The competition is tight in today’s market. The leaders of today’s marketplace, such as Amazon, Walmart, and eBay, constantly change their product prices. If you are a manufacturer, it is necessary to impose the minimum advertised price (MAP) policies and find a way to set them. Let us take a deep look at MAP monitoring.
MAP stands for the minimum advertised price monitoring and is a set of policies imposed by manufacturers to determine the minimum selling price retailers can sell their products. The manufacturer can change the costs of their products at any time, and retailers should obey the MAP policy. If manufacturers find MAP violations, they can cease their business relationship with a particular retailer.
Practically every product in the global market has MAP pricing, and these regulations are varied based on government law. Now that you know what MAP is, let us discuss its importance.
Customers tend to compare the prices of products before they make a purchase. Imagine this scenario; a customer is looking for a specific hair product that contains high vitamin C. They go through an “A” website and find the product. The product price is higher than expected. So, they check on different e-commerce websites “B,” and the product is listed below the MAP (Maximum advertised price). The customer thinks it is a good deal and buys the product. Let us consider the opposite scenario. What if the customer thought that since the product price was low, it would be of low quality. This thought would negatively affect this specific product and the image of the branding.
Manufacturers are always keen on their brand image. Nowadays, people tend to assume that high quality means more expensive and low-quality means less costly.
Obviously, as a manufacturer, the critical objective is to improve the sales of the product and increase the revenue. If retailers sell the product below the fixed maximum advertised price, they violate MAP policies. If needed, manufacturers can break the business relationship with the retailers and file a civil case on the issue.
MAP monitoring can resolve this whole issue. As said above, the main objective for the manufacturer is to increase revenue. MAP monitoring helps to achieve that by monitoring the sales history of the product prices and giving you the exact data needed to assign the best price possible.
MAP monitoring helps to protect your brand value. Retailers and resellers may try to sell your products at the lowest price, rather than the minimum price if you don’t place proper MAP policies.
Now you have an idea about the MAP and its importance. It is also necessary to understand how to detect MAP violations. In the coming section, you will get a clear idea of MAP violations and how to monitor them.
You may be wondering how resellers and retailers consciously and unconsciously violate MAP. It may not look like they are violating MAP policies, but there are ways to violate the MAP policies. Here are some of the ways that MAP violations take place:
So, where do these violations occur? The answer may surprise you. Most of the breaches appear on online retailers, such as Amazon, Walmart, and eBay. For example, in the year 2020, Nvidia released 30 series graphics cards. The starting retail price was $399. But the graphics card sold for more than $1000. Yes, there was and still is a semiconductor issue. But during that time, online and physical retailers started to bundle things, such as 30 series cards with old ten series cards. This is a MAP violation since Nvidia has no official bundle information.
Now that you have a basic understanding of MAP violations, let us discuss how to monitor MAP violations.
We have discussed MAP in-depth. You may wonder whether MSRP and MAP are the same? In the next section, we will briefly discuss the difference between MSRP and MAP.
Yes, MAP is entirely legal in the United States. Manufacturers from the United States follow MAP policies.
MAP is a set of guidelines imposed by manufacturers to determine the minimum selling price retailers can sell their products. MAP pricing is the lowest possible price for a product that a retailer can sell.
MAP stands for Minimum Advertised Price in the retail sector.
For manufacturers, MAP is an essential tool in their arsenal. It helps manufacturers control the pricing of their products and their brand image within the lifecycle. This article has discussed MAP, its importance, and the implementation of MAP policies based on the automation tool. This article hopes to provide an in-depth guide on MAP and its significance.