Hi, first of all if you have a consumer electronic product, never admit or mention that your product is not competitive at minimum with other electronics. Consumers are not stupid, even those who are willing to spend a significant amount of money will most likely not do it if is only aesthetics.

Always assume your consumer is smarter than you and try to over deliver.

Second, the price alone does not make it a luxury item. I will give you an example to illustrate how a luxury item comes to be:

Ferrari as well as Bentley are hand crafted cars with limited availability, their engines and raw materials might be better than the mass produced BMW and have a long history of market satisfaction - meaning they've been in business for many many years.

Consider Apple, their company started with the mission of delivering consumer grade, easy to use, modification free computers. They introduced heavy R&D into their machines and thus introduced fonts, paint, click and point mouse and much more. Over time their quality became reknown and through their continued innovation, their computers were priced at a higher range than others. But due to quality of both the hard ware and the technology consumers don't really mind paying their higher price margins. This market acceptance at a higher price helps make it a luxury because not everyone can afford it and there are entry level, problem solving laptops and computers you can buy if what you need is to simply have a computer.

Also, part of what makes their devices look and feel somewhat luxurious is the fact that they are heavy, they are made of typically single or coupled pieces of steel or some other alloy.
So with apple, you have dependable technology, heavy-steardy feel, high price acceptance, limited quanities for long periods of time after announcements, ongoing releases.
Apple's target market? Anyone who is willing to spend money to stand out, have a product that is limited, industrial art oriented consumers, graphic artists, music artists, any artist you can think of. Generation Y and Generation X who grew up with the brand. Music lovers and techies who enjoy the simplicity of technology and integrated functionality. App lovers (socially engaged mobile users)

Now consider Beats, purchased by Apple. Beats is touted as top of the line listening devices, however every professional grade testing proves that Beats is competitive with your average $29.99 headsets. Much more their headsets cost on average, including the packaging, only $16.99 - something Apple must have loved because the Beats sell for average $200 a piece. Apple has similar margins. However typical their sound might be, Beats was able to leverage the founder's industry & network to get free unpaid sponsorship from athletes and musicians, on top of that they promoted the customization of their sets which people saw and replicated. On top of this customization, as general consumer when you see your favorite athlete or singer or celebrity using Beats, you're going to wonder where and how much? This worked for Beats, because there are other "father-like" headphones like Bose's who are priced about the same. Beats found a hole in the headphone market and exploited it.

Another thing that Beats did (proven to work and not alone) is that they added random pieces of metal to the headphones bands to add weight to them. Because when we feel something heavy and steardy we often assume is high quality packed with high quality stuff... in Beats case, It was just metal to add weight.

Beats target market? Those who are looking for hip, colorful, attention grabbing, status touting headphones.

Finding a target market is key, since you didn't really provide any detail of your product Is hard to give you direct help, but I hope this helps you get sorted out and re approach your marketing strategy. Also consider that pricing is a key marketing effort. Not everyone knows how to properly price items, but what is most commonly done is take most direct competitor and add 15% on top. Assuming that less than the competitor's price already covers your costs and provides some profit.