Identify your most direct competitors and record the prices they charge.

Plot those prices on paper to establish a “price range.” Now, given your costs and the established price range, where could you price your offerings along that range? Record your price on the range. Set this aside. Now, take a copy of the competitive price range (without your product/service on it) and go talk to some customers. Present to them the exact nature of the value you will be offering them and ask them to pinpoint where on the price range your offerings should be. Now, compare where the customers say your price should be located on the range with the one you established knowing only your costs and the competitors’ prices. Is there a difference? If the customer located your price higher on the range than you did, that is probably the price you should use. If they located your price lower on the range, ask them why they did so. Perhaps you might need to rethink your proposed customer value proposition.