With the holiday season among us, it is no wonder that so many people are looking for deals, sales, and other ways to save money.  Understanding what MAP stands for in retail can be a complete game-changer.  While low-cost goods may be beneficial for some, there are plenty who will not reek the benefits of selling low.  Price management is not all it is cracked up to be regardless of the expertise you bring to the table.  

Understanding Retail

Retail is such a small word, though it encompasses a huge industry for consumers.  Retail involves selling goods and products to consumers.  It involves selling through utilizing a single point of purchase to individuals who plan to use the product.  Single point of purchase can be anything – brick-and-mortar retail store, internet shopping website, and even a catalog.

Systems to market products for consumers are available and necessary in order for retailers to sell products.  There are many moving parts involved to go through the retail supply chain including manufacturers, wholesalers, retailers, and the consumer.

Types of Retailers

Various types of retailers specialize in different goods and products consumers are looking for.  Specializing in unique experiences, retailers can market to consumers looking for certain goods and products.  Department stores, grocery stores, warehouse retailers, specialty, convenience, discount retailers, and internet/mobile retailers are all examples of the wide range of retail shops available.  Regardless of your niche, having a MAP policy in retail is significant to ensure your products’ value does not erode. 

Price Matters

Price is everything. Price is how retailers determine how to view your brand and develop relationships amongst retail partners.  Pricing can add value while simultaneously scare retailers away. This balance is key.

There is a dance that needs to flow between retailer and consumer in order to hold that perfect balance while not compromising the lowest price that can be advertised.  With the world of online retailers expanding, there have been new ways to sell below the minimum advertised price (MAP) which can affect your business.

Brand-focused Pricing Strategies

Two top strategies are market penetration pricing and market skimming pricing.  Both concepts are important to consider while ensuring a MAP policy retail plan is in full effect for your brand.  Market penetration involves introducing your brand at a price that is lower than competitors are offering.  This draws an eye to your brand as it is being introduced and then once the desired sale volume has been met you can begin increasing the price over time.

Market skimming pricing is another type of brand-focused pricing that can work in retail.  This strategy works a bit opposite of the previously mentioned market penetration strategy.  During this method, brands are priced at the highest price within the market that consumers are willing to pay.  After evaluating sales, decreasing price over time occurs based on the responses from consumers.   

Brand-focused pricing strategies can work for you.  Some strategies work better than other brand protections.  Depending on your brand, you will want to consider which option is best for you.  Everyday low pricing may not sell well for luxury brands though do wonderfully with a discount brand.  

How does it Work?

Creating a unique MAP policy rather than utilizing a generic one is useful in so many ways.  With a unique policy, brands have the ability to highlight specific needs, pain points, and data to ensure MAP in retail is effective.  Without considering a unique policy, a brand could be stuck with creating guidelines that could be bad for business. Building out the right policy that matches the brand will be worthwhile. Following the steps for planning, implementing, monitoring, and enforcing a perfect MAP policy can be created.

MAP policies should be created independent of retailers. Consulting retailers could be viewed as price-fixing and this is an aspect trusted brands do not want to be affiliated with.  

Communication is Key

In order to avoid any confusion and to continue developing positive relationships with retailers, it is important brands should create a communication strategy to go with the launch of a new MAP policy.  Ensuring a MAP policy is easy to understand should be at the forefront of the establishment.  There are times when a legal team will need to implement some jargon and if this happens MAP policies can still be communicated clearly with the support of checklists, videos, powerpoints, and even brand reps.

Don’t Get Stuck

MAP in retail does not need to stay a forever decision.  Your MAP in retail can change.  It is easy to create a pricing policy for a new or popular product and then forget about it (kind of like that show you were super into and now onto something else).  With brand popularity growth and the hyper-competitive retail space, there are plenty of opportunities to create pricing policies for each age of your product lifecycle.

During high volume sales events, such as Black Friday, brands will often waive their rules around MAP in retail.  This opens the door for boosting retail sales and spreading marketing through word of mouth.  When brands offer this kind of flexibility, once in a while, reputation stays intact while creating profitable gains for retailers.

Review Process

Every MAP policy has monitoring and enforcement as an integral part of the process. Monitoring prices across retailer websites, social media, marketplaces, and price comparison sites needs to occur. 

While monitoring is part of the process, you may ask what happens when a violation occurs? There should be a plan for that.  Having a plan in place to handle a breach that is consistent will reinforce to retailers that the entire MAP policy should be adhered to. 

During the review process, it could appear counter-productive to restrict a retailer from selling your brand though this will benefit your business in the long run.  Like all good relationships, you want to try and iron out any faults to get a relationship to work. You should give your retailers an opportunity to comply with MAP in retail before completely cutting ties. Most times a three-strike system is in place before cutting a retailer from selling a brand. You can read more about the three-strike system in Understanding MAP Pricing Legality. 

Price Monitoring Software. Do I need it?

Price monitoring software does just that, helps address pain points that are associated with keeping track of a product’s portfolio.  This type of system provides some security with keeping track of your brands and what they are being advertised for.  It can easily identify products in retail so you can save the searching for something more enjoyable.  Price monitoring software can analyze the impacts of price conversions, track price leaders, monitor fluctuations, and even compare pricing strategies to other retailers.  A system set up to monitor your brand can support more data visibility to help avoid price cannibalization.

Having a MAP policy in retail makes sense to protect brands and businesses both big and small.  Whether a start-up or a well-established business, this increasingly competitive retail world can attract price-conscious consumers.  Know your MAP policy in retail- it can save you time, energy, and money.