TrackStreet Blog

My MAP Policy is Being Violated. Now What?

Posted by Andrew Schydlowsky (TrackStreet) on Aug 3, 2017 8:40:56 AM

You drafted an effective minimum advertised price (MAP) policy for your company’s products. You published it prominently on your website. You distributed it to all companies in your resale channel, and you’ve added the MAP policy to your onboarding program for new retailers. You even sent out a press release to the major publications in your industry announcing the new pricing policy.

But despite these efforts, you’ve discovered a retailer (or maybe several retailers) advertising your products below your MAP-approved prices. What should you do now?

MAP Policy Violation

Although there is no one-size-fits-all strategy for an effective MAP program, our experience in helping brands across many industries develop and enforce their MAP policies has taught us that there are several steps all companies should take to address MAP violations.

Before I list those steps, however, let me first make the case for why — to protect both your brand’s reputation and your business’s bottom line — you really do need to have a well-thought-out MAP policy and an enforcement program in place to support it. The best analogy here is the “broken windows theory” of criminology, developed by social scientist James Q. Wilson and later put into real-world use by Mayor Rudy Giuliani in New York City.

The broken windows theory argues that if a society allows even small misdeeds to go unaddressed and unpunished, this signals to the society’s bad actors that they might be able to get away with committing more serious misdeeds. If a local police force signals that it will tolerate a few broken windows of its abandoned buildings — that it won’t even attempt to find and punish the vandals — then before long that city will likely see an increase in many other types of crime.

And so it goes with your reseller pricing policies, such as your MAP program.

If you do not take strict and aggressive action to address violations of your MAP pricing, then your other resellers will not take your MAP policy seriously, and many of them might also begin violating it.

Soon this can have disastrous consequences for your company:

  •      It can quickly lead to a race to the bottom on your products’ pricing, and an erosion of your brand’s perceived value
  •      It can chase away many of the major retailers whose business you need
  •      It can make your brand and product line far less attractive to future resellers

Okay, so you’re convinced that you need not only a MAP policy but also an enforcement strategy to take action against violators. What should that enforcement strategy include? Here are some of the most important steps.

 

5 STEPS TO TAKE WHEN YOU DISCOVER A MAP VIOLATION

 

STEP 1: Document the violation

Regardless of how you plan to handle a MAP violation, your first step should always be to capture proof of the violation itself. This will give you more leverage against the offending company and give you more enforcement options.

In many cases, documenting a MAP violation will simply mean taking screenshots of all of the pages on the reseller’s site advertising your product at below your MAP-approved price. You will also want to make sure the screenshot is time and date stamped.

Many rogue retailers, and even some members of your authorized resale network, will often post these below-MAP advertised deals late at night, when they are hoping they can get away with the transgression and the manufacturer won’t catch the violation.

This is one reason that having an automated MAP enforcement platform is a smart strategy: Such a platform will monitor your products’ presence across the Internet 24/7, will document violations — and will even automatically begin the enforcement process for you.

 

STEP 2: Send a MAP-violation warning message to the offending company

After documenting a MAP violation, your next step should be to alert the offending reseller that you are aware of the violation and have captured proof of it.

A well-thought-out MAP program should include several versions of this first warning: perhaps a more softly worded message to an authorized reseller with whom you have a trouble-free history, and a more harshly worded warning to an unauthorized retailer.

Another principle to keep in mind here is that this warning note should be part of a larger enforcement strategy that includes an escalating series of messages to the offending company. With any luck, you will never need to send that second notice, or the third. But you should have them drafted — with increasingly aggressive language — just in case.

 

STEP 3: Send a request to the online marketplace to remove the offending listing (if applicable)

If your products are being advertised at below your MAP-stated prices at an online marketplace, as opposed to directly on a reseller’s own ecommerce site, you might also want to issue a notification to that marketplace that the seller is violating a manufacturer’s pricing policy.

This is no guarantee that the marketplace will remove the offending listing. Amazon, in particular, has publicly stated that they will not interfere with manufacturer-reseller MAP disputes.

But issuing such a notice to an online marketplace can help in other ways. It can, for example, put that marketplace on notice that the retailer might be a questionable vendor — a company they might want to watch more closely if they are concerned with creating a bad experience for the marketplace’s shoppers.

Of course, you will want to use this step only with discretion. Sometimes, an authorized reseller will innocently offer your products at below-MAP levels and will need only that gentle reminder suggested in Step 2 to correct the problem themselves. In such cases, you don’t also want to be creating friction for that retailer with one of their online marketplaces.

But when it comes to unauthorized retailers, who don’t respond to your first warning, you might also want to alert the marketplace(s) where they sell your products of the problem — because the extra scrutiny from the marketplace might help pressure them into compliance.


STEP 4: Send regular communications to your resale channel about the steps you are taking to correct MAP violations

This step is more of an ongoing part of managing your MAP  process, but it deserves a place on this list because a major part of your MAP program’s value is in protecting and strengthening your relationships with key partners in your resale channel.

With this in mind, it is a good idea to issue regular communications to your channel about your progress in stopping or preventing MAP violations. Receiving these communications from a manufacturer can help make a retailer feel more comfortable about continuing to sell its products — because the retailer will know that the manufacturer is taking a proactive stance to protect the interests of its resellers.  

 

STEP 5: Deploy an automated MAP enforcement platform to manage all of these and other steps for your company — 24/7/365

Finally, after you’ve faced a MAP violation, or several of them, and you’ve realized how difficult it can be to catch every instance of your products being advertised below your MAP’s approved prices, you might be ready to consider automating the entire process.

Of all of the suggestions I’ve listed in this post, this is by far the most strategically important step you can take. That’s because with this one step — automating your entire MAP monitoring and enforcement program — your company will be better prepared to quickly and effectively respond to any future MAP violation.

With a fully automated MAP monitoring and enforcement platform, you can load pre-drafted MAP policy documents, as well as your series of escalating warning messages. You can customize rules for alerting you and your team of any violations. You can automate the process of capturing and documenting violations, so you always have proof of MAP offenses. And you will have access to on-demand reports providing you actionable intelligence on how your products are being sold, where, and by whom; which merchants are committing MAP violations; and even how consumers are reviewing both your products and the resellers’ buying experiences.

Also, a full system clearly illustrates which sellers didn’t know better or were testing and which are intentional — distilling the market down and telling the brand where and on whom to focus

With the right MAP protection platform, you can automate your entire MAP enforcement program — so you’ll know that there is always a team of experts looking out for the interests of your MAP policy, your brand’s reputation and your relationships with legitimate resellers.

To discover what a best-in-class MAP enforcement platform can do for your company, schedule your free demo.