The manufacturer's suggested retail price (MSRP), list price or recommended retail price (RRP) of a product is the price which the manufacturer recommends that the retailer sell the product. The intention was to help to standardise prices among locations. While some stores always sell at, or below, the suggested retail price, others do so only when items are on sale or closeout/clearance.
The term is also backronymed to monroney suggested retail price, after the Monroney sticker which required that the MSRP of new cars be displayed.
Suggested pricing methods may conflict with competition theory, as it allows prices to be set higher than would otherwise be the case, potentially negatively impacting consumers. However, resale price maintenance goes further than this and is illegal in many regions.
Much of the time, stores charge less than the suggested retail price, depending upon the actual wholesale cost of each item, usually purchased in bulk from the manufacturer, or in smaller quantities through a distributor.
Suggested prices can also be manipulated to be unreasonably high, allowing retailers to use deceptive advertising by showing the excessive price and then their actual selling price, implying to customers that they are getting a bargain. Game shows have long made use of suggested retail prices both as a game element, in which the contestant must determine the retail price of an item, or in valuing their prizes.
Additionally, the use of MSRP and SRP have been confused. In certain supply chains, where a manufacturer sells to a wholesale distributor, and the distributor in turn sells to a reseller, the use of SRP is used to denote suggested reseller price. In that case MSRP is used to convey manufacturer suggested retail price.
Read more about Suggested Retail Price: United States, India, United Kingdom, Minimum Advertised Price, Rack Rate
Famous quotes containing the words suggested, retail and/or price:
“The hounding of a dog pursuing a fox or other animal in the horizon may have first suggested the notes of the hunting-horn to alternate with and relieve the lungs of the dog. This natural bugle long resounded in the woods of the ancient world before the horn was invented.”
—Henry David Thoreau (1817–1862)
“A free-enterprise economy depends only on markets, and according to the most advanced mathematical macroeconomic theory, markets depend only on moods: specifically, the mood of the men in the pinstripes, also known as the Boys on the Street. When the Boys are in a good mood, the market thrives; when they get scared or sullen, it is time for each one of us to look into the retail apple business.”
—Barbara Ehrenreich (b. 1941)
“The price we pay for the complexity of life is too high. When you think of all the effort you have to put in—telephonic, technological and relational—to alter even the slightest bit of behaviour in this strange world we call social life, you are left pining for the straightforwardness of primitive peoples and their physical work.”
—Jean Baudrillard (b. 1929)