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First Take: All Over the MAP

March 3, 2008

No one likes deceptive advertising. I personally find it infuriating—as an editor and as a consumer—when a manufacturer plays games with pricing for a product that I''m interested in. For example, a microphone might have a manufacturer''s suggested retail price (MSRP) of $999.95—a number that is already designed to make you think you''re not spending a grand—but it might also have a minimum advertised price (MAP) of $349. Obviously, the company wants you to feel like you''re getting the deal of a lifetime. But what''s really going on? How can a consumer realistically compare products around a list price of, say, $1,000 when some of them actually sell for less than half that?

Manufacturers often set a minimum advertised price (MAP) to protect their dealers. Such vertical price restraints level the playing field so that retailers can offer the consumer a perceived discount on a product while maintaining enough of a profit margin. This is particularly important where a Web-based retailer, which probably has less overhead and can work on smaller margins, would be inclined to undercut the prices of a brick-and-mortar seller. Of course, there''s no way to keep a retailer from selling an item below MAP if it wants to; it just can''t advertise the lower price. (No doubt you''ve seen ads with the line “Call for the Lowest Price”—now you know one reason for it.)

Until now, EM''s policy has been to list only the MSRP for products, but this has become increasingly difficult to maintain, because MSRP has become decreasingly believable. More and more, we are asked during fact-check to run a MAP or street price rather than the MSRP. (Because street prices are difficult to pin down, we prefer not to use them, although sometimes street price and MAP are the same.) Manufacturers'' requests to run a ridiculously low MAP have sometimes been followed by the admission that “no one in their right mind would pay MSRP for this product.” Okay, so why set such a high list price? The replies I''ve received have never been satisfactory.

Consequently, few companies have an MSRP that is meaningful. In fact, it is common for us to be given a MAP or street price while being told that there isn''t an MSRP. Obviously, that makes no sense.

This month EM will begin running minimum advertised prices (except when an MSRP is requested by a manufacturer) in order to better clarify the actual value of the products we cover. That way, when you read that a mic preamp has a MAP of $299, you''re seeing what it''s actually worth rather than, perhaps, a falsely inflated price. This change will have the biggest impact on our roundups where we set price caps, because it will allow products to be judged on more of an equal footing than ever before.

Sure, everyone likes a bargain. But no one wants to be jived into thinking that an inexpensively produced item is worth more than it is. So before you drop your hard-earned cash on something that lists for more than double the MAP, do your research and be sure you''re getting what you pay for.

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