Minimum Advertised Pricing (MAP) policies generally depend on how well the arrangements work between the supplier and distributor, relying on the online distribution platform or brand recognition to get their products moving at the rate that they want it to. That has always been the model for MAP policy enforcement and has worked quite well so far.
However, the market today is shifting towards a more consumer-centric point of view, where brands themselves are no longer fully in control of the price of which their goods are valued. The internet has made it much easier to compare and contrast goods, and savvy marketers should always remain ahead of the curve to come up with the best MAP policy for their goods.
In particular, that means paying attention to social media.
Social media has been one of the greatest drivers in digital marketing campaigns. The engagement levels found in normal, peer-to-peer interactions are far more reliable than any activation event. Product reviews via social media are generally seen as more trustworthy than advertising, which means that the value of a product (unless a necessity) can be shaped by social influence.
In addition to that, since most brands implement some form of MAP pricing to maintain a fixed price point across all retailers, social media and its awareness of the brand will definitely play an important role in determining those prices. Failure to take this into account may cause you to under or overvalue your product, with disastrous results.
If you are looking to get more involved in social media when it comes to setting your MAP, you will need to do a little bit of research. While you can reasonably come up with a MAP policy depending on the geographic reach of your distributors (or alternatively, the target demographic online), it’s safer to implement strategies like social listening and consumer feedback before setting hard limits on your policy enforcement.
Remember that it is important your MAP policy allows a certain amount of leeway for your distributors to make profits of their own, and avoid triggering any anti-trust laws. Not only does this give you a certain amount of freedom when it comes to pricing, but it also opens negotiations between you and your retailers as to the ideal rate for maximum profit.
When thinking about MAP policies with the framework of social media, it is a good idea to take the viewpoint of both your customer and distributor. Ask yourself these questions to be able to formulate a more accurate MAP that works for both you and your customer base: Can this product be bought somewhere else? Can you simply cut out the intermediary and go straight to the manufacturer? What is your opinion on the brand behind this?
And of course, you cannot forget the relationship you have with your distributors as well. If they have active social media presence of their own, consider those when it comes to setting MAP policies since they can also be considered a brand unto themselves.