Minimum Advertised Price (MAP) and Manufacturer’s Suggested Retail Price (MSRP) represent distinct approaches to pricing strategies. MAP establishes the lowest price a retailer can advertise a product, while MSRP is the price a manufacturer recommends the product be sold for. For example, a television manufacturer might set an MSRP of $1000, but stipulate a MAP of $800, meaning retailers cannot advertise the television for less than $800 even if they choose to sell it for less in-store.
The use of MAP helps to protect brand value and maintain profit margins for both manufacturers and retailers, preventing damaging price wars. It supports a consistent pricing image across various sales channels, ensuring consumers perceive the product as premium or high-quality. Historically, the implementation of these pricing models has stemmed from the need to manage distribution channel relationships and preserve retailer incentives to invest in product promotion and customer service.
