MRP Full Meaning
MRP full meaning, Maximum Retail Price, is the highest price that can be charged by the manufacturer for the product sold in India. It is the final maximum cost that the customer has to pay to purchase any product or service. MRP printed on the products is inclusive of all taxes.
Retailers can’t charge customers more than the MRP. However, some retailers may choose to sell the products for less than MRP to attract more customers to their stores. In some remote areas, tourist spots, and in situations where a product is difficult to own, customers are sometimes charged illegally over the MRP.
In April 2015, it was revealed that milk vendors in Mumbai were threatening a boycott after it was observed that they had been charged above MRP and the Maharashtra state government was threatening to interfere.
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What is the Full Form of MRP?
The full form of MRP is Maximum Retail Price.
How to Calculate MRP?
MRP's full name, Maximum Retail Price, may be defined as the final maximum cost paid by the consumers for any goods or services. A goods or services cannot be sold out more than MRP but less than its MRP. MRP is inclusive of all taxes and no further taxes can be added unless it is specified.
It is mandatory to print MRP on any product/service. MRP is calculated by adding Manufacturing Cost, Profit Margin, Manufacturing expense, C & F Margin/Franchise Margin, Retailer Margin, Stockist Margin, GST, etc. Actual manufacturing cost includes transportation cost, GST, Salary, Rent, Office handling charges, etc. MRP is almost the same in almost all industries and sectors. Few minor changes may be done according to industry and distribution channels.
MRP Formula - Manufacturing Cost + Packaging Cost + CNF Margin + Stockist Margin + Profit Margin + GST + Retailer Margin + Transportation Cost + Marketing / Advertising Expense + Other Expense, etc.
Who Decides MRP?
MRP long-form, Maximum Retail Price, of the product is imposed only by the manufacturer and the government does not play any role in deciding the price for the same. The maximum retail price of the product is determined by the manufacturer based on various factors such as cost of production, taxes, transportation cost, freight, advertisement cost, commission paid to the dealers, and profit margin for manufacturers, dealers, distributors, etc.
How Does it Work?
MRP full form, Maximum Retail Price (MRP), works by not permitting the vendors from overcharging the customers. It is the maximum price that a seller can quote his buyer, and anything imposed beyond that would be illegal. Customers are now fully aware of the importance of the price printed on a product, and they know that sellers cannot charge them anything beyond that, and they always ask the latter to quote a price below MRP. As MRP is inclusive of all taxes, hence, the customers will not have to bear the tax implications for the products individually.
MRP Advantages
No Overcharging: Nowadays, all manufacturers print a tax-inclusive price on almost all the products. Hence there is less number of companies raised by the customers on the issue of overcharging by the retailers.
Single Price: Due to the fixed MRP, the manufacturer produced a product with a fixed rate and is applicable throughout the country. It is considered as the legal rate within all the states, gram panchayats, and municipalities. MRP aims to create a uniform price all over the country.
Consumer Purchasing Power: MRP helps to create awareness about the purchasing power among the different consumers. Purchasing power risks the financial ability of the consumer to buy a product or rice. If the MRP of a product is not fixed, the purchasing power is not fixed till the product is purchased.
Safeguard Consumer Rights: MRP is important to protect the rights of consumers in remote or rural areas. In such cases, consumers do not have the option to visit the different stores in search of the right place.
MRP Disadvantages
High Transportation Cost: Retailers in remote areas have to bear a high transportation cost and they cannot pass such cost to the end consumers. As retailers cannot charge higher than MRP, they sometimes end up making losses. MRP is calculated after the calculation of average cost which is essential for the transportation of the products.
Old Stock: Sometimes, the manufacturer increases the price and sells the old stocks at new rates. When customers demand an explanation, the manufacturer says that the price has increased due to the change in duties or cost of the production.
MRP Consideration of Other States: Before fixing the MRP of a product, the manufacturer considers the highest price of the product which is imposed on the customers by any state in India. Although the tax rate may be low in your state, you might end up paying a higher price as the tax rate in other states may be high.
Inefficiency: MRP can create inefficiency in the market. It also creates unnecessary complexities to the product's overall supply chains. As MRP is decided by the manufacturers, they may quote a too high price, which eventually impacts a lot of retailers that are working on a small scale, and hence they can lose their customers' faith because of such things that are beyond control.
MRP Criticisms
The concept of MRP, long-form Maximum Retail Price has been criticized a lot in contradiction with the free market system as it is decided by the manufacturer what profits retailers will make. Apart from this, retailers can easily overcome the system by imposing services such as cooling charges on cold drinks, or by manufacturers placing the price at up to ten times more than the expected sale price. The MRP is also criticized in rural areas because if retailers cannot charge high prices to cover the transportation cost and distinction cost over those areas, they simply do not stock many items.
Also, it is mandatory to note that MRP is not necessary to print on non-packet commodities like services, essential commodities sold in loss, or even for the packaged food sold in theaters, tourist places, etc.
MRP Full Form in Medical
Following are the MRP full form in Medical:
MRP - Multidrug Resistance - Related Protein
MRP - Multidrug Resistance Protein
MRP - Motility Related Protein
MRP - Multiple Drug Resistance Related Protein
MRP - Multigenre Research Policy
MRP - Medical Review Policy
FAQs on MRP Full Form
1. What is MRP?
MRP full name, Maximum Retail Price is the highest price or the upper limit on the price of goods set by the manufacturer or distributor of a good or final point of sale purchase. A maximum retail price is quite similar to the price ceiling, in the sense that it places an upper limit on the price. However, price ceilings are compulsorily imposed by a government or regulatory authority whereas MRP refers to an upper limit on the price of goods that is agreed between the manufacturer and various retailers.
2. What is the MRP Full Form in English?
The MRP in full form in English is the Maximum Retail Price.
3. Is it Legal to Sell above MRP?
No, retailers cannot sell any product above the printed MRP as it is a rule that shopkeepers won't sell the product above the MRP fixed by the manufacturer. Though, a shopkeeper can sell a product lower than that of MRP or also known as discounted price to attract customers but cannot sell above it under normal circumstances.
4. Is Both Marked Price and MRP the Same?
Marked price is a price at which a product is available to a retailer by the manufacturer of a product. Hence, it is the lowest price at which retailers prefer to sell the product. On other hand, MRP is the maximum price at which the products can be sold to the customers and it is inclusive of all taxes.
5. Is GST Imposed above MRP?
MRP is inclusive of all taxes including GST. It should be noted that retailers cannot charge over and above the MRP as GST is already included in the MRP printed on the product.
