Market Operating (MOP) and Suggested Retail Price (SRP)

What is Market Operating Price?

MOP is the actual price at which a product is made available to a retailer. It is the lowest price at which a retailer can sell a product and is set by the brand or the manufacturers.

MOP is usually set at a minimum discount to the Maximum Retail Price (MRP) and is fixed by the demand and supply of a product. MOP can be lower or the same as the MRP.

People in India are well known by the term MRP, which is used to denote the maximum price that a retailer can charge for a product that includes all the taxes.

MRP is set by a brand for each of its products and is driven by Government Regulations. 

SRP of a product is a price at which the manufacturer recommends that the retailer sell the product. The main aim of SRP is to standardized prices to different locations. Some stores sell the product at or below the SRP. Other stores do so at the time of sales.

MOP/SRP is not driven by Government Regulations. They are driven by the brand by considering the impact that price has on the brand.

By lowering the price of a brand, it has both advantage and disadvantage. For example – By lowering the price, it has a positive impact on its sales volume. On the other hand, it has adverse impact on Brand image and channel hygiene.

By considering all these impacts, the Brands set guidelines and rules for the retail selling price, essentially telling retailers not to sell a product below a particular price. Setting such benchmarks, the brand ensures minimum variability of price.

To check whether the set guidelines are followed, brands conduct regular assessments which are called Price Check Audits.