The purposes of market research — common mistakes

In your exam answers, always link the purpose of market research to a specific business decision. For example, instead of saying 'to understand customers', state 'to understand customer price sensitivity in order to set an effective pricing strategy for a new product launch'. This demonstrates deeper application.

No, it does not guarantee success. Market research significantly reduces risk and increases the probability of success, but it cannot eliminate it. Factors like an unforeseen competitor response, a sudden economic downturn, or poor implementation of the marketing plan can still lead to failure. Research provides information, not a guarantee.

This is a common misconception. While vital for new product development, market research is equally important for existing products. Businesses use it to monitor customer satisfaction, track brand health, identify needs for product updates (extension strategies), and assess the effectiveness of ongoing promotion to maintain market share.

No, that is only one aspect (primary research). A comprehensive market research plan also includes secondary research, which involves analysing existing data. This can include government statistics, trade journal reports, competitor websites, and a firm's own sales data. The purpose is to gain a holistic view of the entire market, not just direct customer opinions.