MAP stands for “minimum advertised price” of a product. This is the price that a brand sets as being the lowest price that can be displayed or advertised by retailers. However, it is vital to note that the retailer may sell at any price in the store. Hence, a MAP policy is used to ensure an even playing field amongst retailers that want to drive margin or volume, whilst ensuring that the brand’s product is not devalued by a constant price-war.
In the case that the retailers do not comply, and advertise the product below the MAP, the manufacturer can legally restrict retailers from selling that product. They can also simply refuse to replenish their supply when they have sold-through. It is best practice to adhere to the MAP price for building a trustworthy relationship. However, to do this, it requires both sides to play-ball, and update the MAP regularly in-line with the products current popularity and relevance. When a trustworthy relationship between retailer and brand is formed, it can also help in retailers getting access to new products earlier than expected along with other perks.
Why is MAP relevant for brands?
To start with, the key benefit for a brand is the protection that the MAP provides to their brand-image. This is particularly important when the brand has no direct relationship with the consumer, as retailers protect manufacturer pricing. Under a MAP agreement, retailers are informed of the lowest trading price they can display for the product, and as a result, they will often set a minimum trading price for that product across their promotional calendar. This also helps customers in being aware of the true value of products and makes it more transparent for customers to identify fraudulent products.
Benefits of MAP policy:
- Brand protection such as brand image, product quality
- Avoid price wars
- Legal right to restrict retailers if they do not comply
- Maintain seller margins
It’s vital for brands to ensure that they have a thorough MAP policy that addresses all their issues. The retailers that are good and are trustworthy partners will appreciate and like that you have a policy. This is because they know that they can remain competitive on price with larger retailers. Once you have a MAP policy, it’s no longer a mere “suggested” price but rather an enforceable price. However, it’s important to adjust your MAP policy alongside your product life cycle. If you launch a new-generation but do not adjust the MAP price for the previous-generation product, then your retailer will struggle to sell-through his old-stock.
As we’ve mentioned trustworthy retailer relationships are desired, but also hard to achieve. Our MAP platform can help to eliminate price-violations and issues before they get out of hand. By identifying individual product and retailer price-drops, you can get ahead of the curve and protect your retailer relationship and brand-perception before it’s too late.
Benefits of using a MAP platform
ChannelSight works with brands and retailers worldwide, hence we have a world-class MAP platform. It tackles the key pain points associated with transparency and keeping a track of your wider product portfolio. Even if you don’t have a MAP policy, our suite can easily help you to get started and monitor promotional friction in e-tail. Some of the key benefits of using our MAP platform include:
- Easily identify products in-retail
- Manage key out-of-stock products
- Track price leaders
- Monitor price fluctuations during promotional periods
- Analyze the impact of price on conversions
- Remove performance blockers within your Where to buy program
- Compare your pricing strategies to your other retailers
This can help your brand gain additional control and more data visibility to help avoid price cannibalization and control brand protection. Our series of reports also allow you to identify coverage issues in retail. Pair this with our Where to buy services can help you identify dead-ends in your conversion funnel. Speak to one of our experts today to learn more about MAP.