Describe the reasons why a business conducts market research. - Leaving Cert Business - Question B - 2007
Question B
Describe the reasons why a business conducts market research.
Worked Solution & Example Answer:Describe the reasons why a business conducts market research. - Leaving Cert Business - Question B - 2007
Step 1
Size/Potential of Market
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Answer
A business needs to undertake research to find out the actual size of the target market and the potential to enter that market. This helps the business gauge whether the market is large enough to pursue.
Step 2
To identify if there is demand
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The business needs to test the market to see if people would be interested in the product. This feedback allows the business to make necessary adjustments to the product.
Step 3
To establish a price point
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Conducting market research helps the business to determine how much it will cost to produce and distribute the product and to estimate how much potential customers will be willing to pay.
Step 4
To identify competitors
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The business must gather information on competitors, including their strategies. This knowledge helps the business to understand the competitive landscape and develop strategies to compete effectively.
Step 5
Set targets for the business
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Through market research, businesses can set specific goals and targets they aim to achieve, which assists in planning and strategic decision-making.
Step 6
Access finance
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If the business intends to apply for funding, conducting market research is essential to demonstrate the viability of the business to financial institutions or government bodies.
Step 7
Identify more opportunities
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Engaging with potential customers during research may reveal unmet needs, enabling the business to develop new ideas or enhance existing products.
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