Lesson 1.2.2a

1.2.2a Purpose of market research Quiz: Pearson Edexcel Business, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

In partnership with Revision Ninja

Lesson 1.2.2a, Purpose of market research: 20 multiple choice questions for the Pearson Edexcel GCSE Business (1BS0), Unit 2: Spotting a business opportunity, written with Revision Ninja.

Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.

Host this setFree Play

The 20 questions

  1. Which of these is a purpose of market research?

    • To ensure that competitors are never able to enter the same market again
    • To identify and understand customer needs before launching a product
    • To set the business's tax bill at the lowest level allowed by the government
    • To avoid all contact with customers so that the product stays a secret

  2. How does market research help a business to reduce risk?

    • By providing evidence about demand before large sums are spent
    • By guaranteeing that every product launched will certainly make a profit
    • By ensuring that the business never has to change its products in future
    • By removing all the costs of production from the business's accounts

  3. Which of these is an example of market research helping a business to identify a gap in the market?

    • Finding that every shop in the area sells vegan cakes at the same price
    • Finding that no local shop sells vegan cakes and deciding to fill that gap
    • Finding that the local cake market is shrinking as customers switch to bread
    • Finding that customers are happy with the current range of cakes on sale

  4. A firm uses market research to decide whether to open a second branch. What is this an example of?

    • Using information to inform a business decision
    • Using the owner's personal preferences alone to decide where the firm trades
    • Using a government order to decide where its branches must be located
    • Using a guess about customers to decide where its shops should open

  5. Which of these best explains why a firm might carry out market research before launching a new product?

    • To reduce the risk of launching a product that customers do not want
    • To avoid any need to advertise the product once it has been launched
    • To ensure the product can be made without using any raw materials at all
    • To make sure the product is cheaper than any rival product on the market

  6. Which of these is NOT a purpose of market research?

    • Providing information to help the business make decisions
    • Identifying gaps in the market that a new product could fill
    • Reducing the risk of launching a product that customers reject
    • Setting the business's wage bill for the year ahead with government approval

  7. A café asks customers which new snacks they would like to see on the menu. Which purpose of market research does this show?

    • To identify and understand customer needs
    • To reduce the cost of the café's kitchen equipment and fittings each year
    • To ensure that the café's rivals never open a second branch nearby
    • To identify the tax rules that apply to food businesses in the local area

  8. A business uses research to decide not to launch a product because demand looks weak. Which purpose has been served?

    • Understanding customer needs better so that the price can be raised
    • Reducing risk by avoiding an unsuccessful launch
    • Identifying a gap in the market that no one else has noticed yet
    • Informing the business about its competitors' future plans for expansion

  9. Which of these shows a business using market research to inform a decision about price?

    • Testing a price with a survey of customers before setting the final price
    • Setting a price at random and then never reviewing it in later months
    • Copying a rival's price without checking whether customers would accept it
    • Choosing the highest price possible regardless of what customers would pay

  10. Why might a business that skips market research face a higher risk when it launches a product?

    • It will be required by law to withdraw the product after the first month on sale
    • It may have no evidence that customers want the product or will pay for it
    • It will always face lower costs when it launches without first checking the market
    • It will automatically have fewer competitors because it did not research the market

  11. Which of these is the best example of market research informing a business decision?

    • A firm chooses a new logo because the owner personally likes its colour scheme
    • A firm reads survey results showing strong demand and decides to expand production
    • A firm keeps its existing product unchanged because it has always sold well
    • A firm sets its prices by copying a rival's prices without checking demand

  12. A business wants to know whether there is a gap for a new type of service in its town. What should it do first?

    • Carry out research into what local customers are currently offered and want
    • Hire extra staff before checking whether there is any demand for the service
    • Open the service immediately and see whether customers come to it
    • Ask the council to decide the service's price before any research is done

  13. Which of these is the most likely outcome of good market research?

    • The business is guaranteed to win every customer from its rivals immediately
    • The business makes better-informed decisions about products and prices
    • The business no longer needs to think about its customers in future years
    • The business avoids all costs associated with launching new products ever

  14. Why is market research useful when a business is considering a major investment?

    • It shows that the investment will never face any competition at all
    • It means the investment will certainly be profitable in the first year
    • It gives evidence to support or challenge the expected return on the investment
    • It removes the need to borrow money from banks for the investment at all

  15. A business wants to reduce the chance of a costly failure when launching a new drink. Which action is most useful?

    • Ignoring any feedback that suggests customers might not like the taste
    • Launching the drink across the whole country at the same time without testing
    • Testing samples with a group of potential customers before the launch
    • Spending the entire launch budget on advertising before any product is made

  16. Which of these is NOT a reason for a business to carry out market research?

    • Informing decisions about which products to launch and when
    • Setting the amount of tax the business must pay to the government each year
    • Identifying customer needs before designing a product
    • Finding gaps in the market where a new product could succeed

  17. A firm finds that a rival already sells the product it plans to launch, with strong sales. What does this information tell it?

    • The market has no demand at all, so the firm should drop the plan straight away
    • The market is guaranteed to be profitable for any firm that enters it
    • The market is too small to support any firm, not just the rival firm
    • The market already has demand, but competition will be significant

  18. Which of these is most likely to be the result of a business ignoring market research?

    • Reducing the costs of advertising through targeted campaigns each year
    • Identifying a gap in the market that no competitor has seen
    • Finding that customers are willing to pay a higher price for the product
    • Launching a product that fails because nobody wanted it

  19. A business uses research to choose between two possible locations for a shop. What purpose does this serve?

    • Informing a business decision
    • Avoiding any risk by refusing to open the shop at all
    • Setting the wages of the staff who will work in the shop
    • Identifying the tax rate that applies to shops in each location

  20. Which of these would show market research helping a business to reduce risk?

    • A business testing a product with a small group before a national launch
    • A business ignoring a survey that shows customers dislike the packaging
    • A business launching a product everywhere at once without any testing
    • A business raising its prices before knowing what customers would pay

All Pearson Edexcel Business quizzes