How Do MAP/MRP Policies Help Pet Owners?
Last week, Frank Frattini, CEO of The Hungry Puppy—an independent pet store in Farmingdale, N.J.—responded to my recent blog about pet retailers' concerns about the future. The blog covered a number of issues that were raised by independent pet stores at a meeting held at last month's SuperZoo tradeshow, with the need for well-constructed and enforced MAP and MRP policies among the industry's vendors at the top of that list. In his response, Frattini disagreed with this point of view and offered up what I believe is a valid question: How do customers fit into the whole MAP/MRP equation?
Here is his message, in its entirety:
"I read with great interest your article on the concerns of the future of pet retailers. Sorry my invitation to the private meeting in Vegas must have gotten lost in the mail. But anyway, I have one question for you, as well as any retailers that may have been at that meeting: Since they all DEMAND that they receive protection in the form of MAP or MRP from the manufacturer, how does that HELP/BENEFIT our customers? I’m hard pressed to figure out how those policies tie in with a 'customer centric' approach retailers tend to espouse. After reading your article, I get the impression that the retailers that were at that meeting felt that they were not just free to try and be successful retailers but are instead actually ENTITLED to be profitable as they mandate price protection from manufacturers. Sounds to me more like the 'everyone gets a trophy even though we’re not competitive' syndrome, to which I do not subscribe.
"I open the question to you, Mark, or someone who attended the meeting—or even a manufacturer—to please tell me how these policies will HELP my customers' experience? Aren’t customers also a partner in the relationship… or should they just be treated like sheep waiting to be sheared?"
Frattini's question resonated with me because it made me realize that the impact of MRP and MAP policies on customers—and more to the point, are they ultimately good or bad for pet owners—is a subject that Pet Business has never really explicitly addressed in any of our coverage. With that in mind, I felt an answer from one of the retailers at the forefront of the MAP/MRP issue would be useful in furthering the conversation about why the right approach to pricing will benefit everyone in the supply chain, including customers.
Fortunately, Mark Witriol, one of the owners of the 63-store Pet Food Express chain in California (Pet Business' 2017 Retailer of the Year) was kind enough to share his thoughts on the subject:
"Customers want choice. Some choose to buy at the lowest price possible, but others want service, selection and recommendations. Many want new, even cutting-edge products. Without large marketing campaigns, the availability and benefits of these emerging brands and products usually need to be demonstrated and discussed directly with a customer. In most cases, this only happens in brick-and-mortar retailers.
"The independent pet retailers we know are happy to compete in any type of market, but the online market has become predatory. Many, if not all, of the online retailers are not profitable. They are willing to lose money for a long time to grow market share so they can sell to private equity. This unfair competition isn’t allowed or part of a free market. Of course, once the independents are gone, there would be no choice for customers—they would have to buy online and then prices would rise significantly.
"Without independents, there would be no outlet for the emerging brands because there would be no place where customers could discover these new products, touch them and get informed advice. The best manufacturers already know that independent pet retailers are the ones who can and have built their brands. Manufacturers with the strongest growth in the pet industry are the ones who have worked closest with the independents. Those manufacturers have all embraced effective MAPs because those WORK for THEM TOO!
"Please note that not all MAPs are effective, but the better ones are and contribute to a healthy, dynamic pet market with many choices. Everyone wins, including the online companies, when the entire industry continues to innovate and grow. And that’s good for customers."
Now that Frattini and Witriol have contributed their thoughts on the subject, we want to hear from you. Do you feel that MAP/MRP policies are ultimately good or bad for customers? Let us know by emailing me at email@example.com.