Life-cycle assessment (LCA) is often employed to quantify the environmental impact of a product in a comprehensive manner. The aspects of performance and usability as well as that of eco-friendliness should be considered in an integrated manner for the market competitiveness of an eco-friendly product. The present study developed a product improvement plan for an eco-friendly electric heater by benchmarking two small-size electric heaters (companies 'H' and 'T') in terms of performance, usability, and eco-friendliness. The performance measurements such as temperature, humidity, wind speed, noise, and power consumption were collected while the two heaters were operated in a laboratory setting. Then, the usability evaluations such as aesthetics, operation satisfaction, performance satisfaction, and overall satisfaction were surveyed for the two heaters using a 5-point scale (1 for very unsatisfied and 5 for very satisfied). Lastly, the LCA analysis was conducted by following the six-step process of eco-friendly product design provided by KEITI. The analysis results of the two products being integrated with the aspects of product, service, and user, four design improvement directions such as eco-efficient, smart, modularized, and user-support were recommended for an eco-friendly electric heater. These proposed concepts would be useful to develop an eco-friendly electric heater design with a high level of market competitiveness.