Retail Strategy Secret #12: MAP

MAP

Welcome to the twelfth post in our series of “Retail Strategy Secrets”!  Here you will learn the angles, approaches, and tactics retailers are using every day to try and separate you from your hard-earned cash.  Understanding these unlocks the door to spotting great deals, and you never want to pass up a Dealicacy…

MAP – Minimum Advertised Price

Much less flexible than MSRP, Minimum Advertised Price (MAP) is a form of Vendor Pricing that prohibits retailers from advertising prices below a specific amount. In many cases, MAP agreements very nearly imply that retailers not even sell below a given amount.

From a legal standpoint, MAP is riding a very fine line between good practice and price fixing (bad)… In many countries, consumer law is predefined and spells out every detail of what terms are allowed and disallowed in distribution, resale, and licensing contracts.

At a basic level, a MAP policy between a distributor and seller is permissible only so long as it does not dictate the selling price.  As mentioned above, however, this does not prevent a manufacturer from *strongly suggesting* pricing levels with hints of taking their business elsewhere (i.e. to a retailer that is more compliant).

Ignoring, toeing the line, or even simply “forgetting” (e.g. having a newer merchant employee that didn’t do his homework) can put the retailer face to face with sizable fines and/or penalties.  And the penalties aren’t just monetary either.  Not much is off the table: manufacturers can threaten to withhold or (“oops”) delay supply of popular products at key drive times (think Apple iPods at Christmas).  Repeat offenders can even get product lines pulled altogether with the extra supply purposefully and visibly allocated to competitors.

Understandably, this is why you will occasionally come across in-store signs that say “Price too low to advertise!”, or advertisements that say “Come in for exclusive/unadvertised specials!” This also occurs online at sites such as Amazon.com or NewEgg.com when the price isn’t revealed until a few steps into the transaction process.  Examples include “Click to see price!”, and “Add to basket to see price!” — on both individual items and bundled offerings where just one of the many items are subject to MAP.

A couple of well-known brands that enforce MAP with teeth are Bose (stereos) and Weber (grills).  Recall that, by law, retailers are free to sell products at whatever price they wish.  There is absolutely no problem selling above MAP, however no pricing of any form is taken lightly below MAP.

In the case of Weber, governance of MAP expands even as far as to how accessories can be added to package deals.  This is one reason that you will likely never see a Weber-branded grill cover being given away with the sale of a Weber gas grill.  In such an example, the final net price of the bundle would be:

( grill cost – cover cost ) = Lower than MAP of the grill

And the complexity of manufacturer rules and stipulations increases from there, even up to disallowing coupons. Now you know why there are secret shoppers!

So how do we score a Dealicacy with such tight controls on brands that we really want? Here are some ideas:

– Exercise (yep, you guessed it) patience. Know which item you really want/need and then…
– Watch for in-store deals, and
– Wait for end-of-season markdowns

And here’s the best one – watch your email inbox.  If you are a subscriber of our newsletter, we do a tremendous amount of leg work to notify *you* of deals on stuff like this – big ticket items, small accessory items, and everything in-between. And the email alerts are FREE.

Thanks for staying tuned here at Dealicacy! I’m almost ready to post the next topic in our series: Prestige Pricing, and look forward to seeing you back.

Yours for great deals,

– Nathan

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3 Responses to “Retail Strategy Secret #12: MAP”

  1. Drumwright says:

    Awesome share! Thank you very much 🙂

  2. Dan Z says:

    Just stumbled upon your article and definitely will have a look at additional ones. Looks like seriously good stuff.

  3. Abhishek says:

    Great post!! very informative.. Thx!