What is the definition of minimum advertised price?

"-COLOR: #" size="3" face="Arial">MAP Pricing - What is it? =

Minimum Advertised Price (MAP Reicing) is the practice whereby a manufacturer and its distributors agree that the latter's resellers will advertise the former's product at certain prices, at or above a price floor (minimum advertised price).

These rules prevent resellers from competing too fiercely on price, thus driving down profits and lowering the manufacturer's reputation as a creator of quality made products. A manufacturer may do this because it wishes to keep resellers profitable, and thus keeping the manufacturer profitable. Others contend that minimum advertised price maintenance, for instance, overcomes a failure in the market for distributional services by ensuring that distributors who invest in promoting the manufacturer's product are able to recoup the additional costs of such promotion in the price they charge consumers. Manufacturers also defend retail minimum advertised price by saying it ensures fair returns, both for manufacturer. According to such agreements, retailers can usually sell M.A.P. restricted items for any price they choose, but may not display in any print or online advertising, a price below the Minimum Advertisable Price.

MAP Pricing enhances customer loyalty, product image and profits. Minimum Advertised Price or (MAP) requirements are common in the marketing world. Manufacturers often assign a minimum price point below which a retailer cannot advertise certain products. MAP pricing ensures that their product maintains a certain level of exclusivity and doesn't become known as a cheap product. A Minimum Advertised Price (MAP) Policy alleviates brand degradation and reinforces the advantages of products in the areas of quality, design, warranty, and service delivered by the manufacturer. It will protect stocking dealers from "unfair" online competition and makes sure that everyone makes money.

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