Determining product alternatives
The purpose of this step is to determine what products shall be included in the study.
The relevant market segment delimits the products that may potentially be involved in a product substitution. This is identified in the primary steps where customer segments and niche markets are investigated. In some cases, the product or the product alternatives to be included may be given in advance, in which case they contribute to the definition of the relevant product properties.
Whether all of the possible products on a market are included in a study, depends on the goal of the study. An enterprise internal study may be performed for a very specific purpose, which gives a large degree of freedom to define what is regarded as relevant alternatives. In relation to public applications, which are typically aimed at influencing a predetermined market, the study should relate to the products that are (expected to be) available on this market. For example:
- To determine ecolabelling criteria for a product, a study should include a representative selection of the product alternatives that can substitute each other in the relevant market segment. A more narrow selection would be perceived as unfair to the excluded alternatives and not reflecting the true potential for environmental improvement. A broader selection would be seen as suggesting irrelevant alternatives and thus also as an unfair comparison.
- An enterprise internal study of the same product may be limited to study different alternatives within the product range of the enterprise itself or that of its closest competition, without causing such problems. But as even enterprise internal studies should seek to reflect the actual consequences of the decision it is advisable to include all the expected product alternatives.