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Thule's Tripp Wyc - Outdoor Indu


									                        Q&A: Thule’s Tripp Wyckoff Discusses Their MAP Policy

                                As published in the OIA CEO Brief 4/7/09

Thule North America’s MAP policy, first implemented in 2002, has been praised by some retailers as
“headed in the right direction.” The OIA CEO Brief interviewed Tripp Wyckoff, VP of sales, service and
marketing for Thule, to get a sense of what’s new in Thule’s 2009 Map Policy and how the company
enforces it.

Q: What’s new in your 2009 policy?
A: We have always offered our dealers two programs, or paths – EDLP (Every Day Low Price) and MSRP
(Manufacturer Suggested Retail Price). Under EDLP, dealers can advertise Thule for 10% off on a day-in,
day-out basis. Under MSRP, retailers can not advertise Thule for less than full Suggested Retail Price on
a day in, day out basis but they may advertise Thule for as much as 20% off for up to two weeks, as
many as three times per year. Under both programs, retailers can participate in company sponsored
sale events.

We used to create these MAP prices using a straight calculation of either 10 or 20% off of the MSRP.
What we ran into is if your MSRP for an item is $34.95, that discount comes up with a crazy price point
like $31.46. We no longer call it 10% or 20% off and have rounded all MAP prices to the nearest 95
cents so retailers don’t have to work with awkward price points. Our dealers are competing, and with
consumers using shopping search engines like Froogle, if you are even 1 cent more expensive you are
at a disadvantage.

Q: What advice would you give to brands devising their first MAP policy?
A: You really can't consult with retail customers in writing your policy. It has to be unilateral and it has to
be something that comes from you to them or you face risk of collusion. It’s not an agreement at all. It’s
a policy customers must abide by to be a Thule retailer. The business environment is changing
constantly, and anyone who thinks their MAP policy is going to be valid for more than six months or a
year is wrong. When you write this policy you think you’ve thought of everything, but with rapid
technology and software development it is easier to find policy loopholes that weren’t possible a short
time ago.

Q: Are you using a third-party Web monitoring firm?
A: We use NetEnforcers. It costs about $1,500 to $2,000 a month. They check our updated MAP price
lists daily against their database of websites. We have an administrative person who regularly checks
Net Enforcers’ violation reports. We pay a monthly fee plus a la carte charges for what they do on back
end. Companies used to do this in house and it was next to impossible to keep track of it. This way we
get more consistency and can apply the policy more uniformly.

Q: What are you penalties for violations?
A: Dealers who violate Thule’s MAP policy for the first time receive a written warning and must correct
pricing within three business days. Buy-Now partners (retail partners given prime links on Thule’s
website) in violation of MAP will have their link removed from the Thule website for seven days. Upon a
second violation, Thule will stop shipping to the retailer until the violation is corrected and Buy-Now
partners will have their link removed from the Thule website for 30 days. Thule will close the retailer’s
account upon a third violation.

4909 Pearl East Circle, Suite 200 | Boulder, Colorado 80301| 303.444.3353 |
Q: Have you had many violations by brick-and-mortar stores?
A: We have had very few occasions of having to enforce MAP with a brick-and mortar-store. It’s really
all about online. Every once in a while we will get a tear sheet from a newspaper, but it's really
unbelievable how little we see of that, whereas NetEnforcers is picking stuff up every week. Nine times
out of ten it was someone who is not doing it intentionally, but by mistake. Typically there are a lot in
first few weeks of January when the new price list comes out.

Q: How have your retailers reacted?
A: More often than not you get gratitude from dealers for enforcing this policy and it usually never gets
past the first violation. They often thank us for catching a mistake and for Thule delivering premium
products that they can sell for a premium price. Our customers are important to us and this policy is
one of the ways that we can remain important to them.

4909 Pearl East Circle, Suite 200 | Boulder, Colorado 80301| 303.444.3353 |

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