Drafting a Minimum Advertised Price (MAP) policy can be a critical aspect of a manufacturer’s or supplier’s overall business strategy. MAP policies help to maintain brand image, support resellers, and avoid price wars. However, creating such a policy needs careful planning and execution to ensure legal compliance and effectiveness. This article will guide you through the do’s and don’ts of drafting a MAP policy.
1. Understand the Legal Landscape: Before you start drafting your MAP policy, make sure you have a clear understanding of the current legal landscape. In the United States, MAP policies are legal as long as they don’t limit competition, but the details can vary by country. It’s always wise to consult with a legal expert to ensure you’re operating within the bounds of the law.
2. Clearly Define the Policy: Your MAP policy should clearly define what constitutes a violation. Is it when a reseller advertises below the minimum price on their website, in a brick-and-mortar store, or in an email? Be sure to include explicit details about what advertising media are covered under your policy.
3. Set Fair and Reasonable Prices: Your MAP pricing should be fair and reasonable, both for consumers and for your retailers. It should allow retailers to make a reasonable profit while also ensuring that the product price doesn’t devalue your brand.
4. Communicate the Policy Clearly: It’s crucial to communicate your MAP policy to all your resellers clearly and consistently. Ensure they understand the policy, the reasoning behind it, and the consequences of non-compliance.
5. Monitor and Enforce: Monitoring compliance with your MAP policy is as important as drafting it. Use automated MAP monitoring software to keep an eye on prices across all your resellers. If you discover violations, enforce the policy consistently and fairly.
1. Don’t Fix Resale Prices: While a MAP policy sets the minimum advertised price, it should not dictate the actual resale price. The reseller should always have the freedom to sell the product at any price they choose, even if they can’t advertise it below your set minimum.
2. Don’t Discriminate Among Resellers: Your MAP policy should apply to all resellers equally. Discriminating between resellers could lead to legal issues and could damage your relationships with them.
3. Don’t Ignore Violations: Ignoring violations can undermine your MAP policy’s effectiveness and encourage more violations. Ensure that your policy has consequences for violations and that you enforce them consistently.
4. Don’t Forget to Review and Update: Your MAP policy should not be static. Market conditions, competitive landscapes, and legal rules can change, so it’s important to review and update your policy regularly.
5. Don’t Draft Without Legal Counsel: Creating a MAP policy involves many legal intricacies. To ensure you’re not stepping into any legal pitfalls, don’t draft a MAP policy without consulting a legal expert.
Drafting an effective MAP policy involves understanding the legal landscape, setting reasonable prices, communicating your policy clearly, and monitoring and enforcing it consistently. Avoid fixing resale prices, discriminating among resellers, ignoring violations, or forgetting to review and update your policy. And remember, always consult with legal counsel when creating your MAP policy.