It’s Not About the Price Tag: The Purpose of Minimum Advertised Pricing Policies

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With the world’s constant technological advancement, business strategies also continue to evolve. Traditionally, when shoppers don’t have a specific brand in mind, they visit actual stores to look for a suitable product. Today, however, people conduct their own initial research to develop an idea on which brand best meets their standards. In fact, online information in the form of testimonies and product reviews can affect the purchasing behavior of consumers.

Considering how today’s consumers are fully capable of educating themselves on wide arrays of brands, their exposure to a business is vital for its success. That is exactly why advertising is essential. It’s the backbone of all industries and the foundation of all purchases.

Social media users spend about 135 minutes every day on social networking sites, and that figure continues to grow each year. Granted, the majority of enterprises continue to solidify their online presence to reach their target market.

Pricing in Digital Ads

Minimum Advertised Pricing

Most digital advertisements are composed of a copy (text) and graphic design (image), which work hand in hand to convey a message. Although it’s highly important for the advertising copy to include the features and details of the product or service, it’s also vital to include prices.

However, you need to ask these questions: What exactly is the guideline that digital selling platforms follow when it comes to pricing? Are there limitations to how low they can advertise their products’ corresponding prices?

Minimum Advertised Pricing

Minimum advertised pricing (MAP) policy sets the lowest possible price a seller can advertise a product for sale. This, by no means, signifies that it is the lowest price retailers can sell the product for in their stores. It’s only the lowest that they can show it in an advertisement.

Retailers are legally allowed to sell the product at a lower price point, granted that they will not advertise the product with the same price. This rule applies to both online and print media.

What exactly is the MAP policy for? This policy serves as protection for manufacturers of the goods. Generally, if customers begin to perceive that they can purchase a product for a much lesser amount than the manufacturer’s suggested retail price (MSRP), they may conclude that the MSRP is overpriced. Hence, no one will want to pay for the goods in their MSRP again.

This makes MAP an agreement between the manufacturer and the retailer, and not the competitors which sell the products. Therefore, in a nutshell, this explains why the same products are being sold at varying prices.

As a consumer, it’s important to be aware of MAP-protected products or the policy itself in general. This will allow you to make wiser purchasing decisions. Although the MAP policy limits the advertising price, it doesn’t affect the actual retail price. Read the description carefully and ask the retailer some questions to know if the product you desire is reasonably priced. By comparing the MSRP with the actual retail price, you’ll know if you are getting a good bargain.

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