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MAP and MSRP monitoring on the Internet. MAP Control for Online Stores and Marketplaces

January 16, 2025
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MAP (Minimum Advertised Price) is the lowest price at which a retailer is allowed to advertise a product. It is a policy designed to protect the perceived value of a brand and ensure fair competition among retailers.

MSRP (Manufacturer's Suggested Retail Price), on the other hand, refers to the price a manufacturer recommends for a product's retail sale. Unlike MAP, MSRP serves only as a guideline and does not involve restrictions on advertising or sales practices.

In the competitive world of modern retail, price policies are one of the critical tools manufacturers use to maintain their brand value and market position. One such tool is the Minimum Advertised Price (MAP), a policy widely adopted in Europe and the United States to regulate how products are advertised by retailers. This article explores the concept of MAP, its role in pricing strategies, and the potential risks retailers face for non-compliance.

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1 MAP and MSRP monitoring on the Internet. MAP Control for Online Stores and Marketplaces

What is it MAP?

Although most consumers are unaware of it, nearly every product has a Manufacturer's Suggested Retail Price (MSRP). In fact, about 95% of buyers never consider the existence of such a price. When shopping online, many consumers focus solely on finding the lowest possible price.

MAP, or Minimum Advertised Price is important but it is does not dictate the actual selling price of the product; retailers are free to sell at a price they choose. However, MAP policies ensure that the advertised prices remain above a certain threshold, preserving the perceived value of the product and preventing price wars that could erode brand equity.

Manufacturers implement MAP policies to create a level playing field among retailers, ensuring that large and small sellers can compete fairly without resorting to aggressive discounting.

MSRP (Manufacturer's Suggested Retail Price) in automotive industry.

An industry such as the automotive industry depends on the MSRP. Manufacturers recommend that dealers set this price for car sales and display it on a sticker on the window. The formation of MSRP is influenced by production costs, the make and model of the car, the region of sale, and the trim material. In different regions of the country, the price recommended by the manufacturer may differ.
In any case, the MSRP is only a manufacturer's setting for the dealer.
Retail items such as electronics and home appliances have an MSRP. By setting the MSRP, the manufacturer expects that this price of the product will be the same for all sales channels and will allow all market participants to receive the expected profit.

Key Benefits of a MAP Policy for Brands

MAP policies are a cornerstone of modern pricing strategies, ensuring that manufacturers, retailers, and consumers benefit from a stable and equitable market environment. These policies serve several key purposes:

1. Protects Brand Value

Maintains Perceived Quality: Consistently advertised pricing helps avoid the perception that a product is "cheap" or "low-quality" due to excessive discounts.
Avoids Price Erosion: Prevents a race to the bottom, where retailers undercut each other, damaging the product's long-term value.

2. Encourages Fair Competition

Ensures that both large and small retailers compete on service, selection, and customer experience rather than just price.
Levels the playing field for smaller retailers who might not be able to compete with big-box stores or major e-commerce platforms offering deep discounts.

3. Strengthens Relationships with Retailers

Retailers are more likely to carry and promote products with a MAP policy in place because it ensures their profit margins are protected.
Prevents resentment among retailers caused by unfair pricing advantages.

4. Enhances Consumer Trust

Stable pricing across retailers helps build customer confidence in the product and brand.
Avoids consumer confusion caused by drastically varying advertised prices for the same product.

5. Supports Long-Term Profitability

By preventing deep discounting in advertisements, brands can maintain higher margins across their distribution channels.
Encourages retailers to invest in marketing and support for the brand, as they are assured competitive pricing.

6. Reduces Unauthorized Seller Activity

Discourages unauthorized sellers and gray-market activity by removing the ability to undercut legitimate retailers through low-price advertising.
Helps brands maintain control over their distribution channels.

7. Simplifies Enforcement

MAP policies provide clear guidelines for retailers, making it easier to monitor and enforce compliance using tools like price-monitoring software.
Violations can result in penalties or restrictions, ensuring retailers adhere to the policy.

Additional Benefits for Online Marketplaces

In the age of e-commerce, MAP policies are especially critical:

Maintains Price Integrity: On platforms like Amazon, eBay, or Walmart, MAP ensures consistent pricing, avoiding public price wars.
Boosts Brand Reputation: Shoppers comparing prices across multiple sites see consistency, which enhances trust in the brand.
Prevents Algorithmic Price Drops: Automated repricing tools used by online retailers often trigger price reductions, but MAP policies can help stabilize these trends.

A MAP policy is a vital tool for brands to maintain pricing control, protect their reputation, and ensure fair competition among retailers. By implementing and enforcing a MAP policy, brands can support long-term growth, strengthen retailer relationships, and sustain consumer confidence.

MAP and MSRP - what is the difference?

The terms MAP (Minimum Advertised Price) and MSRP (Manufacturer's Suggested Retail Price) are both pricing strategies, but they serve different purposes and are used in distinct ways in retail and online commerce. Here's an explanation of the difference.

Example:

MAP Scenario: A product with a MAP of $100 cannot be advertised for less than $100 on a website or in a flyer. However, the retailer can privately sell it for $90 in-store.
MSRP Scenario: A product with an MSRP of $150 may be sold by some retailers for $120 or $160, depending on their pricing strategy.

MAP is about controlling the public perception of price, while MSRP is a recommendation to standardize pricing. Both are tools for manufacturers to manage pricing strategies, but MAP tends to have stricter enforcement and implications for retailers.

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How MAP and MSRP Are Determined

The way manufacturers establish MAP and MSRP pricing reflects their strategic efforts to balance brand value, retailer interests, and market competitiveness.

MAP (Minimum Advertised Price)

Determination Process:

Considers production costs, market demand, and competition.
Aims to protect the brand’s value and ensure fair competition.
Often developed in collaboration with key retailers for mutual benefits.

MSRP (Manufacturer's Suggested Retail Price)

Determination Process:

1. Calculated based on production costs, distribution expenses, and desired profit margin.
2. Represents the manufacturer’s view of a fair market value.
3. Serves as a guideline for standardizing prices across channels without enforcement of restrictions.

Unique Characteristics of MAP and MSRP

MAP and MSRP serve unique roles in retail pricing strategies, addressing distinct needs and challenges for manufacturers and retailers alike.

MAP

Purpose: Establishes a minimum threshold for advertised prices to protect brand equity and ensure fair market competition.
Implementation: Often includes strict enforcement mechanisms, such as penalties for non-compliance, which may include suspension of supply agreements.
Impact: Helps to prevent price wars, ensuring that retailers maintain adequate profit margins and that brand value is not eroded by overly aggressive discounting.

MSRP

Purpose: Provides a non-binding recommendation for retail pricing, serving as a benchmark for both retailers and consumers.
Flexibility: Retailers are not obligated to follow the MSRP, making it more of a guiding tool than a strict policy.
Consumer Insight: Acts as a reference point, helping customers gauge the product’s market value and aiding in informed purchasing decisions.

While both MAP and MSRP play vital roles, their strategic applications differ significantly, allowing manufacturers to address both competitive and value-based considerations.

For example, Apple establishes its MSRP for products like the iPhone based on factors such as production costs, investment in innovation, marketing expenses, and competitive analysis. MSRP helps Apple maintain its premium brand image and prevents price wars among retailers. Despite occasional discounts and promotions by individual sellers, most retail outlets adhere to Apple's pricing standards to preserve contractual relationships and exclusive selling rights.

Risks of Non-Compliance with MAP in the Online Marketplace

Non-compliance with MAP policies can lead to a wide range of negative consequences for retailers, potentially affecting their financial performance, reputation, and long-term business viability. Here are the key risks:

1) Termination of Supply Agreements:

Manufacturers may choose to stop supplying products to retailers who violate MAP policies.
Retailers risk losing access to high-demand or exclusive products, which can result in reduced sales and market share.

2) Weakened Relationships with Manufacturers:

Non-compliance can strain relationships with suppliers, leading to the loss of marketing support, cooperative advertising funds, or favorable payment terms.
Retailers may face difficulties in negotiating future partnerships or exclusive deals.

3) Legal and Financial Penalties:

Persistent violations of MAP agreements may expose retailers to lawsuits or penalties, especially if contractual obligations are breached.
Some manufacturers may impose fines or other financial disincentives to ensure adherence to MAP policies.

4) Reputational Damage:

Retailers known for disregarding MAP policies can develop a negative reputation among manufacturers, competitors, and even customers.
Premium brands may avoid associating with retailers who fail to uphold their pricing strategies.

5) Increased Competition and Price Wars:

Non-compliance can trigger price wars, reducing profit margins not only for the violating retailer but for the market as a whole.
This erosion of margins can harm smaller retailers more significantly, as they have less capacity to absorb financial losses.

By understanding and respecting MAP policies, retailers can avoid these risks and maintain strong, mutually beneficial relationships with their suppliers.

Potential Consequences of MAP Non-Compliance for Manufacturers

Non-compliance with MAP policies presents significant challenges for manufacturers, potentially impacting their brand reputation, market position, and relationships with retailers. Key risks include:

1) Brand Devaluation: Allowing retailers to advertise products below MAP can erode the perceived value of the brand.

This may diminish consumer trust and reduce the brand's ability to maintain premium pricing.

2) Disrupted Market Dynamics.

Retailers violating MAP policies can trigger price wars, destabilizing market pricing structures and affecting all players in the distribution chain.

This can make it harder for manufacturers to establish consistent pricing strategies.

3) Loss of Retailer Trust.

Retailers adhering to MAP policies may lose trust in the manufacturer if violations are not addressed.

This can strain partnerships and reduce collaborative opportunities.

4) Reduced Profit Margins.

Frequent MAP violations may force manufacturers to lower wholesale prices to compete in the market.

This can lead to decreased profitability and challenges in funding innovation or marketing efforts.

5) Legal and Compliance Risks.

Inconsistent enforcement of MAP policies can expose manufacturers to legal scrutiny, particularly in regions with strict antitrust laws.

Failure to address violations uniformly may lead to disputes or penalties.

AUTOMATED PRICE MONITORING ON THE INTERNET is daily up-to-date information about the prices of your customers for your product.

You can read more about Saas solutions for controlling retail prices - their capabilities, limitations, application features and pricing policy in our article on price monitoring services.

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How to Effectively Monitor MAP Online

Monitoring MAP online involves using a combination of tools, strategies, and processes to ensure retailers comply with your minimum advertised price policy. Here's how you can do it:

1) Leverage Automated Price Monitoring Tools

Use software solutions like Price Control to track advertised prices across e-commerce platforms, marketplaces, and retailer websites. These tools provide real-time updates and alerts for MAP violations.

2) Monitor Key Retailers and Marketplaces

Focus on high-traffic platforms such as Rozetka, Amazon, eBay, Walmart, and others where price competition is most intense. Pay attention to both authorized and unauthorized sellers.

3) Set Up Alerts for MAP Violations

Configure monitoring tools to notify you when a price drops below the MAP threshold. This ensures you can act quickly to address violations.

4) Regularly Audit Product Listings

Manually check listings periodically for issues that might not be captured by automated tools, such as bundled products or hidden discounts.

5) Track Unauthorized Sellers

Identify and monitor unauthorized retailers who might undercut prices. Tools can help flag listings from sellers who are not part of your authorized distribution network.

6) Analyze Price Trends

Use data from monitoring tools to identify patterns of non-compliance, repeat violators, and market trends that might impact MAP adherence.

7) Communicate and Enforce Compliance

Send warnings or take action against retailers who violate MAP policies. Clear documentation of violations strengthens enforcement.

8) Engage with Third-Party Monitoring Services

Consider hiring experts who specialize in MAP enforcement to manage complex monitoring tasks and handle violations efficiently.

By combining technology, vigilance, and a proactive enforcement strategy, you can effectively monitor and maintain MAP compliance online.

Legal Considerations of MAP policies

In many jurisdictions, including the United States and Europe, MAP (Minimum Advertised Price) policies are permissible under specific legal frameworks, provided they do not involve coercion or anti-competitive practices. Here are the key aspects.

1) Legality of MAP Policies.

Manufacturers can establish MAP policies as a guideline for how their products should be advertised.
These policies are legal as long as retailers voluntarily agree to comply and are not forced into agreements under duress.

2) Enforcement Boundaries.

Manufacturers have the right to end relationships with retailers who violate MAP policies.
However, manufacturers must be cautious not to enforce resale prices directly, as this may cross the line into resale price maintenance (RPM), which is subject to antitrust scrutiny in many regions.

3) Regional Variations.

United States: The Supreme Court ruling in Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007) allows MAP policies to be assessed under the rule of reason. However, direct price fixing or coercion can lead to violations of the Sherman Act.
Europe: The European Union strictly prohibits RPM under Article 101 of the Treaty on the Functioning of the European Union (TFEU). MAP policies must avoid being perceived as a means of indirect price control.

4) Risks of Improper Implementation.

If manufacturers enforce MAP through explicit or implied coercion, they risk violating antitrust laws.
Disparities in enforcement across retailers can lead to accusations of favoritism or unfair trade practices.

5) Best Practices for Compliance:

Document MAP agreements clearly, emphasizing their voluntary nature.
Train internal teams to avoid language or actions that could be construed as coercive.
Apply MAP policies uniformly across retailers to avoid claims of discrimination.

These legal considerations underscore the importance of a careful and transparent approach to implementing MAP policies. By adhering to these guidelines, manufacturers can safeguard their brand while avoiding regulatory pitfalls.

MAP monitoring with Price Control

The trend towards even more rapid development of the e-commerce market encourages manufacturers to control the prices of online stores. And manual monitoring is no longer enough. Automation of the monitoring process has become a must-have for every large business.

Regular price tracking on sites of online stores, marketplaces, and price comparison sites is the primary way to ensure that your MAP is being followed.

Program for monitoring prices on the Internet Price Control allows you to track prices on all marketplaces on the Internet and find all resellers of your products.

What benefits does MAP monitoring in the Price Control service provide?

1) Comprehensive Seller Identification
We will identify all sellers offering your brand's products in the market, ensuring full visibility of your distribution network.

2) Targeting Unauthorized Sellers
Our service will track unauthorized sellers and provide actionable solutions to remove them from the marketplace.

3) Streamlined Monitoring to Reduce Costs
By using Price Control, you can significantly lower operational expenses by minimizing the need for employee involvement in monitoring retailers' compliance with MAP policies.

4) Counterfeit Detection
Our solution helps uncover counterfeit goods in the market, protecting your brand’s integrity and ensuring consumer trust.

5) Expanding and Legitimatizing Your Network
Systematic monitoring enables you to expand your client network by converting unauthorized sellers into compliant, authorized partners.

6) Real-Time Alerts for Policy Violations
Receive immediate notifications of MAP policy violations, allowing you to act quickly to safeguard your brand’s reputation and avoid significant financial losses.

7) Detailed Reporting and Analysis
The results of our data collection are delivered as convenient Excel reports via email. Additionally, our service's Personal Account feature allows you to create customized graphs, tables, and charts with statistical data for deeper insights.

8) Custom Solutions for Unique Challenges
For tasks that require a tailored approach, we develop specialized software to meet your specific needs.

MAP monitoring dashboard (example)

dashboard price control

Monitoring can be performed from 1 to 24 times a day, which will be useful for tracking down the first MAP violator. Information from the Personal Account can be uploaded to Excel for further processing.

For more than nine years, the price monitoring service Price Control has been operating in the Ukrainian and other countries' markets. We provide MAP monitoring on the Internet and help customers build a competent pricing policy on the market. The service helps its customers track prices on Marketplaces and online stores and maintain the value and reputation of their brands.

Want to learn more? Book a consultation with our specialist!

Irina Zheleznyakova

Price Control Project Manager.
Director of LLC "KA Perspektiva - 3000"

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