An MSRP is actually required by the government. If the new slang is another word for the same thing - it's just that - another wording. MSRP's we developed as a max allowable price that can be charged for a product. It doesn't matter if it's guitars or automobiles. It's intent is to prevent charging one person one price and another a wildly higher price.
Are you located in the United States? If so, I think you may misunderstand the history of our antitrust laws, price fixing, and how/why MSRP came about. MSRP is not required by law, nor was it invented to create a maximum allowable price. Quite the opposite, in fact, it was designed my manufacturers to create an appearance of a certain value, irrespective of actual retail sales price (or actual value, for that matter).
Vertical price restrictions (price limits mandated by manufacturers for retailers) have long been a controversial topic in US trade and antitrust law. Horizontal price fixing (collusion between retailers or manufacturers to fix prices at certain levels) has long been illegal. However, up until a few years ago, certain forms of vertical price restriction were also considered illegal under the Sherman Antitrust Act. Manufacturers created the MSRP as a way to "suggest", but not mandate, a retail product price that they would like to maintain in the marketplace. It's a price the manufacturer can advertise that leaves (often considerable) room above retailer/reseller cost for retailers/resellers to make a profit. In the case of Fender, their MSRP has long been
well above typical retail and online music shop profit margins--so far above as to have become an imaginary number, in fact (as we have seen).
So no, the government doesn't mandate any sort of MSRP. Manufacturers, however, including many of the ones we know and love, like Sony, Bose, Mesa, Yamaha and many others, still assert control over vertical pricing through the use of minimum and maximum RPMs (retail price maintenance). Most commonly, they use minimum RPM as a "whip" to keep retailers in line, "punishing" them if they *advertise* (but not necessarily sell) at prices below minimum RPM (effectively below MSRP) by dropping them (i.e. terminating their reseller agreement). Any of you who have tried to negotiate a better price on equipment from these manufacturers in a retail store knows what I mean.
So how meaningful is MSRP? It's not binding (hence the word "suggested"), and as illustrated by Fender's move, MSRP is only meaningful if retailers hew to it, and if the economics of the situation allow it to be meaningful. You and also someone else mentioned MSRP of cars vs. musical equipment. I think that's a useful illustration for the "meaningfulness" of MSRP. I would say that overall cost of production for a guitar and for most consumer electronics is significantly less (per unit) than the cost of production of a car. Cars are bigger, heaver, with larger and more complex parts, and require more people and larger, more expensive machinery to produce a smaller quantity of units. There are more factors that drive both supply and demand of cars, and therefore prices can fluctuate well below, and at times well above, the car manufacturer's MSRP. As someone who was once hot to buy an "inexpensive" Mazda Miata when they first came out, I can attest to this (it still hurts to think about the prices dealers were asking - wayyyy above MSRP!).
Guitars, amps, and most consumer electronics, on the other hand, don't tend to run into (as many of) these issues. They are small, cheap (comparatively), easy/quick to produce with far lower overhead overall. When's the last time you heard of a massive luthier's union strike slowing down guitar production, driving down supply and driving up demand? You don't. Typically any uptick in demand is temporary (people love a product and buy the initial quantities out immediately, or in the case of electronics, parts are temporarily in short supply). Therefore, in this case, MSRP is just a "magic number", and street price is the only price that matters.
I, for one, am glad to see Fender drop their massively inflated MSRP, simply because it saves me a trip from Fender's beautifully-designed web site to MF or GC's crappier website, and more clicks to find the "real" price (or the mental calculation of subtracting 25-33%, anyway).
