The purpose of market research
see p.67
What you need to know •
Identify and explain the purpose of carrying out market research.
Market research is the process of finding out about the market in which a business operates by collecting, presenting and analysing information and data. • To reduce risk •
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It allows the entrepreneur to know what is happening in the current market and identify any gaps within it. The entrepreneur can adapt their product to meet changing customer needs and wants.
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• •
It helps an entrepreneur to understand their target market and the customer profile within the target market. It helps them develop a product that suits the needs of their target market, and allows them to know how and where to promote the product.
R
To gain customers’ views and understand their needs and wants
Using market research data helps an entrepreneur to make good, informed decisions that are more likely to lead to a successful result.
FT
To understand the market
•
A
To aid decision making
It helps an entrepreneur to make an informed decision as starting a new business can be very risky. It also reduces the likelihood of making an incorrect decision.
•
It helps them understand what the target market thinks of the product and what might need changing to make it more desirable before spending money developing the product.
D
To inform product development
To understand how a good/service complements others on the market
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It allows an entrepreneur to know what others are doing and make informed decisions about features of the product, prices etc. to make their product more appealing and develop a unique selling point (USP).
Practise it!
Remember it!
1
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Market research is an ongoing process.
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It allows an entrepreneur to understand the needs and wants of their target market so that they can make a product that continues to meet those needs.
2
22
Explain one purpose of carrying out market research. (2 marks) Explain how market research can inform product development. (2 marks)
Revision Guide
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