Styling & Performance - June 2008 - (Page 36)

review mail-order catalogs and advertising now comb the Internet on a regular basis. Minimum Advertised Price—or MAP—pricing came on scene more than 10 years ago, and it has helped maintain brand integrity. One of the early proponents of MAP was Gale Banks Engineering. “We use MAP to protect our brand image. There is value in the box,” says Colin Banks, general manager of Azusa, California-based company. “Our jobbers, including the brick-and-mortar guys with overhead and operating costs, can make a fair proﬁt. Fair proﬁt is the keyword. There is fair and there is highway robbery. “MAP pricing is really designed to maintain the image of the company and to keep the Internet sellers honest,” he continues. “We built MAP into our agreement with wholesalers from day one. Companies that violate the policy get cut off.” First, it was the large mail order companies versus the mom and pop speed shops. The small speed shops complained that retail customers were sometimes able to purchase speed equipment at wholesale prices and sometimes for even less through mail order guys like Summit and JEGs. That argument seems to have ended because, for the most part, the big mail order houses and the large WDs are respecting (and sometimes promoting) both MAP and MVP pricing. Now the ire of the brick-and-mortar speed shops has fallen upon the Internet – especially those sites selling brand name speed equipment at ultra-low prices. Other than making the retail customer happy (especially if they manage to obtain high-quality brand name merchandise at bargain prices) this hurts the manufacturer’s and product’s reputation. If these brand name products are available at ultra-low bargain prices, what could they really be worth? Map logo,” Towle says. “We are simply offering manufacturers an opportunity to use the logo as an industry standard icon.” “We stick to MAP and MVP pricing,” said Patrick Saunders, director of Keystone Automotive Operations’ Western region, one of the largest high-performance WDs in the U.S. “We are one of the big guys and we need to set an example.” “The various policies [MAP, MVP or MRP] require due diligence, MVP GAINING GROUND and policies must be clear and in place to be enforceable.” In April 2007, MSD Performance started their Maximum Value Program (MVP), which establishes minimum resale prices— the price a consumer actually pays—for MSD Ignition, Superchips, Edge Products and Racepak. “MVP is a voluntary, authorized dealer program in which resellers sign up with MSD Products to become —Kevin Jones, Net Enforcers, Inc. an authorized dealer,” said Karen Sussman-Horgan of Sussco, who worked as a consultant to “While we do stick to the MAP policy, MSD on their pricing program. “Companies we don’t enforce the actual sales price in other ﬁelds are using the MVP concept. negotiated one on one,” Banks says. “I They include Hartman, Ping, Coach, Bose, don’t believe in setting the sales price. Michelin and Maytag. So far, it’s had a huge Our MAP policy is based on the advertised impact on the business. We’ve had to cut price (not the MSRP, rather the lowest off sales to some violators, but it’s going price a company can advertise), not the smoother than we anticipated.” actual sales price. If a dealer wants to sell Essentially, MSD Performance hoped to the product at a cheaper price and risk replace MAP pricing with this policy. Whethgoing out of business, they can do it. I er MVP will replace MAP pricing is still to be don’t recommend it, but they can do it if seen. According to MSD, MVP is working so they want to.” well that other companies—including comAccording to Performance Warehouse petitors—have contacted them for more Association Executive Director John Towle details. While most of these companies are (pronounced towel), more than 90 manunot yet ready to speak on-the-record of their facturers (identiﬁed in the PWA newsletter) plans, DiabloSport is, and we do expect have minimum advertised price (MAP) to see more companies using the MVP-like programs on selected parts in their line. pricing structure (with their own version of PWA has created a standardized logo which the name) later this summer. they encourage manufacturers to use to let DiabloSport—an MSD competitor—crejobber/retailers know which parts are supated its own pricing program called the ported by a MAP program. Minimum Resale Price, MRP, which is basi“No one is required to have a MAP procally a minimum resale price of its entire gram, nor is the PWA requiring use of the 36 Styling & Performance I Uniting The Specialty Parts Industry

Table of Contents Feed for the Digital Edition of Styling & Performance - June 2008

Styling & Performance - June 2008 Contents Soapbox Buzz Making Money with 1967-72 Chevrolet/GMC Trucks, Part II Red, White, Blue... & Green Limiting Installation Liability The House That Jack Built MAP vs. MVP Pricing Supply Line Distributor Directory

Styling & Performance - June 2008

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