Analyze the role of market research before ABC expands this business.

• A. It is unnecessary.
• B. To set production lines.
• C. To design logos.
• D. Market research can help ABC estimate demand, identify customer preferences, and reduce the risk of overexpansion.

Answer: (D)

Market research before expanding focuses on understanding customer demand and preferences to judge whether there is a solid opportunity and how big it might be. By estimating how many units could sell, identifying what features or services customers care about, and uncovering price sensitivity, ABC can plan the scale and scope of any expansion in a realistic way. This information also helps decide where to expand, which product variations to offer, and how to price and promote new offerings. Most importantly, it reduces the risk of overexpansion by ensuring the level of investment matches actual market demand rather than optimistic guesses. While market research can inform decisions about production capacity or branding, its main value in expansion is guiding assessments of viability and how to align the business with what customers want.