For what purpose this "<meta charset="utf-8" />" is used for?

Question

In web designing, what is the need for encoding of data? i didn't get it..

Answer 1

Encoding means to convert alphanumeric data to binary. Computer can only read binary. Again, packet data is transmitted using synchronous transmission, which consists of bits. So, this encoding is required for data transmission.
Also, data is stored in the form of bits. If your page contains 1024 characters, it will need 16384 bits of storage if Unicode is used. So, encoding also matters in page size and bandwidth.

Answer 2

That tells the browser that the webpage uses UTF-8 which provides many non-English characters including symbols and some alphanumerical characters such as Simplified Chinese.

Without specifying that the page uses UTF-8 it will be interpreted as ASCII by default which will turn UTF-8 data into a mix of symbols & numbers that will mean nothing to anyone unless they look up each of the entries. Of course that would also require them to know what they're looking at.