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Legal Definitions
I.A.J.E. Jan 2005
M.A.P. Price

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M.A.P. Price

M.A.P. Price = Minimum Advertised Price

Please read about what this is and why it exists....

In today's retail environment, many retailers choose to compete solely on price. From a consumer perspective, lower is better -- all other things being equal. The arrival of the internet as a comparative shopping tool makes price shopping between retailers very efficient for consumers. This price competition is wonderful for consumers searching for commodity items and packaged goods for which the only significant differentiation factor between sellers is the price.

However, for complicated products, requiring extensive product knowledge and training to sell and service, this low price model presents the retailer with a challenge. Training and servicing of complex products require investments and costs not associated with the sale of commodity products. As retailers fight each other, the retail price is lowered in order to compete and profits are reduced. As the retailer searches for ways to restore profitability, sales competence and expert servicing of  product are the first things to get cut out of the offering  in an effort to retain a reasonable return on investment on a low price sale. This leads to improper sales advice to consumers, inadequate service and poor adjustment of complex products. All of this lowers the satisfaction of the end consumer with the product. Ultimately, if the dealer sees the market price as too low to sustain in a reasonable manner, the product will simply be dropped from his offering altogether and the product becomes difficult to find. Low price, initially a positive for the consumer, can become so low that the consumer ends up not getting what he bargained for.

From a manufacturer's perspective, when dealers refuse to sell or offer a product due to the absence of a sound business reason for doing so, the manufacturer has reason to become concerned. When its products are offered, but in a fashion out of step with the manufacturer's standards for sales and service, the manufacturer has a reason to become concerned. When top quality products are perceived by consumers as comparable to inferior products or unsatisfactory because of the inadequate manner a retailer sold or serviced or delivered the product to the consumer, the manufacturer has a reason to become concerned.

An even worse situation occurs when the retailer advertises the product for sale and then attempts to bait-and-switches the consumer to another product, proclaiming quality just as good (and, of course, more profit for the dealer).

Manufacturer's who sell high quality products and especially those requiring skill and expertise in the sales and servicing of those products often establish Minimum Advertised Prices (M.A.P.) as a means of encouraging a fair and reasonable selling price so that consumers can ultimately receive the availabilty, expertise and service deemed to be in keeping with the manufacturer's standard of quality for that product.

Saxophones are certainly complicated products, starting life as in excess of some 600+ individual parts. They must be  correctly assembled and adjusted in order for the inherrent quality of a particular model to be evident to the player. Given the choice of so many truly excellent models today, the seller should be VERY knowledgeable in order correctly recommend a particular model for a player's needs. So, saxophones are natural products to considered for a M.A.P. policy by top quality manufacturers.

While manufacturers can, by law, set M.A.P. prices, its dealers are under no obligation to abide by these prices in its advertising or when the product is sold. In order to lever dealers to publish only the M.A.P. price or higher in advertising, manufacturers can wield a big stick, by witholding valuable bonuses or discounts to dealers who do not comply and by denying access to products in the case of violations of its policy. These policies have several common requirements and limitations:

a) The Minimum Advertised Price is determined by the manufacturer or US distributor.

b) Serious consequences result to the dealer for non-compliance.

c) Dealers can not suggest that prices lower than M.A.P. are available in an actual sales transaction where M.A.P. prices are shown.

d) Dealers are, by law, able to establish any actual retail selling price they choose, as long as prices lower than M.A.P. are not advertised in any media including the internet.

e) As long as price discussions between buyers and the dealer are private, M.A.P. policies do not apply.

Manufacturers can also impose a resale selling price policy, limiting the minimum price at which products are sold. This is different from a M.A.P. policy and a more effective and more extreme step. It is much more difficult to enforce. Consequently, no manufacturer or distributor of saxophones has such a policy in effect at this time.