What is the purpose in awarding punitive damages?

Where as compensatory damages are intended to recompense the injured party for their losses, punitive damages are meant to punish those who they are applied against.

Further, punitive damages are also known as exemplary damages. Aside from its intent to punish the defendant for his willful of malicious misconduct, this is also awarded to make an example of the defendant's wrong actions so as to discourage other persons or companies from committing the same offense.