Channel IQ

312-585-3900

www.channeliq.com

55 W Monroe, 22nd Floor

Chicago, IL 60603

Channel IQ | Know What You Don’t Know Series:

How to Live with Amazon and Prosper:Managing an Effective Resale Price or MAP Policy in 2015 & Beyond

David Howell | VP Brand Strategy | Channel IQ

Eugene Zelek | Partner | Freeborn & Peters LLP

David Howell

IntroductionsToday’s Guest Speakers

Gene Zelek

3

“Action is the foundational key to all success.”

- Pablo Picasso

Living with Amazon:What is the problem? Simply put.

DIVERSION

3 Core Components to Protecting Your Channel

1. Reporting

• We have to first identify the problem affecting

our brand and where it’s occurring

2. Investigations

• We have to “know what we don’t know”- dive

deeper into the unknown

3. Enforcement

• Unless we actively have a strategy to

enforcement our reporting and research we will

never solve the “Problem”

6

Survey

Combating Resale Price

Erosion: Terminology

Combating Resale Price Erosion: Terminology

Minimum Resale Price (MRP) Program:

• Covers all offers and actual selling prices

Minimum Advertised Price (MAP) Program:

• Covers some offers, but never actual selling prices

Method: By Agreement or Policy

MRP: Policy only

MAP: Either agreement or policy

What’s the Difference?

Agreements: Require approval from other side to implement or change

Policies: Announcements that can be adopted

or changed anytime

What’s the Difference?

MRP and MAP Programs: Overall Trends

• More common in U.S.• Changing acceptance outside U.S.

• Reseller price matching & hostility

• Moving to second (or later) generation

programs

• Expansion beyond consumer durables

MRP and MAP Programs: Overall Trends more

• Addressing more behaviors to avoid cheating

• Better controlling distribution

• More sophisticated monitoring ability

• MRP and MAP: Penalties looking more similar

MRP and MAP Programs: Recent Developments

▪ Strong-dollar currency issues

▪ Contact lens cases and fallout

▪ Hybrid policies

• MRP + MAP

• MAP + Promo MAP

MRP and MAP Programs:

Recent Developments (More)

▪ B2B applications

• Point-of-sale reporting

• Accommodating cost-plus contracts

▪ Support for approach

MRP and MAP Programs: Ongoing Challenges

Clash: Long-term vs. Short-term

MRP and MAP Programs:Ongoing Challenges

Whack-a-mole enforcement

MRP and MAP Programs: Ongoing Challenges

The A-word: Amazon Facts of Life

▪ No cooperation with unauthorized reseller problems

▪ Rip-your-face-off contract provisions

▪ Inventory commingling

▪ The algorithm ate my homework & other excuses

▪ Only the nuclear option seems to work

MRP and MAP Programs:

Ongoing Challenges

Lack of resolve

▪ Vagueness

▪ May vs. will

▪ Lack of sting

▪ More than three strikes

Lack of Resolve: Policy Timidity

• Restarting the clock

• Bad behaviors allowed

• Ineffective monitoring

• No uniform enforcement or any

enforcement

Lack of Resolve:

Policy Timidity (More)

MRP and MAP Programs:

Ongoing Challenges

Rigidity

MRP and MAP Programs:Ongoing Challenges

Myopia

Myopia: Failure to See the Whole Problem

▪ Forgetting other means

▪ Overlooking business and legal conflicts & friction

▪ Neglecting distribution realities

Neglecting Distribution Realities

▪ Uncontrolled distribution

▪ Powerful resellers

▪ Multi-step implications

Multi-Step Implications

▪ Ignoring integrated resellers

▪ Inability to track products

▪ Invisibility of the indirects

And the Retailer of the Year is …

Drum Roll Please!

Outlook for the Future?

▪ Policy saturation

▪ Restrictive distribution

▪ More product differentiation

▪ E-tailer evolution and reconciliation

▪ New challenges

Q&A

Webinar Recap

29

Join us all year for our educational webinar

series!

Next Upcoming Webinar:June, 2015 “Channel IQ Annual Compass”

David Howell & Channel IQ Executive VP Kevin Potrzeba

ciqcompass.com

Thank You!

For additional information, please direct all questions to

David Howell and he’ll answer them as soon as possible.

David Howell: dhowell@channeliq.comDirect Line: 1-208-340-5866Channel IQ55 W. Monroe Street, 22nd FloorChicago, IL 60603www.channeliq.com

Gene Zelek: Freeborn & Peters LLP311 S. Wacker Drive, 30th FloorChicago, IL 60606www.freeborn.com