Woman looking at a pet food bag in a store

All-time Practices for Implementing a MAP Policy

Many pet products manufacturers adopted new — or strengthened existing — minimum advertised price (MAP) or minimum retail toll (MRP) policies during 2016-17 in their efforts to push back on the deep-discounting and predatory-pricing practices of some online retailers. But that's only one reason to implement and enforce a stiff, comprehensive MAP policy. Here, we'll look at why your company should have a MAP policy and what all-time practices you should consider when creating, implementing and enforcing 1.

What a MAP policy is — and isn't

Minimum advertised price policies are unilateral programs that manufacturers can utilise to limit their retailers from advertising products beneath a predetermined level. Unlike resale price maintenance (RPM) agreements, MAP policies don't strictly limit production pricing. Manufacturers utilize RPM policies or agreements to prevent retailers from selling products below a specified price.

MAP policies are perfectly legal nether U.S. antitrust laws. (Such policies have actually been used since 1919 — nearly 100 years!) As long every bit a manufacturer or supplier acts independently from its resellers, a MAP policy isn't considered a form of vertical price fixing. That'southward because advisedly synthetic MAP policies but restrict the advertised price of a product, not the last sales cost. MAP policies as well typically tin't restrict in-store advertising. Retailers can withal choose to sell a particular production for less than the minimum advertised price; they but tin't promote a lower-than-MAP selling cost.

Why your company needs a map policy

Omnishopping — the exercise of using a variety of channels, platforms and devices to browse for and purchase products — is ubiquitous in the The states, according to a 2017 study conducted by Criteo Southward.A. More than 80 percent of U.South. shoppers reported they store online, then purchase in-shop and vice versa, making "webrooming" and "showrooming" the norm for today's consumers. These behaviors reinforce the need for pet product brands and retailers to exist gear up to connect with pet parents online at whatsoever time and on any screen — as well every bit offline — during the client'southward journey. Today's consumer ownership behaviors as well reinforce the need for product manufacturers to constitute and coordinate prices beyond many different retailers and channels.

A MAP policy that covers all of a company's production resellers tin help level the playing field for retailers of all sizes. This is the well-nigh common scenario used to justify a MAP policy. According to attorneys with Holland & Knight LLP, MAP policies protect brick-and-mortar retailers by limiting the showrooming that results from extreme discounting by online retailers who provide sometimes unsatisfactory customer service or production support. Simultaneously, a MAP policy can clinch retailers that a product manufacturer understands and values the service they provide and encourages retailers to sell on service and added value. Minimum advertised pricing policy respects everyone'due south right to make a respectable margin, which is the goal of business. (P-R-O-F-I-T is non a bad 4-letter word!) Ultimately, manufacturer–retailer relationships can exist strengthened by MAP policies.

Last year's surge in MAP policies amongst pet products manufacturers appears to exist a response to contained pet specialty retailers' demands for fair pricing policies. Certainly, pet product manufacturers can and do use minimum advertised pricing as a fashion to help independent pet specialty retailers compete with mega due east-commerce and big-box retailers who might otherwise out-cost the contest — right out of existence.

For brands that occupy a premium position in the market, at that place'due south yet some other reason to implement and enforce a MAP policy: brand epitome. Excessive discounting by retail channels, if left unchecked, could ultimately lower the value of premium products in consumers' eyes, eroding a product'south brand image. This is especially important for those brands and products in which a visitor has invested time and money to develop and bring to market.

All-time PRACTICES FOR IMPLEMENTING A MAP POLICY

If yous're ready to craft a MAP policy — or strengthen an existing 1 — you should consider the following best practices:

Create a MAP policy that'southward unique to your company.

No unmarried policy is right for every manufacturer; you accept specific circumstances, goals and unique relationships with retailers to consider. Fill-in-the-blanks cookie-cutter MAP policy templates that you find online may not adequately protect your brand. Instead, look at other existing MAP policies for ideas on what your visitor's MAP policy should cover before sending it to an attorney for review.

Be sure to craft a MAP policy that aligns with your product advertising needs and establishes guidelines that you lot expect retailers to follow when advertising your products. (Cooperative ad funds tin provide an incentive for retailers to comply with your MAP policy.) Your MAP policy should expressly state that retailers take a correct to set their own prices that is not express by your company'southward MAP policy in any way.

Be clear virtually what constitutes compliance with your policy — and what doesn't.

A MAP policy should be easy to understand and convenient. As the manufacturer or supplier who'due south crafting and enforcing a MAP policy, it'south upward to you to determine how y'all want to set your guidelines. Your retailers need to know exactly what they need to do to comply with your MAP policy. And they demand to know and sympathise the consequences for failing to follow guidelines.

Get legal counsel to avoid antitrust issues.

A MAP policy could violate antitrust statutes depending on how a particular MAP policy is created and implemented — not just on the federal level only on the state level. Piece of work with an attorney who specializes in antitrust law to create a MAP policy that protects your company, legal continuing and authorized resellers.

Be consistent with implementation of your MAP policy.

When rolling out a minimum advertised pricing policy, consistency across channels is important. It doesn't affair if your resellers are small, mid-sized, big or ginormous businesses. Since y'all're implementing a MAP policy in part to protect your distribution channels, tell them and so — conspicuously and right upfront. A manufacturer should let all of its retailers know immediately when a MAP policy is being adopted and that adhering to it allows them to accept healthy margins in add-on to selling high-quality, innovative products. Lastly, keep in listen that your policy will lose brownie if retailers notice any inconsistencies — especially in enforcement.

Monitor and enforce your MAP policy.

Minimum advertised pricing policies are just as skillful every bit the monitoring and enforcement put into them. And unfortunately, enforcement may exist the nearly challenging and time-consuming function of implementing a MAP policy. The skilful news is that software exists to automate monitoring and enforcement.

PUTTING Information technology ALL TOGETHER

Creating a company MAP policy for the first fourth dimension tin can seem daunting, particularly when the legal and brand image ramifications are considered. While having a MAP policy is of import for your brick-and-mortar retailers, it'south as important to take a level playing field with retailers or distributors who sell online by having an additional IMAP (cyberspace minimum advertised price) policy. In a time to come post, nosotros'll talk about creating a different strategy for IMAP implementation.