2.1 The Purpose of Market Research

• Market research is the actions of a business to gather information about customers needs and wants.
• Factor 1: Understand the market and reduce the risk.

  • By understanding the market and our customers needs and wants, which reduces the risks of us making potentially inaccurate and costly decisions, reducing the likelihood of bankruptcy.
• Factor 2: To promote the organisation

  • By undertaking market research on how a business organisation advertises and markets its products, the business will be able to gain vital information on what attracts customers.
• Factor 3: To aid decision-making

  • It can help a business inform decisions of what the product can look like to increase the likely success as the business management can analyse the data.
• Factor 4: To obtain customer views

  • By understanding customer needs and wants, managers can make informed decisions. Market research allows our customers to discuss their views, needs and wants in terms of products and services, this will maximise sales and profit.
• Factor 5: To inform product development and promote their business

  • Analysed market research ensures that products are up-to-date and meet the needs of customers, this can lead to an increase in sales and profit.