If you are a business owner or entrepreneur, it is essential that you understand pricing policies for protection of your products. Why?
Consumers today have access to a surplus of online information regarding products, services, and legal matters on the industry of business and trade. Thus, they are provided with the ability to educate themselves extensively and make guided purchasing decisions.
However, consumers are not the only ones who are given protection through the availability of technological innovations. Although they do make up a huge part in the world of business, the manufacturers and proprietors of enterprises are also of equal importance. Therefore, they need protection and assistance as well.
Minimum Advertised Pricing
Both print and digital advertisements are composed of an advertising copy (text) and graphic design (image), which convey a message to a potential market. It's important to include relevant information in the copy, such as the features and details of the product and the pricing.
The minimum advertised pricing (MAP) policy is enforced to help manufacturers. MAP policy gives the lowest possible price that a retailer or seller can advertise a product for sale. The MAP doesn't signify that it's the lowest price the product can be sold for in stores, though. It’s only the lowest amount that they can include in an advertisement. In line with that, retailers are permitted to sell a product at a lower price point, as long as they will not advertise the product with that same price.
As mentioned, this policy serves as protection for the manufacturers or the distributors of products. Consider this: If customers begin to develop an idea that they can purchase a product for a much lesser amount than the retail price suggested by the manufacturer, they may conclude that the product is overpriced and decide to not buy at its recommended price again.
MAP Policy Monitoring
The MAP policy is an agreement between the manufacturer and the retailer. There are cases, however, when the sellers don't abide by the rule when advertising some MAP-protected products. This scenario makes it vital for manufacturers to monitor the advertising and promotion of their goods.
In today's digital age, there are many modern and convenient options for MAP policy monitoring. Brands are able to track compliance while monitoring and enforcing the MAP policy across resellers through the use of software, web-based systems, and online tools.
These cost-effective digital solutions are especially beneficial for manufacturers with wide reseller networks which often find it time-consuming and complicated to regulate MAP policy compliance. Accordingly, retailers who violate the MAP policy by advertising big discounts can affect a manufacturing company's brand image, reputation, and profitability.
To prevent resellers from utilizing excessive discounting to increase their sales, manufacturers can employ sophisticated solutions that provide them with real-time updates, reports on violations, and efficient system of records.
If you're part of the manufacturing business, it's highly advised to prioritize the monitoring and enforcement of the MAP policy for the resellers of your products. This will save you from major business troubles like a compromised brand reputation and lower generation of profits. Keep your company protected and your corporate success will be safeguarded as well.