Solving the Brand Commodity Threat Problem

You produce a big-ticket item that is different from anything else on the market, and consumers can’t seem to get enough. Your product offers an intrinsic value that people understand, appreciate, and are willing to pay for, right?

Actually it’s not exactly that simple. Your product’s value is determined at least in part by its price. Consumers are willing to pay more for an item when they can see the difference, but what happens when they can’t? If you don’t have a minimum advertised price policy in place, your brand could become a commodity faster than you might think.

Confusing the Consumer

When consumers search for your products and find various prices for the same product, they’ll keep looking for the cheapest price. The threat of your brand becoming a commodity increases because of the inconsistency in pricing and having no control over what it’s being sold for.

What This Means for You

Since price is a big factor in understanding value, you can see why lowering the price of your products could not only reduce your revenue but could actually diminish the value of the products themselves. This happens when retailers compete against each other solely by attempting to be the seller who offers the lowest price, and it’s very common in today’s age of eCommerce.

Once consumers don’t see a price difference, there is nothing to keep them loyal to your brand, and they may not see a good reason to choose your product over another. This leaves your business in a complicated situation.

Prevent the Problem with MAP

There is something you can do to avoid this, however. Implement an authorized dealer network with a minimum advertised price (MAP) policy to ensure that price drops don’t cause your brand to become a commodity. With an effectively managed MAP policy, sellers must compete for customers based on other factors than price, such as providing excellent customer service. Selling through an authorized dealer network means that only the retailers you approve may sell your products, and when they do so, they may only advertise them at or above a price you specify. MAP also allows brick and mortar stores to continue being competitive in the face of challenges from online retailers. This give you more exposure for your brand and more knowledgeable salespeople championing your products.

If MAP sounds like too much work, don’t worry. An automated tool streamlines the monitoring process for you so that you aren’t spending your days searching for violators online. Learn about how ORIS Intel’s PROWL can help you protect your brand by scheduling a demo today.