What is map pricing?

Map pricing, short for Minimum Advertised Price, is a strategy used by manufacturers to establish a minimum price at which their products can be advertised by retailers. The purpose of map pricing is to prevent price erosion, maintain brand value, and protect retailers from engaging in price wars.

Under map pricing agreements, retailers are not allowed to advertise products below the minimum advertised price set by the manufacturer. However, they are still free to sell the products at any price they choose in-store.

Map pricing helps to create a level playing field for retailers and prevents undercutting of prices, which can ultimately devalue the brand and decrease profit margins for both the manufacturer and retailers.

Manufacturers often enforce map pricing by monitoring retail advertisements and taking action against retailers who violate the set minimum price. Enforcement methods may include warnings, fines, or even termination of the retailer's ability to sell the product.

Overall, map pricing is a useful tool for manufacturers to maintain control over their product pricing and ensure a consistent brand image in the marketplace.