Minimum Advertised Price (MAP) – Is Monitoring Beneficial?

MAP, minimum advertised price can be defined as an agreement between suppliers and retailers that stipulates the lowest price that is allowed to be advertised on given items. The MAP policy is especially critical for manufacturers who sell products for online reselling by third parties. This has become very important considering that consumers now conduct online and mobile comparisons of prices before then can make a purchase. The MAP policies can also be helpful for small businesses in terms of competing and selling as compared to engaging in price wars.

Minimum advertised pricing, however relates only to advertised pricing. This essentially means that you get limited to the price that you can advertise on MAP protected products, but you can sell the products at a price of your choice usually guided by MSRP, the manufacturer suggested retail price. Retailers can incur fines and penalties from suppliers if they end up violating the MAP contracts. The manufacturer has the legal right to withdraw products from stores that violate and even impose restrictions that they don’t sell the products again.

MAP monitoring

One of the best ways of protecting your brand and also maintaining seller profit margins is by monitoring compliance of the MAP policy. As a distributor or brand you can use the monitoring to discover violations so you can take necessary actions. The monitoring is also important in helping you know whether competitors are violating agreements. Below are some of the major benefits of having MAP monitoring.

1. It offers manufactures the valuable yardstick they need to assess prices across the retailers. On the other hand the monitoring also gives the retailers the valuable yardstick to see what the competition is charging for identical products.

2. It helps in the prevention of unseemly discounting that could end up lowering the product value in the customer’s eyes. Manufacturers are able to keep the brand image protected using the monitoring so that no one violates the agreements.

3. MAP helps in keeping price wars at bay so that products do not end up getting devalued. The policies level out playing field as far as efficiency and operational costs go for all including retailers that need to maintain their good reputation among customers.

4. Monitoring procures evidence needed for proving the violation. The evidence can be used by the manufacturers to make other comply with the agreements. The information gathered through MAP monitoring is also used to renegotiate manufacturer or supplier pricing and can still be used in following up to see whether compliance occurs as agreed.

The truth is that it can be very tricky for retailers and manufacturers to effectively manage and monitor pricing rules and violation impacts if they do not have the right tools to do so. It is for this reason that MAP monitoring tools have been developed to help ease checking and assessing price compliance to maintain fair competition. Through a reliable system, you can identify and monitor as well as contact violators. You will get all the evidence you need to make a decision to improve the situation.