Minimum Advertising Pricing (MAP) is a mechanism that puts all stores, regardless of size or online or brick and mortar, on a level playing field for selling a specific item. This states that a product cannot be advertised at a lower cost that the set MAP price, preventing large stores with the power of bulk buying from being able to underprice the smaller mom and pop stores.
The Issue –
The internet is a large place and preventing the policy violations can become a really big job. Keeping track of who is doing what can be daunting, if you don’t have the correct systems in place.
The Solution –
There are several ways to help stop this violation and help protect your MAP policy. Let’s look at a few.
1.Create a MAP policy and enforce it. You want to make a policy that has concrete guidelines. This will set out your policy leaving no ambiguity. This means you want to set out clear cut penalties for violations. You’ll also want to set out a definitive resolution outline, whereby a company can redeem themselves if caught violating your policy.
2.MAP monitoring. There are Map monitoring solutions and services you can obtain which will monitor the web or your specific retailers. Monitor frequently and when or if you find violations, act on them promptly. Don’t put off dealing with it. This sends a message that you mean what you say. Make sure that the enforcement of your policy is consistent for all retailers, large and small.
3.Keep up to date with your retailers. Make sure all contact information is current with all your retailers. Check names, emails and phone numbers often to ensure you are able to contact each retailer when necessary. You also want to make sure you update them regularly with any changes to the pricing for any products they may sell for you. This is not something you would want to put off until later, waiting until when you have several things to tell them all at once. If there is a price change, contact each retailer immediately and fill them in.
4.Explain the benefits. Talk to your retailers. Explain to them how this is a win-win for all concerned. By keeping a Minimum Advertised Price, not only does it stop pricing wars, but it also allows for the product to hold its value. By pricing a product below its actual value, consumers will begin to lose faith in the product being advertised. They’ll begin thinking it can’t have the quality as stated and be sold that such a low price.
5.Be selective. Manufacturers should be more selective in which retailers they work with. This will allow them to get to know their retailers and have faith in knowing they are following policy because it will benefit both the manufacture and the retailer. This kind of trust can also build loyalty in the long run, both ways. This is always good business.
This practice was put in place to help all concerned, from the manufacture, to the actual retailer to the customer. This helps the manufacture by not devaluing the item they are trying to sell. It helps the retailer by keeping everyone on that level playing field, so a large company can’t undercut the smaller guy. This also helps the consumer by making sure you are buying from a reputable retailer who will stand behind the product because they are working directly with and have a relationship with the manufacture.
There will always be retailers that sell below the MAP. However, by implementing some of the above ideas, specifically with MAP monitoring it may become harder to continue to get away with it. Everyone benefits from MAP in the long run. By implementing a policy and monitoring your retailers the gains are across the board for everyone.