Researching your target market is vital. Who are *you* wanting to sell to? The answer to this question will point you to your pricing structure.
With our business (BBQ Sauce & Cajun Pickles) we decided upfront we did not want to market our product to those who want BBQ Sauce for $1.50/jar. We wanted to market our sauce (and other products) as a premium product. Something worth paying a premium price. So we tested the market at small trade shows and found the "market" had no issue paying our asking price. Sure, we had a few who'd make comments like "I can go get a bottle of Kraft for $1.50/bottle." We would kindly tell them then that's what they needed to do. We aren't targeting that market. Those who are looking for cheap prices first then quality.
So after we established our target market we were off and running!!!