MAP (minimum advertised pricing) policies are set by manufacturers for online resale of their products. This manages the minimum price that a retailer can advertise in various online platforms. These policies are critical for manufacturers not only to maintain the premium status of their products, brand name and image, but also to provide retailers with a fair business environment.
Offering the best deals
Nowadays, consumers can easily compare prices—always looking for the best deal, the best price for products online. Rather than allowing retailers to go into a price war, manufacturers set policies so they can compete fairly. MAP policy enforcement ensures that their network of authorized dealers can independently flourish in business.
Price wars averted
Retailers, especially small business owners, can actively participate in the market without the “bloodshed” of a price war against big box stores. For example, let’s say a small business owneroffers fair pricing and premium products, but a big box retailer offers the same—for a more competitive price.
The big box store gains a lot of market share despite the huge discounts it offers. Eventually, the small business owner suffers market losses and closes. Without the competition, the big box store inflates the prices.
Though retailers cannot aggressively compete through low price offerings, they can enjoy a healthy and fair business environment, whether they are a small business owner or a big box store. This highlights the importance of MAP policy enforcement.
MAP policies are not one-sided. Manufacturers and retailers can mutually reap the benefits with a shared commitment to uphold the policies.
The vendor has the responsibility to set reasonable and fair prices. Retailers, on the other hand, should conduct business in accordance with set policies. Only then can the policiesbenefit both the vendor and retailer.