It is a normal competitive practice to benchmark competitor prices in most markets. If you are not monitoring competitor prices then you are missing a crucial and readily available source of competitor information that can give clues to a vast quantity of additional data. (Link price changes to company financials, to get trends in profitability; price changes also gives indications on how the company sees its products over time and thus overall marketing strategy.) This applies irrespective of whether you are a retailer, manufacturer or in a service industry. The only real difference is the accessibility of the price information.
In the retail sector obtaining price information is usually straightforward. You can go to a shop and ask or usually just see the price tag. As a consumer, there should be no problem shopping at a competitor’s outlets. However it is not ethical to nose around in “staff only” areas or store rooms, for example, or to damage stock, etc. Also, although the information is usually public, store staff may object and ask why you are making long lists of prices and stock holdings. If they do, you would need to say what you are doing – otherwise you would be misrepresenting yourself – so walking around with a note pad, or recording device could cause raise suspicions and cause you problems. Of course, this problem only arises when checking prices at a physical location. Checking prices on their e-commerce / Internet stores is much simpler.
In business-to-business environments collecting price information can be much more difficult. Many companies are secretive. Even worse, they may not even have a formal price list that will be made available outside the company. Prices offered will vary depending on a number of factors, including the quantity purchased (and so any resulting discounts) or other services offered. Unless you actually intend to purchase competitor products, do not claim to be a potential customer if contacting a competitor directly – as that could be viewed as misrepresentation and so unethical.
Nevertheless, in the majority of cases, pricing information IS in the public domain. It is in the customer’s interest to get the best deal. So, it is in the customer’s interest to know what prices the various suppliers in the industry are offering. As a result, a first point of contact can be your customers and your competitors’ customers.
Speak to your customers (or get your sales people to do this). Ask what the competitor has quoted. Contact lost customers and prospects and ask what they actually paid for the product. You can generally be quite open – saying your company name. To non-customers you can also say that you need the information so as to ensure that your products are competitive. It will usually be in their interest to give some information – as perhaps next order they will get a better deal. All this is ethical – as you are not misrepresenting yourself or asking for confidential information. (When asking for prices, do not attempt to gather information if it is covered by a confidentiality agreement signed between the competitor and your contact! Obtaining information from such contacts will mean they have breached their agreement and so puts both you and the contact at risk of getting sued!)
In some cases, especially for large scale projects, products are put out to tender. In such situations it is possible to find the value of bids put out by competitors from a variety of public sources. In Europe there is a database called Tenders Electronic Daily (often called TED) at http://www.ted.europa.eu/ that records the bids for all major governmental supply, service and public works contracts within the European Union. Information recorded includes pre-information notices, invitations to tender and contract awards. TED is particularly easy to use and now covers almost all Western European and most Eastern European countries – members of the European Union. Other databases tend to be more specialist – but do exist. A useful site for sources for USA government bid and tender information is held at http://www.fedmarket.com/. Finally, you should not ignore your own industry journals, which frequently record contracts won by companies and their value.