Minimum advertised price (MAP) is the lowest price a retailer can sell your products to customers. That retailer can sell the item for a higher price but never below the MAP agreement you did with a manufacturer. When you read that last sentence, you may think that manufacturers are the only party interested in MAP monitoring. But retailers must also pay attention to that because it affects them. Here we are going to tell you why they should care about MAP monitoring. 

1- Competitive intelligence   

MAP monitoring programs offer many advantages. You can check your competitors' prices and change your pricing strategy when you want. That information is helpful because you can see if other stores have similar prices as you, and if they do not, they are probably violating MAP agreements.     

Reporting this to your distributor or manufacturers helps you have better relationships with them. Since other retailers are infringing this arrangement, distributers might consider terminating their contract as their sellers. That allows the companies following the agreements to have more flexibility, an opportunity to increase their margins, and more benefits from manufacturers.         

2- Brand protection  

Customers are well-informed and know almost everything related to the prices of the products they are interested in buying. So, when they see a new product, and in the following days, the price drops, they sense that something is wrong with the product. A study by Vanderbilt University confirmed that consumers see low prices as a sign of a low-quality product.       

So, as a retailer, you have to be careful with dropping the prices. If you do lower the prices, sometimes more than what the market dictates, you affect your store. Moreover, you are hurting the brand you are selling.    

With the MAP monitoring program, this will be over. The retailer can see which competitors are underselling products and damaging that brand. And even though it can be tempting to lower the price to follow your competitors, take in mind that you cannot do that because you are destroying the value of a brand.    

3- Price war prevention  

One of the reasons companies started to adopt MAP agreements was to prevent price wars. Price wars happen when a specific company drops its prices constantly below the market value. Competitors answer back with their price drops, and both companies go back and forth with price reductions. In the end, price wars give no benefits, and nobody wins.        

If you repeatedly cut your prices, manufacturers, the brand, and retailers will suffer damage hard to recover. As for manufacturers and brands, customers think low prices mean the product has low quality. That stays in the mind of the consumers and affects their behavior for future purchases. While sales might improve for a short amount of time, customers will decrease their loyalty to the brand, and the retailer will not earn a lot of money. As retailers fight to have competitive prices, they continuously make more violations, lowering their profits.   

Retailers that use MAP monitoring programs prevent their stores from entering price wars. That happens because they will not enter in price drops that affect their margins, manufacturers, and brand perception. 

Conclusion 

MAP monitoring programs are helpful not only for manufacturers but also for retailers because they offer many advantages. With this tool, companies can protect their margins and have better insight into the market. PriceTweakers offers your company the MAP monitoring tool that helps your business grow and detect all MAP violations. You can know what is happening on the market and discover what your team is doing. You can check their progress regarding the MAP violation. Did they contact the vendor? Or are they waiting for a reply from the seller? All of this and much more with PriceTweakers. Contact us for more information.     

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