Common Mistakes of MAP Enforcement Program
You’ve drafted and published a Minimum Advertised Price (MAP) policy that explains clearly and concisely how you want your resellers to advertise your products, and what the consequences will be if they violate the policy. If you were following best practices, you’ve even publicized your MAP policy across your industry.
But those efforts won’t do much to help protect your margins, your relationships with your resellers or your brand’s reputation if you don’t back them up with smart, effective MAP enforcement.
In fact, a MAP policy can actually become counterproductive if the manufacturer or brand behind that policy doesn’t have a reasonable MAP enforcement process in place. If the company’s legitimate resellers see that violations go unpunished, those resellers themselves are more likely to violate the policy, or to stop carrying the company’s products altogether — both of which will hurt the brand over time.
So now it’s time to develop and implement your MAP enforcement program. But be careful: Don’t make these common mistakes.
1. Enforcing the Wrong Reseller Policy
The first issue to address in your MAP enforcement policy actually requires your company to take another look at the reseller policy you drafted in the first place.
For reasons we’ve addressed in a previous post and won’t discuss in detail here, MAP is the right reseller pricing policy in only a limited set of circumstances. If your company does not offer cooperative advertising support to your resale channel, for example, you will probably be better served with a Unilateral Price Policy (UPP).
Also, legally speaking, a MAP policy allows for only a limited number of enforcement options against violators.
This is why, unless you’re certain that a MAP policy is the most effective policy for your company’s circumstances, we’d recommend taking another look at other standard reseller policies, such as a UPP. You will find it extremely difficult to effectively — and legally — implement a MAP enforcement program if MAP is the wrong policy for your business.
(TIP: Learn more about how to determine the best reseller policy for your company by reading our free eBook, How to Draft and Enforce a Successful Reseller Price Policy.)
2. Failing to Clearly Tell Your Resellers Where You Draw the Line
When it comes to the brick-and-mortar, offline world of product sales, federal antitrust law has been pretty consistent for decades about where it draws the line between a “resale price” and an “advertised price.” And that line is generally drawn at the front door of a retailer’s store.
If a reseller lists your products’ prices in a physical mailer or coupon, on a roadside billboard or in a television ad, those would each constitute an advertised price. But once inside the reseller’s own store, any references to your products’ prices — on price tags, rack signs, or even an announcement made over the store’s PA system — would be considered resale pricing, not advertising.
And remember: Your MAP enforcement program can target only violations of advertised pricing — not your retailer’s actual resale pricing. This is an important distinction and another reason it’s worth re-examining whether a MAP policy is in fact the right reseller policy for your company.
This line gets more difficult to draw on the Internet, where the “front door” might simply be the homepage of a retailer’s eCommerce site, or a retailer’s main product listing page. So questions like, “Does in-cart pricing count as an advertised price?” are open to interpretation.
When you draft your MAP policy, you’ll need to think through all of the common ways a reseller might violate it — even innocently, because they simply have a different understanding of where the “front door” is — and you’ll need to explicitly state that your company will consider those actions violations of the policy.
If you fail to include in your MAP policy as many of these potential issues as you can — and clearly explain which you’ll allow and which you won’t — you’ll face more MAP enforcement issues than you would if you’d simply told your resellers upfront what they could and could not do.
3. Trying to Enforce the Policy Manually
Perhaps the most common mistake manufacturers and brands make when setting up a MAP enforcement program is thinking they’ll be able to catch and address all violations simply by manually monitoring their resellers’ websites and the digital marketplaces like Amazon.
This never works.
The Internet is far too vast a digital environment, and at any given moment your products might be appearing on hundreds, even thousands of different websites or online ads. Moreover, any reseller might decide to change any of your products’ prices on any one of its websites or marketplace product listings at any second of any day of the week.
It is simply not feasible to manually “check the Internet” for violations of your MAP policy. This is particularly true when you consider that, depending on the specifics of your MAP policy, checking a retailer’s product listing might also require you to add your product to the site’s shopping cart or to click on a different link on the main page to view “the best price,” which might still violate your policy.
Which is why the best practice for MAP enforcement is to deploy an automated solution, like the Market Visibility module offered by TrackStreet. But this decision carries its own risks of common pitfalls.
4. Selecting the Wrong MAP Enforcement Software
Like publishing a MAP policy and then failing to implement any enforcement process to support it, signing up for MAP enforcement software without learning about the solution and the company behind it can be a risky move: It can lead to a false sense of security, and it can also mean that a lot of violations will go unaddressed and even unnoticed.
Before selecting a MAP enforcement software solution, then, you should prepare a checklist of must-have features and services, to make sure the enforcement program you set up gives your company as much protection as possible. Examples of these deal-breaker features might include:
- A continual, automated scanning of the entire Internet for your products’ presence — not simply a list of your resellers’ own websites.
- Automatic archiving of all communications with each violator, for use in any legal action.
- Data compiling and analysis, and intelligent reports based on your products’ resale presence across the Internet — to help not only with identifying problem resellers but also to use as a sales-intelligence component for identifying new potential partners.
For more details about how to select the best MAP enforcement software, you can download our free eBook, How to Draft and Enforce a Successful Reseller Price Policy.
Want help setting up your MAP enforcement program? Let us give you a free demo.