To MAP or Not to MAP, That is the Question

We received a letter recently from Logan announcing that the company would be dropping its Minimum Advertised Price (MAP) program at the end of 2009. In the letter, posted below, they did not site reasons, but this bold act makes us want to take stock of the so-called benefits of MAP programs. On the one hand, MAP offers some protection to both small retailers and big brands from destructive and unproductive price wars, and on the other, it can stifle honest competition, impede pricing that benefits consumers and some even say give an unfair advantage to the largest retail outlets, either internet based or brick and mortar. We would love to know what you think. There is a spot below for you to add your comments. There is nothing like a full blown dialogue to add light to a complicated subject.

Revised Letter:

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4 Responses to “To MAP or Not to MAP, That is the Question”

  1. doart1 Says:

    What is Logans reason for eliminating MAP pricing?

  2. frank Says:

    It would only be speculation on my part, as they did not share their rationale.
    Since I first responded I received this note from Logan providing an explanation for their action as well as submitting a revised effective date and letter:
    Hi Frank,

    I hope all is well with you and business is good. I wanted to contact you about the recent listing you put in the Art Dog Blog about our MAP program.

    The letter you posted in your blog was the original MAP drop letter I sent out in March 2009. That letter stated that Logan made a company decision to drop our MAP Program as of January 1st 2010. Shortly thereafter, the state of Maryland ruled that MAP programs were to be illegal as of October 1st 2009 and I learned that 30 other states had similar legislation on their dockets. Not long after the NAMTA show this year, I sent out a revised MAP letter to all our dealers stating that because of this ruling, we are forced to drop our MAP program earlier on October 1st. That revised letter is attached to this email and it includes a link to read more about this ruling. I want to make clear that our reasons for dropping our MAP in October is primarily due to this ruling although we did had full intention of canceling our MAP program for 2010.

    Can you post the revised June 2009 letter attached instead which will hopefully clear up some of the confusion? Thanks and let me know if you have any questions.

    Sincerely,
    Brian Buell
    Director of Sales
    Logan Graphic Products, Inc.
    1100 Brown Street
    Wauconda, IL 60084
    800-331-6232 ext 27

  3. squarepeg Says:

    I just don’t see how limiting how deeply a product may be discounted in advertising stifles competition or creates an unfair advantage for bigger dealers. And regardless of how you feel about Minimum ADVERTISED Prices, a manufacturer should be able take steps to protect the value of their brand.

  4. dancewosleeping Says:

    Squarepeg: Yes at the most basic level you’re right…retailers should advertise whatever sale price they’re able to sustain. But the root problem is that it’s not a level playing field. When my direct competitor 6 miles away gets substantially better margins from the same suppliers than I do, they can afford to discount deeper and still make the same margin I do, and there’s no way I can compete with that. And no, I’m not talking about a big major chain store. With a minimum discount set in place, my competitor might be making more, but at least I still have a shot at the customer.

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