If you are a business owner, you can experience cutthroat competition from other competitors just so to attract customers and be ahead from everyone else. Meanwhile, global brands and manufacturers usually have retailers in order for their products to reach their target customers. In return, retailers may vary in pricing but should also be based on the brand’s set pricing.
This is why a MAP policy exists mainly to protect brands and manufacturers as well as the retailers. On the one hand, this pricing policy aims to guard the brands and manufacturers’ business reputation. At the same time, it prevents retailers and distributors from setting their prices below the specified minimum price. In other words, the MAP policy is an important business component to ensure a profitable and healthy retail channel.
What if a retailer violates a manufacturer’s MAP policy? Although MAP policies are strictly imposed, there are still some retailers who do not follow it. In fact, some of them tend to set their prices below the price set by the manufacturers in an attempt to attract customers more. Stopping that retailer from selling because of violating the MAP policy may be easier said than done. However, it is another story if it involves major retailers such as Target or Walmart.
As a manufacturer or brand owner, there are options to address this concern without ending up in messy lawsuits or such. Here are some of these options manufacturers can do.
1. Be diplomatic about it.
It may sound like a joke, but this may be one of the most logical things to do. But in a business perspective, this should be done in a diplomatic way. Apparently, a lot of retailers tend to violate MAP policies because it has weak penalties. There is also little to no incentive programs for retailers if they adhere to the brand’s MAP policy. Still, it may be a good idea to talk to the retailer about it because there may be a reason behind it.
2. Know why there is a violation on the retailer’s part.
There may be some reason for the violation. It may be due to a simple error on the retailer’s side. Or perhaps because some retailers think that the MAP policy is too restricting. In such cases, you as a 3. manufacturer should put yourself in the retailer’s shoes and understand where they are coming from.
3. If all else fails, implement penalties.
If the retailer still does not comply with your MAP policy and diplomacy has no effect, then it may be time to implement the necessary penalties. For example, you can pull out some of your items in their retail shelves. Brands can also have the power to remove MAP holidays. Ideally, punishments should start small but can somehow have a great impact on the retailer’s business.
Education is key, and this is why retailers should realize why MAP policies exist. Not only manufacturers can benefit from it but also them as retailers, too. At the end of the day, business owners aim to earn a profit, retain customers, and establish a positive reputation among consumers.