Case Study. MAP Monitoring: How to Save Competitiveness

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The client is one of the largest manufacturers of ready-to-assemble furniture in Europe. The company operates its own factories across several Eastern European countries and distributes its products both independently and through a network of regional dealers.

The products are widely available in specialized furniture stores and large retail chains. Additionally, the company’s brands are sold by over 200 online stores. However, many sellers are consistently setting price dumping practices, including for products imported into the country without paying taxes and duties.

PROBLEMS

проблемы

Online Stores Do Not Adhere to MAP

Problem #1

Customers Browse Furniture in Retail Stores but Purchase Online

Customers visit furniture and retail chain stores, view products, consult with sales staff, and make their choice. However, they then go home and order the same product on online store websites, where the price is significantly lower.

Problem #2

Price Dumping Results in Profit Loss and Partner Attrition

Large retail chains as well as specialized furniture stores, have begun reducing the floor space allocated to the client’s products, citing low sales.

Dealers are refusing to work with the company’s products, replacing them with other brands. Dealers continuously report price dumping in online stores, which forces them to lower their prices as well.

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SOLUTION

решения

MAP Monitoring to Track Prices in Online Stores

The client was offered an assessment of the market size and, consequently, the scale of the problem to be addressed.
  1. We conducted a search to determine the brand’s online presence and compiled a list of all stores selling the company’s products. Priority stores were identified and included in the MAP monitoring process to track product prices on their websites.
  2. A policy for working with online stores and dealers was developed, along with tools to influence violators and major Ukrainian marketplaces. Additional agreements were signed with all dealers and online platforms that work directly with the company.
  3. The company designated an employee responsible for daily market analysis and ensuring compliance with the company’s pricing policy by online stores.
  4. The client provided the initial data: a list of products with MAP pricing and a list of 50 online stores. After configuration, a price parser was launched on a daily basis.
  5. Once order was restored in the first 50 stores, new websites were added to the monitoring process. Test purchases in online stores with price dumping helped identify the supply channels for these products.
  6. The company raised the issue of terminating cooperation with dealers and online stores that violated the “rules of the game”.

RESULT

результат

MAP Monitoring and Online Price Control Reduced Price Dumping by 10 Times

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  • At the beginning of the project in December 2016, virtually every online store was selling the product, ignoring the manufacturer’s MAP.

  • Six months after starting the work, the price analysis revealed that fewer than 5% of online platforms were violating the manufacturer’s sales policy and trademark rights. Price dumping dropped by several times.

  • The reduction in the floor space allocated to the client’s products in furniture and retail stores stopped.

  • The fight against price dumping yielded results. A flow of new clients from dealers, online stores, and retail furniture stores began.

    The company has been collaborating with Price Control for 8 years, as MAP monitoring and market control is a systematic process. The price data from online stores, which the company receives daily from Price Control, helps keep the market stable.

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