How to set the price – Prices are not set according to competitors, unless you want to be a reactive follower.
Prices are not set based on costs, unless you want to lose sales due to a wrong cost allocation (costs sink with growing sales volumes). In fact, you incur costs only to produce value products that you can sell for a profitable price.
Prices are not set according to customer wants, unless you want to give away value.
Prices are set according to the value your brand delivers, and they are set in a reverse manner: you first find a profitable price, and then you determine the costs you can incur. This is what Lee Iacocca did when he created the Ford Mustang.