How Many Ways Are There To Define A Product Market?

Product market analysis' provides us a fair and clear picture of the product structure of an industry. It provides wide information as what are the possible alternatives available in the industry. What are the major substitutes in the industry and what are the important brands that can satisfy the need.

'Product market analysis' provides a clear view as what is the primary demand in the industry. What people need basically and how they choose among different alternatives and among competing brand (selective demand)?

There are two ways of defining product market:
First is that to define market broadly, for example take any food product, and include all the possible alternatives available to satisfy the generic or primary need. If this market is defined broadly then it will include all those alternatives, that are used to enhanced the taste of food (whether sweet or sour taste), in this market. Such alternatives may include products of sweet taste and also the products of sour taste.

For example, if we take tomato ketchup and pickles, they would be alternatives to each other, because both are of different categories i.e. tomato ketchup is of sweep taste and pickle is of sour taste product class.


Second is to define market narrowly, i.e. to include only those products that are very similar to one another. For example, if we take tomato ketchup and jams, they would be substitute to each other, because both are of same category, i.e. sweet taste enhancing products. So if we consider only tomato ketchup as our product market, it will be a very narrowly defined market.