Amidst the glitzy world of cosmetics, where numerous brands compete for the spotlight, GlamourGlow (a pseudonym for confidentiality) has always succeeded in making a memorable impression. Renowned for their exceptional quality, their products have cultivated a dedicated fan base over time. But beneath the surface of their success, the variations in its products threatened to tarnish the image they had built.
GlamourGlow had meticulously set minimum advertised prices (MAP) to maintain brand integrity and ensure consistent pricing across various online retailers, including the e-commerce giant Amazon.
However, a comprehensive analysis conducted by their trusted e-commerce analytics partner revealed 764 instances of price violations by retailers on Amazon. These violations had serious repercussions for GlamourGlow, affecting their sales, brand image, and customer trust.
Among the myriad price violations uncovered by 42Signals, the most concerning were those related to GlamourGlow’s flagship products.
Take, for instance, their best-selling Kajal, with a MAP of ₹356. Seller A, aiming to undercut the competition, advertised it for ₹346, while Seller D priced it at ₹348. On the other end of the spectrum, Seller C boldly marked the Kajal at an exorbitant ₹495, significantly higher than the brand’s advised range. Seller B, not to be outdone, listed it at ₹390, again well above the agreed margin.
Similar price violations extended to other popular GlamourGlow products, including the Gift Kit, Hair Styling Gel, and Sunscreen. Seller A, with a disregard for the brand’s MAP policy, consistently priced their products lower, with the Gift Kit at ₹999, hair styling gel at ₹240, and sunscreen at ₹460, all below the recommended MAPs of ₹1001, ₹250 and ₹450 respectively.
These price violations aren’t merely an inconvenience for GlamourGlow; they have the potential to undermine the very essence of the brand.
The possible consequences for such instances can be dire; eroding profit margins, damage to the brand’s premium image, and even anger amongst their loyal retailers who adhered to the rules.
If GlamourGlow continued to ignore these price violations, their relationship with these retailers would have been at risk, as some would have begun to question the fairness of enforcing MAP policies. Moreover, the rampant violations would threaten to cannibalize sales from those retailers who played by the rules, creating a sense of unfair competition within the market.
In light of this predicament, GlamourGlow would have to take immediate action to address these price violations.
These would include strategic campaigns to enforce their pricing policies, ensuring that rogue retailers were warned and penalized, if necessary.
Another measure would be to invest in comprehensive price violation monitoring tools that would provide real-time insights and actionable data. By doing so, GlamourGlow would be able to regain control over its pricing strategy, protect its brand’s integrity, and restore equilibrium within its retailer network.
Are you encountering similar challenges with retailers on e-commerce platforms in your business?
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