What is the purpose of market research?

The purpose of market research is fundamentally centered around gathering and analyzing information about a market. This process involves collecting data regarding consumer preferences, behaviors, trends, and the overall market environment. By understanding these aspects, businesses can make informed decisions regarding product development, marketing strategies, and positioning within the market.

Effective market research helps identify potential opportunities and threats in the marketplace, allowing companies to adapt and align their strategies to better meet consumer needs. It serves as a foundational element for various business operations, including new product launches, market segmentation, and targeting specific demographics effectively.

Considering the other options, evaluating competitors' market shares is just one component of market research rather than its primary purpose. Increasing product pricing can be a result of insights gained from market research but is not its main objective. Lastly, while advertising decisions can be informed by market research, focusing exclusively on advertising overlooks the broader scope of insights that market research provides regarding overall market dynamics and consumer behavior.