Even though law requires retailers to sell at MRP but the actual price we consumer pay vary across India. MRP is a benchmark against which we can judge whether we've been charged excessively or reasonably. Take the example of Himalayas if you go for treaking to Kedarnath they'll charge from 20 to 100 for a water bottle depending on the heights. Similarly if you go to Bihar generally shopkeeper will charge rs 5 extra for a cold drink bottles. And those with the means deals Directly with manufacturers to inflate the MRP on the bottles, like airport or on expressway (Agra-Lucknow).
I agree, Dheeraj. Although MRP is supposed to be an upper ceiling and consumers can take any instance of overcharging to the consumer courts, it does continue to happen. Also, even though the government banned the dual-MRP system in 2017, a packaged drinking water manufacturer could very well make tweaks to the packaging or even the product and sell it at an inflated MRP. There seem to be instance of that hapening,
Something dynamic with MRP ? as manufactures know where the product is getting delivered so based on that they can make it dynamic for local and for regional profit ?
That could make life tough for a manufacturer since they deal with an entire value chain and can't be expected to deal with price-variations in a country as large and diverse as ours. So a dynamic pricing would eventually be the MSRP model where that leads to retailers setting prices based on competition and other factors.
Yes you are right, but at places like Himalayan region or high altitude or remote locations, we don't bother about the MRP as we don't have any choice so anyways its on them only, but I agree with your point.
As buyers are conditioned to compare prices at MRP, of late, MRP has been used as a trick for making discounts attractive, especially in digital sales. MRP = 100, discount = 20, sale price = 80 sounds better than MRP = 90, discount = 10, sale price = 80. So, separate SKUs are being pushed with "inflated" MRPs to "show" higher discounts and push sales.
How MRP has been calculated must be declared. Take example of drugs, today upto 20 % discount is offered. Even the same molecule is sold under different name at different prices. Poor customer has to take it or leave it.
My understanding is MRP in fact could be, and sometime is, different for different regions. In such cases manufacturer sometimes prints on pack - to be sold in this or that region only.
The Tell Me Why on MRP charged me up to introspect why nobody (newspapers/magazines etc) ever told us about such important and relevant topics.These lines totally resonated with me:
—Or put another way, someone living in an easy to access location sort of subsidizes the price paid by someone in a remote region
—We see the MRP and believe automatically that’s what we must pay. Even though we have no clue how the manufacturer has set the MRP. Whether it’s fair or whether it’s inflated just because they can do it without anyone asking questions.
Earlier,we had similar schemes in Quota Regimes like Steel/Coal prices etc which are now off.Tell Me Why has created an environment to analyse this in depth …because many manufacturers might make less supplies where their logistics costs are higher and people have to get from other places…
There's not much you can do with the MRP. Customers will never understand the million 'middlemen' a manufacturer goes through to reach the customer. And a manufacturer has to include the inevitable margins/commissions post considering productions/profits/taxes etc, that they are charged to display products PAN India.
One proposal that seems to be doing the rounds though is for manufacturers to explicitly provide information on their input costs, margins etc. Say through a QR code printed on the package. This way, consumers get a clearer picture of how inflated an MRP is. Although, even this can be gamed.
To add to Darshan's response too, sometimes retailers will choose to offer discounts in order to sell more product even if it comes at a lower margin for themselves.
It is possible that the retailer or wholesaler have bought goods at discounted price during the scheme period from the manufacturer, and now they have extra margin on the product. Hence they could actually sell it lower than the MRP.
Even though law requires retailers to sell at MRP but the actual price we consumer pay vary across India. MRP is a benchmark against which we can judge whether we've been charged excessively or reasonably. Take the example of Himalayas if you go for treaking to Kedarnath they'll charge from 20 to 100 for a water bottle depending on the heights. Similarly if you go to Bihar generally shopkeeper will charge rs 5 extra for a cold drink bottles. And those with the means deals Directly with manufacturers to inflate the MRP on the bottles, like airport or on expressway (Agra-Lucknow).
I agree, Dheeraj. Although MRP is supposed to be an upper ceiling and consumers can take any instance of overcharging to the consumer courts, it does continue to happen. Also, even though the government banned the dual-MRP system in 2017, a packaged drinking water manufacturer could very well make tweaks to the packaging or even the product and sell it at an inflated MRP. There seem to be instance of that hapening,
Something dynamic with MRP ? as manufactures know where the product is getting delivered so based on that they can make it dynamic for local and for regional profit ?
That could make life tough for a manufacturer since they deal with an entire value chain and can't be expected to deal with price-variations in a country as large and diverse as ours. So a dynamic pricing would eventually be the MSRP model where that leads to retailers setting prices based on competition and other factors.
Yes you are right, but at places like Himalayan region or high altitude or remote locations, we don't bother about the MRP as we don't have any choice so anyways its on them only, but I agree with your point.
As buyers are conditioned to compare prices at MRP, of late, MRP has been used as a trick for making discounts attractive, especially in digital sales. MRP = 100, discount = 20, sale price = 80 sounds better than MRP = 90, discount = 10, sale price = 80. So, separate SKUs are being pushed with "inflated" MRPs to "show" higher discounts and push sales.
https://substack.com/@anantchaudhary/note/c-148381756?r=qtq2s
How MRP has been calculated must be declared. Take example of drugs, today upto 20 % discount is offered. Even the same molecule is sold under different name at different prices. Poor customer has to take it or leave it.
IKEA, Decathlon and H&M information is unique. Appreciate
My understanding is MRP in fact could be, and sometime is, different for different regions. In such cases manufacturer sometimes prints on pack - to be sold in this or that region only.
The Tell Me Why on MRP charged me up to introspect why nobody (newspapers/magazines etc) ever told us about such important and relevant topics.These lines totally resonated with me:
—Or put another way, someone living in an easy to access location sort of subsidizes the price paid by someone in a remote region
—We see the MRP and believe automatically that’s what we must pay. Even though we have no clue how the manufacturer has set the MRP. Whether it’s fair or whether it’s inflated just because they can do it without anyone asking questions.
Earlier,we had similar schemes in Quota Regimes like Steel/Coal prices etc which are now off.Tell Me Why has created an environment to analyse this in depth …because many manufacturers might make less supplies where their logistics costs are higher and people have to get from other places…
Thank you for sharing your feedback, Sheo. :) We hope to continue writing such explainers in Tell Me Why.
There's not much you can do with the MRP. Customers will never understand the million 'middlemen' a manufacturer goes through to reach the customer. And a manufacturer has to include the inevitable margins/commissions post considering productions/profits/taxes etc, that they are charged to display products PAN India.
One proposal that seems to be doing the rounds though is for manufacturers to explicitly provide information on their input costs, margins etc. Say through a QR code printed on the package. This way, consumers get a clearer picture of how inflated an MRP is. Although, even this can be gamed.
Sometimes, or many times, I find they sell their goods at a lower price than the MRP. Sometimes I find much lower than MRP, how is it possible?
To add to Darshan's response too, sometimes retailers will choose to offer discounts in order to sell more product even if it comes at a lower margin for themselves.
It is possible that the retailer or wholesaler have bought goods at discounted price during the scheme period from the manufacturer, and now they have extra margin on the product. Hence they could actually sell it lower than the MRP.