Accurately pricing your products will give your business a competitive edge in the market. Shoppers usually compare the price of products offered by different stores before purchasing. In an attempt to gain customers’ attention, retailers offer products at the lowest price and end up violating the MAP (minimum advertised price) policies that brands lay down. 

The breach hampers the brand’s reputation. Consequently, business gets affected when there are excessive differences in the pricing. MAP pricing policy came into existence to ensure equal and fair opportunities for all players in the retail business.

What is Minimum Advertised Pricing?

MAP is an acronym for Minimum Advertised Price. MAP is a predetermined minimum price of products that retailers can advertise. Price-wars can cause the brand’s product to devalue. Brands outline the prices and policies to allow retailers to make a decent profit. 

The MAP Pricing Policy only controls advertised prices- retailers can sell the products at a price lower than in MAP in-store. However, the retailer cannot display or advertise the lower price on any medium or online listing. A MAP price policy offers a uniform and appropriate profit margin that retailers must enjoy. 

For instance, when a tech brand determines that the MAP of the gadget is INR 1000. Retailers are bound to advertise the product at INR 1000. They can sell the product to their customers at an in-store discount. 

iMAP vs MAP Pricing

The terms iMAP and MAP are not much different. However, the difference lies in the store location and the type of products. 

iMAP is an acronym for Internet Minimum Advertised Price. Brands draft the iMAP policy for the products sold on eCommerce stores or websites online. This policy is used to outline the advertising price for webshops that promote online.

While MAP Policy focuses primarily on offline advertising like catalogues, newspapers, tv commercials, billboards, etc., iMAP focuses on online advertising.

Consequences of Advertising a Brand Products Below the MAP:

The relationship between a retailer and a brand gets hampered when retailers fail to adhere to MAP policies. If a retailer advertises the products of any brand below the Minimum Advertised Price, the brand can legally withdraw the products from the retail store. The possibility for future sales also gets constrained, as brands may refuse to partner with the particular retail store again. 

Benefits of MAP Policies for Brands:

The MAP pricing policy informs retailers about the lowest trading price for products. Also, customers are aware of the actual value of the product. Adhering to MAP policies enhances transparency in business and builds trust in the customers. 

Moreover, adjusting the MAP policy is essential when a brand launches new products or new versions of the same product. The product life cycle will determine the changes in the policy. If the MAP policy is not modified in due time, the retailer will struggle to sell the existing stock. 

Here are a few reasons brands must implement the MAP pricing policy across every sales channel.

Protect the brand:

The value of a brand or product lies in various factors, among which pricing is a significant one. Customers tend to compare the price of products on multiple platforms and in different stores before making a purchasing decision. Thus, retailers are usually tempted to advertise and sell the products at a lower cost to attract in-store footfall. Moreover, some stores lower the price of products to clear out the stock or boost sales.

However, when lowering the product prices, the brand’s value diminishes in the eyes of the audience. Such practices have harmful impacts on luxury and premium brands. Thus, brands need to take control over the prices of the products. 

Protect the retailers:

When one seller sells the product at a lower price, the retail will attract more customers. As a result, other retailers will be forced to lower the costs to stay competitive. The war might eventually destroy the retail margins. The harsh consequences may result in the retailer not stocking the specific brand’s products altogether. 

Thus, MAP policies help in protecting the interests of the retailers. Moreover, it creates a healthy bond between brands and retailers and resellers. When a trustworthy bond is in place, the retailers can access new products earlier than the others and even enjoy additional benefits. 

Increase the number of sales channels:

When a brand tries to protect third-party retailers’ margin levels genuinely, more and more channels and sellers will be willing to stock their products. A MAP policy creates a fair and equal field for all retailers. Thus, small as well as big retailers advertise the products at the same price. 

Since the product is available on multiple sales channels, the brand and retail stores will be more successful, driving maximum sales. Having a MAP Pricing Policy in place is an excellent omnichannel sales strategy. 

Analyse performance accurately:

Brands can analyse their product performance when every retailer operates within the same price range. Since the price range is constant and customers will not make decisions based on price, brands can evaluate the other factors that contribute to the sale of the products. Brands can get insights into consumer behaviour, best field marketing strategies, and retailer performance. They can make better decisions based on the evaluations. 

Conclusion

MAP policies give brands and manufacturing businesses more control over the price of the products. As a result, it takes away the power from a few retailers monopolising the entire market. However, retail stores have a complete freedom over utilising retail merchandising strategies, deploying store promotion tactics, etc., to drive footfall into the store.