Consumer decision process – model of buyer behavior

book: essenials of marketing 16th edition

read chapter 5 or listen to the video on chapter 5: i start my lecture with the consumer decision model first.

think of a product that you purchased within the past 6 months

discuss these questions relative to the purchased product. your answers should align with how these stages are done based on the consumer decision model in text.

how did you recognize that you needed the product?

where or how you search for information on alternative products that would satisfy this need (product)?

what alternatives did the search process generate and what variables did you use to make the final decision to buy?

where did you buy the product and why?

were you satisfied after using or consuming the product? explain.

there are 5 categories of influences as outlined by your text: economic, psychological. social, culture and ethnicity, purchase situation. which one(s) do you think had the greatest effect on your purchasing decision? explain.

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?