Report From the Front Line A Buying Group Roundtable
A subset problem of MAP, according to Mann, is one where manufacturers change MAPs to appeal to the customer, but short-change the dealer. For example, a vendor offers a product to a retailer with a $199 MAP and a wholesale price of $140 (30 points of margin for the dealer); later, the vendor changes MAP to $179 in order to be more aggressive on price, but doesn't change the $140 cost to the dealer.
"We see that as dipping into the retailer's till," says Mann. "Our viewpoint is that if you can't give a reasonable profit, then say it's open [MAP]." He adds that national chains don't necessarily want to see that happen. "When it's open, the national guys, who are pretty much price merchants, get a little nervous about it, because they never know if some [independent] in Kansas or Florida is going to run [a product] at $88 when they run it at $99. They shy away from it. What they really want is a MAP price that everybody abides by but that they can disregard; that reinforces their value story."
Mann says MARTA is trying to nudge suppliers. "What we say to manufacturers, gently, is this: 'If you're going to give an insufficient amount of profit by setting a low MAP price, the message to us is that you are catering to Wal-Mart or somebody like that,'" he says, suggesting that all dealers want is an equal playing field. Mann further explains, "We tell the manufacturers as best we can, 'If you're going to have a MAP policy, then there ought to be some kind of guidelines that are going to be followed. Otherwise, please don't say you have one.'"