brands, which is going to allow you to always have under control the changing prices and sellers of your product.