We write regularly here at TrackStreet about the importance — the necessity, we would argue — of drafting and prominently publishing a Minimum Advertised Price policy to protect your brand. You probably already know several reasons a MAP policy can be so important for your company, but a well-drafted policy can also offer some less obvious but equally important benefits.
The key to that last statement, though, is “well-drafted.” Not all MAP policies are created equal. So if you want to give your brand the strongest possible protection against price erosion, poor customer experiences from rogue resellers and other potential damage to your company’s reputation, you can’t simply dash off a few bullet points and call it a Minimum Advertised Price program. Your MAP policy should have at least these eight elements.
8 THINGS YOUR MAP POLICY HAD BETTER INCLUDE
- Language explaining that this is a unilateral policy and not an agreement.
The first thing to consider when drafting your MAP policy is that you must state clearly you are not attempting to bind any distributor or reseller to a two-way agreement for adhering to your minimum advertised price guidelines. Such an agreement might well be considered a violation of antitrust laws.
So before focusing on the business details of your MAP policy, make sure that the document’s language clearly describes the policy as a one-way communication from your company to your resale channel — and not a contract or agreement.
- Language explaining that the policy refers to advertised prices only, and not to actual sales prices.
A MAP policy sets only the pricing floor below which a manufacturer or brand does not want its resellers publicly advertising its products. The policy does not limit those resellers from actually selling those products for less than the MAP-approved prices.
Your policy should empower authorized resellers to sell your products at whatever prices they wish once they are communicating directly with their customers — as long as all of their advertised references to your products (whether online or in printed materials for their brick-and-mortar stores) do not dip below your MAP policy’s prices.
- A positively worded, reseller-friendly statement about the reasoning behind your policy.
Here is an opportunity both to offer clarity about why your brand is putting a MAP policy into effect and to demonstrate to your resale channel how it can benefit them.
Assuming your MAP policy will be supported with an intelligent and effective system for compliance enforcement, it will also serve your authorized resellers who adhere to your MAP pricing. That is because the policy, backed by your enforcement of its guidelines, will protect them against rogue resellers who would try to unfairly undersell them.
- An up-to-date list of all products covered under the policy and their MAP-approved prices.
This can be as simple as a spreadsheet embedded onto the page of your website where you maintain your MAP policy. But regardless of how you maintain and publish this list, though, what’s important to remember is that you must always keep it up to date.
When you add new products or product variants, change the names of existing products, create new bundles, etc., you should build into your rollout process a must-do action to make sure the latest information is reflected in your published MAP policy. You might also want to make it standard practice to send notifications to your authorized resellers anytime you make a change to your MAP list. You can’t expect your resellers to take your MAP program seriously if your company fails to give it the ongoing attention it requires.
- Your advertising guidelines for resellers.
If you want your resellers to honor your policy’s guidelines wherever they advertise your products, then your policy should clearly and explicitly define the details of what you consider “advertising.”
You’ll need to consider, for example, whether to allow an online retailer that publishes your product’s pricing on its main listing page at your MAP-approved level, but then sends an automated “bounce-back” email to prospects showing a discounted price. If you determine this falls under your brand’s definition of advertising — and is therefore a violation of your MAP policy — then your policy should state this to deter such violations.
- Your enforcement policy.
Your MAP policy should also include a policy-enforcement section that clearly states what actions you consider to be violations, and how your company can be expected to address such violations.
Enforcement measures might include, for example, canceling a violator’s pending orders for more product, suspending a dealer’s account, etc.
- An FAQ section, with answers to likely questions about your MAP policy.
Perhaps your retailers will bundle several of your products together. How will your policy address bundled pricing, particularly if the reseller prefers not to list the individual prices of the bundled products?
How will your MAP policy treat customers who use a gift card, storewide coupon or other promotion? Will it be considered a violation if it brings your product’s final cost any amount below its MAP-approved price? Will it trigger a violation only after bringing the total cost more than a certain percentage below its MAP level? Will you allow all promotions as long as they don’t change the advertised price?
Your existing resellers and retailers just investigating your products and considering adding them to their lines will have questions like these. Your MAP policy should make it easier for your resale channel by preemptively thinking through and then answering such questions publicly.
- A contact at your company (or at your MAP enforcement partner) to direct questions regarding your MAP policy.
For questions not addressed in your MAP FAQ section, you should include in your written policy a contact (an individual or a department) where a reseller can go to learn more about your MAP policy.
A key, however, is that none of your employees should ever discuss selling price as part of any of those conversations. Any questions about price should result in a referral to the MAP policy itself.
YOUR MAP POLICY SHOULD ALSO BE PART OF A BROADER BRAND PROTECTION STRATEGY
Of course, the list above is not exhaustive: Your MAP policy will likely need to include several additional details based on your industry, the complexity of your product line, your distribution and resale channels, and other factors.
And just as important, your MAP policy — no matter how well-drafted — cannot be successful in a vacuum.
To protect your brand’s reputation and preserve your relationships with your valued dealers and resellers, your MAP policy should be only one component of a comprehensive brand protection strategy. If you are interested in learning how to deploy the most effective solution for MAP monitoring and enforcement — and overall brand protection — schedule your free TrackStreet demo.