The role of market research

A business needs to find out how many people would want to buy the product it is planning to
offer for sale. If there is not a very big market for the product, a great deal of money could be
wasted developing a product that not many people will buy. It could even cause the business to
fail altogether. Therefore, it is very important that market research is carried out accurately.

The role of market research is to try to find out answers to these questions:

• Would customers be willing to buy my product?

• What price would they be prepared to pay?

• Where would they be most likely to buy my product?

• What feature of my product do customers most like or dislike?

• What type of customer would buy my product?

• What type of promotion would be effective with these types of customers?

• How strong is the competition and who are the main competing businesses?

By carrying out market research, a business can identify customer needs in a changing and
competitive international environment. This is essential if a business is to remain competitive in
the future.
 Product-orientated and market orientated businesses

Some businesses produce the product first and then try to find a market for it. This is known as
being product-orientated. This approach is not common today. Product-orientated businesses
often produce basic necessities required for living, such as agricultural tools or fresh foods.
These products may not have a brand name and are general products that consumers need to buy.
The producer and retailer are mainly concerned with the price and quality of the product.

Sometimes when new technologies are being developed, new products, such as the original iPad,
are launched on the market without first investigating possible demand for them. Consumers may

not buy these products until they have been fully tried and tested and until advertising has
persuaded them to purchase the products. Businesses whose markets are national or international
cannot usually afford to be product-orientated. It is risky to produce products and hope that they
will sell, without first carrying out market research to find out if consumers will want the
product. This approach of using market research is called being market-orientated. It requires
businesses to have a marketing budget. Each business has to identify the wants and desires of
customers, both now and in the future, in order to produce the right goods which will sell well
and make a good profit for the business. Market-orientated businesses are better able to survive
in the market and be successful because they are usually more adaptable to changes in customer
tastes. They are able to take advantage of new market opportunities which may arise. New
products are launched with more confidence when customer needs have been identified before
the product is introduced on to the market.