What is MAP?
As one of price control, The Minimum Advertised Price (MAP) is the manufacturer's predetermined minimum price for a retailer to sell its product. For instance, if a manufacturer manufactures erasers and sets its MAP at $1, retailers are required to sell these erasers for a minimum of $1; otherwise, they will be violating the MAP policy.
The MAP agreement is established to ensure that the price of the same product advertised in different stores remains relatively constant. Manufacturers usually have MAP agreements with their retail partners and keep a close eye on their adherence to the agreement. If a retailer violates the MAP agreement, the manufacturer can take various measures, such as terminating their partnership with the retailer, reducing the supply, or even initiating legal action.
What Are the Reasons for Retailers to Monitor MAP?
MAP involves not only pricing but also concerns with brand reputation and equitable competition.
The most common reasons for implementing the MAP agreement are
A. Brand Image Maintenance Manufacturers can use MAP to set a minimum price that ensures their products are not sold at excessively low prices, thereby maintaining the high-end brand image.
B. Ensuring Fair Competition across Distribution Channels Manufacturers can use MAP to prevent retailers from engaging in low-price competition, which may lead to price wars and reduced market value of products while maintaining fair competition.
C. Allowing Smaller Manufacturers to Compete with Larger Suppliers By using MAP, smaller manufacturers can avoid being pushed out by larger retailers that they cannot compete with.
D. Protecting Sellers' Profits The MAP protocol can ensure that retailers can sell products at a higher price, thereby protecting their profits.
E. Preventing Underpricing The MAP protocol can prevent manufacturers or suppliers from using unreasonable pricing strategies, thereby ensuring rationality and stability of prices.
As more brands implement MAP compliance monitoring, it is increasingly important for retailers to comply with the MAP agreement. Therefore, every CEO should consider implementing MAP violation monitoring to maintain brand image and ensure fair competition.
Why do Retailers Violate the MAP Agreement?
Although retailers are expected to respect and comply with the policies set out in the MAP agreement, the reality is that they may not always do so, especially in highly competitive e-commerce environments.
In general, there are two primary reasons for violating MAP compliance
Firstly, competitive pressure can cause e-commerce retailers to lower their prices to remain competitive in the market. This may result in the retailer violating the MAP price set by the manufacturer.
Secondly, loopholes in the supply chain, such as unauthorized resellers, can lead to retailers undercutting the competition by adjusting the price of the products.
Violating the MAP policy can have negative consequences for the supplier. When retailers advertise products below the MAP price, consumers often blame the brand manufacturer, which can damage the brand's reputation. Inconsistent pricing can also reduce consumer trust in the brand, and rebuilding that trust requires more time and resources. Therefore, manufacturers should develop strict monitoring mechanisms to ensure retailers comply with the MAP agreement and protect the brand image of their products while maintaining a level playing field.
Type of MAP Monitoring.
1. Manually map monitoring.
To ensure adherence to the MAP agreement, manufacturers need to take multiple steps. These steps may vary depending on the specific policy terms, but generally include the following
a. Locate all sellers and review their advertised prices.
b. Contact and warn any violators.
c. Double-check that the advertised price of any violators has been adjusted.
d. Follow up with sellers who do not take action.
e. Issue a final warning.
While smaller companies may have fewer retailers to work with, manually monitoring even just 20 of them can be time-consuming and resource-intensive. Furthermore, this process is ongoing and requires constant monitoring of advertised prices to detect any potential MAP policy violations. Therefore, manufacturers should implement automated monitoring tools to manage and oversee sellers' MAP compliance. This approach can help identify and address violations more quickly, thereby safeguarding brand image and promoting fair competition.
2. Automatically map monitoring.
To automatically monitor and maintain MAP compliance, e-commerce companies use price monitoring software or data extraction tools. These tools automatically grab e-commerce pricing data and provide it when needed.
Price monitoring tools can automate the following processes
a. Provide a list of sellers, including all sellers selling your product or service.
b. Show the cost of your goods or services in each marketplace.
c. Flag prices that violate MAP policy.
However, relying solely on data scrapers is not enough, as many websites will not allow you to easily obtain data. This is where proxies become a useful tool to help monitor prices. A proxy server can hide your real IP address, allowing you to conduct anonymous network access in different locations, so as to better deal with anti-crawler policies or avoid IP bans and other issues. Compared with public proxies, we recommend paid dedicated proxies to assist with relevant tasks if you want to get a professional and comfortable experience. YiluProxy is an expert in proxy service that offers a high success rate, connection speed, and anonymity to cooperate with scraping tools.
Automation can establish a stable and reliable price monitoring process and is a more effective solution than manual monitoring. Because special tools can transmit information more quickly and accurately, it would take a lot of time and effort to manually check the price of each seller.
Conclusion
This article delves into the significance of keeping tabs on your Minimum Advertised Price (MAP). On the whole, monitoring MAP can assist manufacturers and brands in maintaining favorable relations with authorized vendors and markets. Additionally, it can aid in detecting marketplaces that may be retailing branded products without permission or in violation of MAP policies.
MAP agreements are crucial for safeguarding brand reputation, ensuring fair competition across diverse distribution channels, and establishing a healthy marketing milieu for brands of various scales. Since MAP violations can jeopardize a brand's reputation, inconsistencies in pricing may cause confusion and dissatisfaction among consumers.
Keeping track of MAP involves verifying product prices across numerous channels. Although some companies opt to manually perform MAP monitoring, this approach is inefficient. By using an automated pricing monitoring tool, one can promptly amass a wealth of information from different e-commerce marketplaces, monitor prices more effectively, and guarantee the protection of their brand's reputation.
