> Does this mean my laptop does not include Microsoft Word
No. This means that your laptop *does* include Microsoft Word, but it hasn't been activated.
> and i need to purchase the software?
Firstly, go back to the people from whom you purchased the laptop and ask them to give you the activation code for the copy of Microsoft Word that is installed on it. If they won't do that, ask them why the laptop you bought from them came with an unlicensed copy of Microsoft Word.
If you get no joy from that avenue, and you want to continue to use Microsoft Word, then yes you will need to buy a legal copy and use the activation code that comes with that.