What Are MOP and SRP?

In the retail industry, especially in India, there are familiar terms called MOP and SRP. MOP is the acronym of Market Operating Price, a term used as a guideline for a retailer on deciding the lowest retail price of a brand’s products in the market. Meanwhile, SRP stands for Suggested Retail Price, standardized prices of products recommended by the brand itself as a guideline for retailers from different locations.

MOP and SRP both are decided by the brand/company in a consideration that the price will impact the brand itself. Often times, if products have a lower price, they will bring a positive impact on the brand image, especially if the brand can maintain high quality at the same time.

If brands set their retail selling prices based on MOP and SRP, it directly suggests retailers follow it through. In other words, they should not sell below a particular set price. Setting MOP and SRP also aims at keeping the hygiene of playing field for all channel players across the industry.

Who Decides MOP and SRP?

There is another term in the retail price guideline, MRP—Maximum Retail Price. It’s the maximum price of a certain product that already includes taxes. Unlike MOP and SRP which are set by the brand itself, MRP is set by Government Regulations to prevent overpriced products and market stability.

As MOP and SRP are decided by the brand, they regularly conduct assessments which are called Price Check, MOP Audits, and SRP Audits. Based on these assessments then a brand decides on their MOP and SRP. 

Price Check or MOP/SRP Audits basically have two main purposes, including:

• Measuring pricing of its own products to create rules that drive pricing disciplines among retailers who sell their products
• Measuring pricing of competitors to create its own pricing strategies and best offers to customers

Why MOP and SRP Important?

Every brand has its own MOP and SRP. They have their Price Check and MOP/SRP Audits who work hard to assess and measure pricing, considering many aspects before coming up with the right MOP and SRP. They conduct research on pricing in the market and competitors. So, why are MOP and SRP so important?

MOP and SRP become crucial as it enforces pricing discipline in the channel. It’s the guideline for retailers that sell the same products in different locations so that consumers will not leave confused and dissatisfied. Moreover, they also avoid price-hunting shopping behavior among customers which can badly affect the brand itself. When MOP and SRP are already decided as rules, retailers who sell the brand’s products are required to follow them. If there is a violation, customers can inform or report the retailer to the brand’s authorities for evaluation.