Page 611 - Business Principles and Management

Unit 6

FIGURE 22-4 Steps in the Consumer Decision-Making Process

PROBLEM RECOGNITION
The consumer identifies a need to satisfy or a problem to solve.

INFORMATION SEARCH
The consumer gathers information about alternative solutions for the need or problem.

ALTERNATIVE EVALUATION
The consumer weighs the options to determine which will best satisfy the need or solve
the problem.

PURCHASE
If the consumer identifies a suitable and affordable choice, he or she makes the purchase.

POST-PURCHASE EVALUATION
The consumer uses the product or service and evaluates how well it met the need or
solved the problem.

CHECKPOINT

List the three different methods of promoting a product.

Advertising

Advertising is any form of paid promotion that delivers a message to many people
at the same time. Because the message is designed to appeal to many people, it is
rather impersonal. However, because the message reaches thousands of people,
the cost of communicating with each person is very low.
Organizations spend more money each year in the United States on advertis-
ing than on any other type of promotion. The average business spends less than
2 percent of total sales annually on advertising, but some businesses spend over
20 percent. Companies in industries such as beverages, cosmetics, and electron-
ics rely heavily on advertising and spend a significant amount throughout the
&
facts year to keep their brand names in front of consumers.

figures ADVERTISING PURPOSES AND MEDIA CHOICES
Advertising is a powerful tool because it can help a business accomplish a variety
of objectives. Companies must consider carefully what they want to communicate
In 2005, the U.S. corporation to consumers and plan specific advertising to accomplish that communication
that spent the most dollars goal. The major purposes of advertising are shown in Figure 22-5.
on advertising was Procter & Most businesses use some form of advertising to attract prospective customers.
Gamble, which spent over However, the methods of reaching consumers—the advertising media—vary a
$3.2 billion. great deal. Advertising media are the methods of delivering the promotional

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