Creating a Minimum Advertised Price (MAP) Policy
As strategically important as a minimum advertised price policy is to a manufacturer or brand—for protecting the interests of resale partners and guarding the brand’s own reputation, to name just some of the benefits—it’s also important to understand that not all MAP policies are created equal.
Developing and implementing a minimum advertised price policy is a critical step that brands should neither rush through nor undertake without expert guidance. An improperly worded or poorly enforced MAP policy can create more harm than good for a manufacturer or brand.
So if you’re planning to craft a minimum advertised price policy for your company, we at TrackStreet highly recommend you incorporate the following best practices.
1. Tell your resellers that the policy is in place to protect them.
Your minimum advertised price policy will of course establish guidelines you expect your resellers to follow with regard to how they advertise your products. It should even outline the consequences you’ll enforce for failing to follow those guidelines. But that doesn’t mean the policy needs to read like bad news for your resellers, or that your company views them as adversaries.
You are drafting this policy in large part to protect the interests of your resale channel, after all. So state that clearly in the policy—ideally, right in the introduction.
Some of the most effective minimum advertised price policies we’ve reviewed take this approach, opening with a plainly worded statement explaining the company believes it can best serve both its own interests and the interests of its retailers or dealers by implementing these minimum advertised prices across the entire resale channel.
Indeed, our own pricing policy templates, drafted by antitrust attorneys and which we offer to manufacturers who use the TrackStreet MAP enforcement platform, open with language to the effect that the policy will allow dealers to earn desirable profit margins on the company’s products.
Open your MAP policy by showing your resellers how both the policy serves both your and their interests.
2. Be clear about what constitutes compliance with your policy—and what doesn’t.
There is plenty of confusion, among both manufacturers and their resellers, about what constitutes an “advertised” price in a minimum advertised price policy. The question of where to draw the line becomes even murkier when a product is being sold online.
Some resellers believe that a “Click here for discount pricing” message would not constitute a MAP violation, as long as the price displayed in the ad itself or on the sales page was at or above the manufacturer’s MAP-approved level.
Some manufacturers aren’t sure themselves of where to draw the line, and a clear answer has yet to emerge from legal precedent to help settle the matter.
So as a manufacturer crafting and enforcing a minimum advertised price policy, it will be up to your discretion as to how you want to set your guidelines.
Will you choose to tell your resellers that publicly offering rebates on your products (which take the products’ true prices below your MAP levels) will be unacceptable? Will you allow your retailers to offer “See price in shopping cart” messages that then offer your products for below-MAP prices? Will you decide that your resellers may offer their customers financing on your products and will still be in compliance with your MAP policy?
Setting all of these guidelines will be up to your company’s discretion. But you can’t leave these questions for your authorized retailers to answer for themselves. You need to include a clear explanation of each of them, so your resellers know exactly what they need to do to stay on the right side of your minimum advertised price policy.
3. Automate the monitoring and enforcement of your minimum advertised price policy.
No matter how well you craft your minimum advertised price policy’s language, or how prominently you publicize it for your current and future resale partners, the policy itself won’t do your company much good—and could even be harmful—if you don’t also aggressively and consistently enforce it.
But this raises an important question: How can your company constantly track and monitor all of your products’ advertised prices, across all of your resale partners’ websites as well as all of the online marketplaces, at all times? Moreover, how can you ensure that even if your team catches a violation of your minimum advertised price policy, they will know exactly how to respond appropriately in that specific situation?
The resources—people, time, expertise—needed to effectively monitor and enforce a MAP program are simply too great for most businesses to manage the process in-house.
It simply does not make sense for a brand to assign dedicated teams to manually check-in constantly, around the clock, with every reseller to make sure none are trying to unfairly undersell their competitors by violating your MAP policy.
The best practice, instead, will be to deploy a fully automated MAP monitoring and enforcement platform—one that continually scours the Internet checking on how your products are being advertised, catches violations and automatically takes all necessary steps to begin the enforcement process on your behalf.
In other words, don’t leave your minimum advertised price enforcement to chance—automate the entire process.