Paper 1 · Market Research
The main reason a new enterprise carries out market research before launching a product is to
Afind out what customers need before committing money
Bset the rate of value added tax charged on the product
Crecruit the staff who will work on the production line
Dobtain a licence allowing it to trade in the local area
Explanation: Market research replaces guesswork with evidence about who the customers are, what they want and what they will pay. Finding that out before the money is spent is what lowers the risk of producing something nobody buys. Tax rates and trading licences are set by government, not discovered by research.
Derived from ZIMSEC Business Enterprise Skills Paper 1, Specimen Paper (edition A), Q5