Let’s do a thought experiment. One day, without any explanation, people shopping online at marketplaces like Amazon and eBay start seeing Apple products — iPhones, iPads, MacBook Pro laptops — advertised for far less than they’ve ever seen them available before. Half off. Two-thirds off. These items aren’t marked as “used” or “refurbished,” either. The ads and sales pages look identical to the ones the shoppers have always seen for Apple gear at these marketplaces — the only differences are the eye-popping, head-shaking discounts. What would happen?
At first, this would be great news for shoppers. Apple products would become the most talked-about items available online. They’d sell like, well, like Apple products. But then…
Eventually, of course, the gadget-buying public would start to wonder what was going on. After all, Apple is well-known as a premium brand. They owe a great deal of their success to the fact that they proudly charge more than their competitors for comparable items. Apple’s customers — more accurately, its fans — feel proud to own these products.
So if out of nowhere, and with no comment from Apple, its products were regularly being advertised at retail outlets for deep discounts, Apple’s perception as a premium brand would almost certainly start to weaken. This ongoing discounting of the product line would make people wonder if something problematic had happened to Apple.
MAP ENFORCEMENT SENDS THE MARKET POSITIVE SIGNALS ABOUT YOUR BRAND
Of course, this hasn’t happened to Apple — and it likely won’t — in large part because the company aggressively enforces its minimum advertised price (MAP) policy.
Apple’s retail partners want to continue carrying its product line, both because doing so increases their own perceived value to customers (that’s how highly regarded the Apple brand is) and because Apple provides just enough monetary incentives to allow retailers to make a decent profit selling Apple’s items. If one of these retailers tries to undercut the competition by advertising an iPad below Apple’s MAP-approved price for the product, that retailer would probably face some serious consequences from Apple.
Now, let’s assume your company isn’t Apple, and your products are not quite as iconic as the iPad. Here’s why effective MAP enforcement can be important for your brand, too.
Imagine a customer finds your product at Amazon from one of your resellers. This is the first time the shopper has encountered your product or your brand. In this instance, obviously, you are counting on your resale partner to persuasively and accurately represent you and your product.
But when the customer checks the price of your product against similar items, which Amazon helpfully displays alongside yours, she finds that your item is by far the lowest-priced. In fact, it’s less than half the price of the other products. Maybe two-thirds less. Assuming you have a MAP policy in effect, this reseller has almost certainly violated it.
Here’s the key takeaway: This discount is so steep that instead of being a reason for your potential customer to celebrate — and to buy from your reseller — it raises red flags about the quality of your product.
In other words, intelligent MAP enforcement isn’t just about protecting your margins. It’s about protecting your company against being classified by consumers as a low-end brand.
YOU CAN’T AFFORD TO BE LAX OR INCONSISTENT IN YOUR MAP ENFORCEMENT
Protecting your company’s reputation for quality and your brand’s perceived value is one more reason that smart MAP enforcement is not a nice-to-have — it’s a must-have.
And if your products are being sold online through a large network of resellers, your MAP enforcement system needs to be automated. It’s the only way to be certain that your products’ advertised prices are being monitored across the entire Internet at all times, that all MAP violations are immediately and automatically addressed — and that a rogue retailer isn’t able to undermine your brand’s long-term reputation to make a short-term sale.