Answer Posted / rajiv jani

Master data comprises data about basic objects used in business transactions in SAP CRM and stored on a long-term basis, such as data on accounts, products, installed bases, or warranties.

Why do we need it?
If we have to remember and search for data every time while creating business transactions, it would be time consuming and inconvenient. So we create master data- analogy would be in your email box, you create folders and move your emails from inbox to these folders so that when needed, you can easily and quickly retrieve it. These folders are like your email box master data (not exactly representing the SAP crm master data concept but for understanding purpose it would work)

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