The MAP Policy Compliance (Minimum Advertised Price) is still the fulfilment of the roadmap used by brands to let sellers know what the minimum prices should be for their products. Compliance with these guidelines is of increasing concern to brands and manufacturers who are witnessing the disproportionate growth of online sales as they try to redirect their strategies towards omnicanality. With a specific price monitoring tool for brands it is possible for each manufacturer to check which sellers follow their recommendations and which do not.
Is it legal to enforce MAP compliance?
It depends on the legislation of each country, in the USA for example it is a common and legal practice with which manufacturers can force their retailers to follow their business practices, while in EU countries this is not possible and only the recommendation of selling price is allowed, but not compliance enforcement.
Factors to delimit your MAP policy
The definition of the MAP Policy of each brand is an internal work that cannot be ignored, however, the activity of the sellers to the end consumer, the retailers, the relationship between the two must be configured as a win-win situation in order for sales to be successful and achieve a benefit for both parties. When establishing the minimum selling prices for each product, the brand will obviously take into account both its costs and the intrinsic value of its product in the market. This is an arduous task that can even decide, in most cases, whether a product is released or not. How not to consider, then, how retailers act with these prices?
Without a doubt, the final seller will always be more receptive to sell a product in his online store with an attractive price, as well as good features that make it an excellent choice with respect to value for money. This can be considered when looking for minimum selling prices that are also beneficial for retailers. However, this is nothing more than a recommendation that some experts put forward as a cushion to avoid future conflicts with sellers. Ultimately, it may be necessary to make certain agreements and negotiate conditions.In the context of online commerce, MAP compliance is even more critical for brands. The online sales paradigm is characterised by the almost infinite number of sales portals in which your product may appear, and this represents a new risk, unembraceable in most cases by the manufacturers themselves.
Therefore, the risks of non-compliance with a brand’s MAP Policy are now palpable. How can we make it clear to the seller what happens if their minimum price policy is not complied with?. A fundamental part is to present all the information in a single document. It should detail what the relationship is between the brand and the seller, as well as the type of agreement they reach on prices.
The clauses for non-compliance with the brand’s MAP policy should make it clear what measures will be taken by the manufacturer when the case arises: possible withdrawal of stock, cancellation of the commercial relationship, economic sanction or even taking certain legal actions. It is recommended that this document specifies what types of commercial actions the seller can carry out with the manufacturer’s products. In this way you can limit promotions, offers and discounts that can be offered on your products by the retailer’s own initiative. It is a practical way of stemming the tide.
Relationship between MAP policy and brand identity
Experts are increasingly stressing the importance of minimum price policy as an influential factor in a manufacturer’s brand identity. Why? It seems clear that product pricing has always been a distinguishing feature for different brands. Hence, for example, luxury brands continue to be considered as such; price is a determining factor for the company’s image. With this assertion clear, the relevance of minimum prices in brand identity falls by its own weight. While it is true that, a priori, the minimum price responds only to the economic requirements of the manufacturer, nothing could be further from the truth, it can also be an important obstacle for consumers.
A fall in price, below the threshold allowed by the manufacturer, may have the opposite effect to that desired, by, for example, a certain discount or promotion. By exaggerating prices downwards, it may arouse suspicion in consumers who are loyal to the brand of a reduction in product quality.
It is true that lowering the price of a product can open new opportunities for potential customers who, until now, were not consumers of the brand. However, this does not always have to be a good strategy, since loyalty is precisely one of the most difficult objectives to achieve by firms, both in the digital environment and offline.In any case, this type of decision should only be made by your brand and the strategy you have set out in house. In no way should retailers be left with the possibility of playing with these concepts that directly affect the image of the manufacturer.
How to track each retailers’ prices
Any brand that already has a developed minimum price policy must face the arduous task of checking whether or not this is met. Only in this way can you have real control over the prices at which your products are sold and, therefore, execute the actions foreseen for non-compliance in your MAP Policy. Carrying out this control in the digital environment, as we have already said, can become a daunting task. In fact, it is virtually impossible to do so manually.
Price Monitoring Software implements the necessary technology to track the catalogues of each one of the retailers who sell your products and allow the variations they make on them to be recorded at all times. With Minderest’s MAP Policy Compliance tool, you can perform this monitoring in a way that is completely customised for your business. You will be able to establish as many alerts as necessary to keep track of the prices established by the online stores that sell your products.
Without a doubt, this type of technology has multiple advantages for brands and manufacturers as it allows them to obtain periodic reports with all this information in detail. Thanks to Minderest, you will always have first-hand information to maintain compliance with the demands of your brand with respect to sellers. Minderest’s MAP Policy Compliance software allows you to check at any time how retailers relate to the minimum prices of your products for a low monitoring cost.