MAP policies are beneficial both to the brand and retailers. However, in the current highly complex retail scenario, competing on price has become inevitable. Even if a brand has a good MAP policy, enforcing it can be a challenge.
Why is MAP Necessary?
Minimum Advertised Price or MAP is an amount defined by the supplier/brand. Each product that a brand sells through its network of distributors/retailers should have a MAP. This price is a guideline for retailers, it tells them that they should not advertise these products below their MAP.
MAP Pricing Allows Flexibility
Note that MAP is advertised price, not the actual price. Retailers are actually allowed to offer discounts, promos, etc that lets the buyer purchase the item at the final step at below the MAP. However, resellers cannot Advertise the product at prices below the MAP.
What Constitutes Advertising?
In the context of MAP, you cannot display the price of the product at below MAP amount in your promos, ads, in your online product listings, product pages etc. You may announce a discount that may be applied when the payment is processed. However, on the product page, you should not display a below MAP price.
Some brands may also choose not to allow in-cart discounts. That depends on how you define your MAP policy and how much pricing flexibility you are willing to allow for your resellers.
How MAP Pricing Helps
MAP helps both the brand and the reseller.
- For the brand
- MAP Pricing ensures that customers do not consistently see the brand’s products advertised at very low prices, significantly below regular pricing
- Consistent low pricing devalues a brand’s image. Customers may begin to think that the products are not actually worth the regular price
- MAP policies ensure that doesn’t happen
- For the resellers
- MAP tells them that the brand wants to ensure a level playing field for all its resellers
- MAP clearly defines a limit on price wars for the product
- Retailers feel assured that a brand with a MAP policy will ensure fair competition and will take action on MAP violators
How to Enforce MAP Pricing
- Explain to your retailers that MAP pricing policies are beneficial both to them and to you as the brand
- Clearly define compliance rules and consequences of violation
- State how you will take action. For instance, you may
- First, send a notice of the violation to the offending reseller
- Include the product SKU, UPC, a screenshot of the product page, and other details
- Tell them this is the first warning notice
- If the reseller does not take action, send a second escalated warning note telling them that their reseller agreement could be canceled
- If the seller still does not respond, you can proceed with the action, like canceling certain privileges or even terminating your relationship with that reseller
- Keep your language in the compliance guidelines pleasant, but clearly convey the consequences of MAP policy violation
- Always update any changes in the reseller contact information in a centralized database
- If you make any changes to your MAP, immediately notify your reseller network so that they can make adjustments
- If you have a distributor network, make sure distributors provide a map compliance guideline to each reseller they work with
- Take action quickly on map violators
- Use an automated map monitoring software
Map Monitoring Software
Manual map monitoring is very difficult. Make use of good Price/MAP monitoring solutions available as cloud services. Solutions like the automated MAP compliance software from Intelligence Node constantly monitor your product pricing and quickly alert you to any map violations.
You can even program these solutions to automatically send notifications, warnings, etc to the seller who is violating your MMAP policy.
These software products help make map enforcement easy and consistent.