Identify the choices: what values or types could an instance of the new data type be?
A simple example: "a letter-grade is any one of the symbols 'A, 'B, 'C, 'D, or 'F." The new data type is a special kind of symbol, with only the five specified values as possibilities.
Another example: "a place is either a posn or a number." Here posn and number are previously-defined types, and an instance of the new type place can be either one.