By Lisa Johnston
New products on display at the American International Toy Fair, held in N
IRVINE, CALIF. – Toshiba recently notified dealers that it is extending to online retailers the minimum advertised pricing (MAP) policy it applied earlier this year to its TVs sold through brick-andmortar dealers.
Scott Ramirez, Toshiba’s product marketing and development VP, told TWICE that the move, which includes most of the company’s LCD TVs 32 inches and larger, essentially extends the previous MAP policy all the way through to the online checkout-cart and is intended “to help maintain and promote the premium nature of our products.”
Online retailers are expected to communicate the features and benefits of the Toshiba models in question to close the sale, and not rely solely on price to win the transaction.
In some cases in the past, retailers have listed products at full MAP, manufacturers’ suggested retail prices (MSRPs), or without any prices at all on the main listing page, requiring the customer to click through to the checkout cart to receive the actual selling price.
Many online consumers have grown familiar with the process.
By moving the MAP policy a step closer to the completion of the transaction, low-price-only focused retailers will have less opportunity to under-sell the market, while encouraging them to promote value, service and benefits in support of the listed item.
“As part of maintaining the value of our brand, we want our retailers to provide information and valueadded services and do not want price to be the sole factor in our retailers’ interactions with our customers,” Ramirez said. “Too often, the online retail experience becomes just about price and that is not the interaction that best promotes our products or delivers value to our customers.”
Those who fail to comply with the advertised pricing terms will face a series of penalties that increase in severity with repeated infractions, Ramirez told TWICE.
Toshiba, Ramirez said, will policy and enforce the policy directly with all dealers.
Toshiba’s effort is similar to an online Unilateral Pricing Policy (UPP) recently announced by LG Electronics and others. Ramirez said Toshiba stopped short of mandating the price the retailer actually charges a customer, keeping the policy focused solely on advertising – in this case all the way through to the checkout cart online.
Typical UPPs extend to the actual prices collected by the retailers. Recent court rulings have upheld UPP programs as long as manufacturers are working unilaterally and are not colluding with others to fix price levels, but some companies remain wary of the practice in these frequently changing and litigious times.
In contrast, MAP programs have long been exercised by manufacturers to help preserve and protect the integrity and value of products. Historically, violations have included penalties ranging from forfeiture of co-op advertising incentives to termination as an authorized dealer for a brand.
Manufacturers have often said low-ball pricing practices not only erode the profitability of the dealer taking the sale and the competitor losing it, they ultimately weaken the profit potential for electronics retailers and manufacturers everywhere. More so in the Internet age.
“We need to protect the investments we have made and recognize the investments that retailers in the marketplace have made and we think this revised MAP policy helps to accomplish that,” Ramirez said.
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