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Brand Power: Mastering Pricing, Distribution, and Marketing for Emerging Consumer Brands

In today's dog-eat-dog retail world, new brands often struggle to get sales reps, attain shelf space and compete against bigger, well-established players. For many, the e-commerce boom has made matters worse, as unstable pricing can hamper efforts to develop a stable image and pricing and distribution strategy. Fear not! By setting the right prices, adopting effective policies, and maintaining control over their online sellers, smaller brands can rise above the competition and have market trends on their side. Let’s review how these strategies can help up-and-coming brands earn consumer trust, stand out from better-established brands, and increase sales.

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Know Your Worth

What’s your product actually worth? Sure, your cost is your cost but it’s only worth whatever a consumer will pay for it. Competitive products, unique products, commodity products, and luxury and specialty products are all priced differently with varying margins all based on the fluid question of what will they pay.

Time was that a brand could set the mark to impute a value and the retail store would sell it for that amount. You could say that the brand/retailer duo influenced the price the most. Any changes based on demand were slower because of the separation of brick-and-mortar locations. But now, in Ecommerce, the one determining the value is the retailer/consumer duo. The brand, for the most part, sits on the sidelines and watches the value of its products fluctuate in near real-time. Sometimes the swings in prices are wild, mostly going down as online sellers use price as the sole competitive tool.

For many brands this is unacceptable. The potential results can hurt the image of its products, not to mention the margins and retailer demand. Stable pricing is required to truly understand the brand value. Large price variances make predictability difficult and thus, make planning inventory, marketing strategy, and wholesale pricing a dart game.

For newbie brands, building a solid reputation and understanding their products' worth can be tough. That's where planned and controlled distribution plus MAP policies come in. They help maintain consistent pricing and build trust with customers and partners. But to really understand a brand's value, you need stable prices. Wild price swings make it hard to predict demand, which can hurt inventory planning, marketing, and wholesale pricing, ultimately eating into profits.

The bottom line? To figure out the true worth of a product, you need to consider consumer behavior, demand, competitors, production costs, and marketing expenses. With a well-rounded approach to pricing and constant market monitoring, brands can price their products to reflect their actual value and ensure a healthy profit margin for all.

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Why Smaller Brands Need MAP Policies

MAP policies set a minimum advertised price for products, which is essential for brands trying to establish themselves. By setting a minimum price, you can differentiate your products from competitors and make them more appealing to reps, retailers, and consumers.

MAP policies also help smaller brands avoid price wars on e-commerce marketplaces like Amazon or Walmart. Without a MAP policy, both in-store and e-commerce retailers might engage in aggressive price competition, leading to a race causing price drops. This can hurt new and small brands by decreasing margins and damaging brand perception. MAP policies help smaller brands protect their margins and uphold their image.

MAP policies can also give retailers and sales reps more confidence to take a chance on smaller brands. Brands that watch their distribution and pricing are less of a risk for the sellers. That’s because stable pricing helps them determine their catalog, order the right quantities and decide which products to promote. By implementing a MAP policy, smaller brands can build trust and credibility, reduce risk, and create a reliable revenue stream, ultimately leading to growth and profitability.

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Why Smaller Brands Should Have an Authorized Reseller Strategy

Besides adopting a MAP policy, new and smaller brands should limit the number of online sellers that carry their products. Here's why:

1. Consistent Pricing and Perceived Value: Too many online sellers can lead to inconsistent pricing and branding (images, product descriptions, diverters, etc.), which can damage a product's image and value. Determining who and how sellers list your brand makes it easier to enforce MAP policies and prevent a race to the bottom in pricing.

2. Reducing Channel Conflict: Controlling the number of online sellers helps small brands avoid channel conflict, which occurs when different retailers or sales channels (e.g., specialty vs mass market) compete for the same shopper. This conflict can be especially harmful for small brands that may not have the resources to manage it effectively.

3. Building Strong Relationships: By limiting online sellers, and maintaining stable margins, small brands can create a more exclusive product offering and foster greater loyalty and support from retail partners. This can ultimately lead to increased profitability and growth for the company, as well as a stronger position in the market.

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Crafting a Winning Strategy

To succeed in the highly competitive retail ecosystem, new and smaller brands need to optimize a comprehensive strategy that combines the benefits of Authorized Resellers, MAP policies, and IP control. Controlling the number of online sellers helps reduce the risk of channel conflict, maintains consistency in pricing and branding, and strengthens relationships with retail and sales partners. By implementing a MAP policy, these brands can maintain stable pricing and protect their brand image, while also fostering trust and credibility with both old and new customers and partners.

To make this happen, smaller brands should:

1. Develop a MAP policy that dictates the minimum advertised price for each product and what retailers risk for non-compliance. Communicate this policy to all stakeholders and make sure it's consistently enforced.

2. Consistently monitor e-commerce to catch any MAP policy violations. This might involve using brand protection companies like MAPP Trap to track pricing and enforce policy compliance, as well as staying in touch with retail and sales partners to address any issues.

3. Develop an Authorized Reseller strategy to carefully select which online sellers can carry your products. Develop criteria for vetting sellers, such as their transparency, reputation, sales volume, treatment of customers, and commitment to upholding your brand's value and pricing strategy.

4. Communicate with retail and sales reps to make sure they understand your pricing strategy and distribution goals. Offer training and support to help them grasp the importance of MAP policies and maintain a network of authorized sellers.

5. Regularly evaluate your brand's pricing strategy and distribution and make changes as needed. Analyze sales data, conduct market research, and invite feedback from customers and sales reps to identify areas for improvement and keep your brand competitive.

New and developing brands can improve their odds of success by adopting MAP policies and Authorized Reseller strategies to control the number of online sellers carrying their products. These best practices help build trust and credibility to create a more positive partner and customer experience s, distinguish products from competitors, and ultimately increase margins, brand perception, and market strength. By crafting a comprehensive strategy that combines MAP policies and controlled distribution, smaller brands can overcome retail hurdles and rise to the top. You can take our quiz here to see what your BPQ (Brand Protection Quotient) is!


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Guides & Tips

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