What factors should be considered when setting an initial price point for a product?

A business can use pricing strategies to improve its customer price perception by implementing strategies such as value-based pricing, psychological pricing, or promotional pricing. Value-based pricing involves setting prices based on the perceived value of a product or service to the customer rather than on the cost of the product or service. Psychological pricing involves setting prices that are more appealing to customers such as pricing an item at $9.99 instead of $10.00. Promotional pricing involves temporarily reducing prices to increase short-term sales and attract more customers.

Some common mistakes businesses make when setting their initial price point include: not considering the cost of production, not understanding the market and competition, pricing too high or too low, not considering the perceived value of the product by customers, and not revisiting the price point regularly to adjust for changes in the market or cost of production.

A business can balance between gaining market share and maximizing profit margin by implementing a strategic pricing strategy. This involves setting a price that is competitive enough to attract customers and gain market share, while also high enough to cover costs and generate a profit. The business should also focus on improving operational efficiency to reduce costs, and invest in marketing and product development to increase demand and sales volume. It's a delicate balance and requires careful planning and execution.