Minimum Advertised Price (MAP) is the minimum retail price the manufacturer sets for its product that resellers or retailers agree not to go below in advertisements. However, retailers may offer the product below the MAP by using discount coupons and offers. In simple terms, MAP is the lowest price a retailer can show online or in an advertisement, though it does not refer to the lowest price retailers can accept in their stores.
Is the Minimum Advertised Price Legal?
Yes, under U.S. antitrust statutes, MAP is legal. It is not considered a form of vertical price fixation between retailers and manufactures because it allows selling below the set price. Hence, it is legal, and retailers have an obligation to strictly follow the MAP policy.
Benefit of MAP
Manufacturers set a MAP on their product to maintain a brand perception amongst consumers. MAP violation can have a devastating impact on a brand’s image. Consider this situation: a manufacturer discovers its $250 product priced on Amazon at $50. This deep discount may destroy years of hard work that established the manufacturer’s quality brand image and reputation in the market, essentially leading to brand erosion. With a MAP policy, unauthorized retailers won’t be able to destroy the brand image and negatively impact sales from honest and compliant retailers who respect the policy.
MAP violation can have a devastating impact on brand image.
Retailers usually try to be very price competitive to win market share. MAP helps prevent price wars between retailers and helps maintain good margins. However, with MAP policy, retailers shift their focus to factors such as after-sales service, shipping and other customer-centric features. This is beneficial from the consumer’s point of view, driving them toward retailers who deliver an exceptional customer experience and shoring up brand loyalty. It’s essentially a win-win.
How Is MAP Enforced?
The process to enforce MAP is to detect all MAP violators across various marketplaces and advertising platforms, proclaim MAP enforcement policy and, if needed, ban non-compliant retailers from selling certain branded products. This means it is crucial for retailers to use MAP compliance monitoring, analyze data and produce accurate evidence that swiftly reports MAP violations across multiple platforms.
GrowByData’s competitive price intelligence solution solves this retail industry problem. Along with our powerful price intelligence for your repricing strategy optimization, our service provides the added bonus of resolving key challenges to MAP violation enforcement. Here’s how:
- Ensures Accurate Evidence: Our solution accurately matches your products at the variant level with other retailers across various platforms. We ensure this accuracy with a double-layer Data QA Process that incorporates both AI and human inspection.
- Monitors Across Platforms at Scale: Our solutions support multiple platforms, like Google Shopping, Google Ads, Amazon and Walmart, along with custom platform implementation per your need. Alongside these options, we can scale operations for various schedules and frequencies.
- Swift Map Violation Alerts: Our solution quickly alerts you with accurate MAP violation reports separately in Amazon and Google. You can track violations in an SKU by different retailers, as well as violations by each retailer on multiple products. You can send these findings directly to related parties for regular MAP enforcement.
Check out our MAP Violation Solution for more details.