Brand Management

How to Create an Effective MAP Policy

Most brands today are using what’s called a Minimum Advertised Price (MAP) policy to protect their business from resellers who could otherwise hurt their brand image, and profits, with too-low prices.

Any experienced company knows how important a good MAP policy really is, both implementing it and enforcing it. But not all policies are created equal.

So, how do you make sure that your brand is covering all its bases? By creating a MAP policy that’s polished, well-executed, and protects the business.

Why Does Your Brand Need a MAP Policy?

Many manufacturers implement a MAP policy to ensure that their brand’s image and value remain positive. MAP violations can lead to a lasting negative impact on a brand’s outward image to the public.

For example, imagine a customer is the market for a new grill. They do some research online and see that the grill is $349.99 at most retailers. After digging a little deeper, they find another seller who is selling what looks like the same grill, but this one’s advertised price is only $149.99. What a steal!

Except, that price is much lower than the manufacturer intended. In fact, that price violates their MAP policy.

This is a problem because it sets lower pricing expectations for a brand’s products, and shoppers may start to notice that these prices are not matching up at different retailers, on top of losing a brand potential profits.

Another benefit of a MAP policy is its ability to prevent price wars.

Retailers always attempt to stay competitive in the market, and this can mean cutting their own prices to drive sales against their competitors. However, too much of this can lead to a loss for the manufacturer.

A MAP policy clearly states a minimum advertised price allowed for a brand’s products, outlining penalties should a retailer advertise a lower price. It creates a level playing field for all retailers who carry your products.

How to Create an Effective MAP Policy

To ensure your minimum advertised price policy is followed by retailers, you need to make sure that it reflects the modern market and keeps your brand competitive. Your prices should entice consumers to make purchases while still providing adequate margins for the retailers selling your products.

So, how do you create the most efficient MAP Policy?

No. 1: Make a Unique Policy

There is no one-size-fits-all when it comes to creating a MAP policy.

Every business sells different products and has different goals when it comes to driving revenue and competing against other brands in the market. For example, a small brand might have different needs and expectations than a large business that is more well-established.

Many brands turn to pre-written MAP policy templates, but these can bring their own issues as well.

The key is to use them as guidance, and not simply fill-in-the-blanks and wipe your hands of it. Look to these templates as a strong starting place for your own policy, but make sure that it adequately fulfills your brand’s specific needs.

Otherwise, your brand risks using irrelevant or inaccurate policies that might not apply to your type of business. Creating a policy that’s unique to you ensures that all of the language used with your MAP policy is appropriate to the retailers selling your products and allows you to control exactly what’s being said.

No. 2: Identify Which Problems Your MAP Policy Is Solving

A MAP policy should, of course, be implemented as a solution to a problem. This can be any number of issues, such as:

If your brand is facing a specific problem, it’s best to craft your MAP policy around it. This way you can shape your prices, guidelines, and violations to uniquely address, and preferably solve, the issue.

The success of your MAP policy relies on its ability to resolve your issues and create smoother relationships with retailers that lead to steady profits for all parties involved.

No. 3: Clearly Define Your Policy Guidelines

A good MAP policy should clearly define the exact lowest retail prices for your product across all types of selling channels. This way, there can be no confusion or misinterpretation of your policy.

Your retailers should be able to fully understand and trust your policy to guide them as they make retail pricing decisions.

As the manufacturer, it’s your duty to ensure that it’s clear what exactly constitutes policy compliance and what is considered a violation. Setting these crystal-clear guidelines allows for greater enforcement, as there is little wiggle-room for violations.

On top of this, you should take care to make sure that retailers know how much MAP policies can also benefit them. MAP does, after all, function as a way of maintaining and regulating sales, which guarantees a certain level of stability for all complying retailers. So long as they continue to follow your policy, they may continue to work with you and sell your products.

No. 4: Outline the Penalties for Policy Violation

In order to properly enforce your MAP policy, you must clearly state what the consequences for violating the policy will be for your retailers.

For example, a policy that is too lenient will allow multiple violations to take place before anything can be stopped, as perhaps retailers view the consequences as not outweighing the revenue, they can gain by violating the policy. Too strict and you might lose quality, reliable sellers.

Depending on your brand’s particular goals and the severity of its previous issues, you may consider issuing warnings before cutting off sellers completely.

However, if you allow too many warnings then they may just come off as “free passes” for policy violators.

The most important thing to remember is that the consequences outlined in your MAP policy must align with the violations committed by the guilty sellers. If the punishment is too harsh then your brand risks damaging beneficial relationships.

Minimum advertised pricing policies can have a huge impact on the way your brand does business and should be a priority for any company.

No. 5: Automate MAP Monitoring and Enforcement

No matter how much time and effort you put into crafting the perfect MAP policy, it’s all moot if you are unable to catch violators and enforce the penalties you’ve laid out.

It takes a lot of resources to manually monitor MAP violations, and even more to keep the information accurate and up to date. Having a team that manually checks in at retailers around the clock to ensure they aren’t stepping out of line isn’t practical, especially as a brand and its list of sellers continues to grow.

Instead, consider using an automated MAP monitoring software to eliminate as much of the margin for human error as possible and ensure that all your information is relevant and accurate. This type of software searches all throughout the web to see how your products are being advertised and catches any violations found immediately.

From here you will receive an alert and can move forward with any enforcement measure you may need to take.

Minimum advertised pricing policies can have a huge impact on the way your brand does business and should be a priority for any company looking to improve their pricing and protect their brand image.

If you’re looking to create a MAP policy for your brand and need a place to start, take a look at Wiser’s Minimum Advertised Price (MAP) Policy Template and see what kind of approach might work best for your business.

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