Minimum Advertised Price (MAP) is the price set by brand and manufacturer on its product which resellers or retailers agree not to advertise below. This means retailers cannot display or advertise their price below MAP. However, the retailers can offer the price below MAP using discount coupons and offers. In simple terms, minimum advertised pricing (MAP) is the lowest price a retailer can show online or in an advertisement. It is essential to clarify that it does not refer to the lowest price retailers can sell in-store.
Is MAP legal?
MAP is legal under U.S. antitrust statutes. It is not a form of price fixation as it does allow the retailer to sell below the MAP but only has an obligation in terms of advertising price display.
Benefit of MAP
Manufacturers set a MAP on their product to maintain brand perception on its consumers. MAP violation can have a devastating and damaging impact on brand image. Consider a situation where you find your product of $250 being priced on Amazon at $50. It may destroy years of hard work done to establish a quality brand image and reputation in the market, and essentially lead to brand erosion. With MAP policy in place, unauthorized retailers won’t be able to destroy the brand image and negatively impact the sales of its honest and loyal retailers.
MAP also helps prevent the price war between retailers. This helps the retailer to maintain a good margin in such products. Retailers usually sell products at a very low price to be competitive. However, with MAP enforced, to be able to sell more, good retailers would now focus on factors such as after-sales service, shipping, and more customer-centric features. This is beneficial from a consumer point of view and will drive consumers towards retailers who deliver exceptional customer experience.
How to Enforce a MAP?
MAP is important for manufacturers and consumers. In today’s retail world, it is difficult to continuously monitor and enforce MAP across different channels. Marketplaces like Amazon, Walmart, eBay, etc. and Advertising platforms like Google, Bing, etc. may not provide any assurance to brand and manufacturer to enforce MAP agreement on their platforms. Thus, manufacturers and authentic retailers must take it upon itself to curtail MAP agreement violations on these various sources.
To address the MAP violation issues, the manufacturer needs to identify all MAP violating re-sellers in different marketplaces, proclaim the MAP enforcement policy, and if needed should prohibit these retailers from selling products. When a MAP violation is discovered, it is important that manufacturers constantly monitor and track down the prices from all available channels and act accordingly.
GrowByData provides the solution to enforce MAP that ensures a level playing field by monitoring competitors and marketplaces for MAP violation.