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Consumer Behavior- Neuromarketing NMIMS

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Vidushe Mitra

on 26 August 2014

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Transcript of Consumer Behavior- Neuromarketing NMIMS


Department of Health and Human Services-Privacy Rule- excludes marketing
New technologies in neuroscience-could lead to invasion of private thoughts
Neuro-imaging is used for one reason only-to enhance sales
the extent to which researchers should be able to study consumers is questioned-how far is ethical and where is the line??
companies are trying to find the 'buy button' in the consumers mind (what triggers them to buy)
It is the consumers right to privacy and therefore their personal rights are being vialated when neuromarketing is being carried out on them without them being aware
Consumer Privacy
Exploitation of Specific groups
Vulnerable individuals-Eg. Children, People with psychological/neurological disorders, research subjects who are unaware of neuromarketing effects are exploited through neuromarketing

Free will and awareness is limited-autonomy is at risk as a result
The question is how far will companies go to gain more information?
Commercial Alert(2003) believes that neuromarketing could take away the right to free will from children.
Stealth Neuromarketing
Examination of decision making process
Right to Autonomy may be violated using brain neuroscientific technologies
Fear of Stealth Neuromarketing in future-if critical effectiveness is reached
Manipulation of mind of consumer-consumer cannot detect this manipulation
'Buy button'
"
“brain imaging will be used in ways that infringe personal privacy to a totally unacceptable degree” (Editorial, 2004b).
In the present economic climate it in important to make logical purchasing decisions
nostalgic value
Shopping makes us happy
Gives a rush of good feeling dopamine
Controlling more positive stimuli
Positive Effects
Positve Effects : Consumers


Understanding how consumers buy to feel good
Area in the frontal cortex activated
Self perception
Social emotion and
Social status
Self esteem
Positive Effects: Services
What is Neuromarketing?
We usually recognize our likes and dislikes subconsciously.
Our brains are so complex that we are unable to decode all the information we see.
As 95% of thinking happens subconsciously neuromarketing helps companies understand why consumers are making these subconconsicous decisions .
It looks at the affective and cognitive responses that consumers have to marketing stimuli using three main research technologies, FMRI, EEG & SST.
Neuromarketing is a useful tool that helps us to gain a deeper understanding of consumers behaviour. Why do consumers prefer Coca-Cola over Pepsi? Why do women prefer romantic comedies over science-fiction movies? Why do young people prefer Facebook over Google+ and other social media?
Neuromarketing was first developed in the USA in the early 1990's. Neuromarketing is a new branch of marketing based on neuroscience techniques to understand the processes of consumer’s behaviour.
“Neuromarketing is where science and marketing meet.”
It studies how people's brains respond to advertising through monitoring brainwave activity, eye-tracking and other mapping techniques.
Neuroscience has shown us that the brain is an organ that establishes preferences upon the consumers relationship with the brand and not on the message of the advertisement.
I.E every time we come in contact with a brand we gather a perception of it that can be either positive or negative and this will reflect in our attitude towards that specific brand.
We don’t just buy products for their functional uses, we buy them in order to outwardly express who we are, so in a way a product can define us.
Our brain will take all the elements of a product into account in order to identify the product to the individual.
Emsense Neuromarketing Firm
Research tool understands what motivates shoppers
Allows organizations to gather cognitive and emotional reactions to current and proposed packaging designs
Underlying factors that drive poor performance
Making it easier for consumers to decipher messages
Used in conjunction with other tools (good 1)
Examples of positive effect
What they measure
Chips Ahoy packaging was changed after cognitive and emotional responses were gathered.
neuroscience research revealed several opportunities for enhancement.
Developing service personalities
satisfaction
Conscious and subconscious thought process
Neuroscience removes the methodological barrier
Develop effective price strategies
Matching capacity with demand
Short term response
Brains response in the limerick system which governs emotion
Pepsico put neuromarketing to the test with their potato crisps Frito Lay. Results found that Frito Lay should abandon their previous shiny packaging and opt for a new beige packaging that displayed pictures of healthy ingredients. Neuromarketing showed that this type of packaging stimulated less brain activity related to the feelings of guilt, and therefore appealed to a more health conscious consumer.
Different people have different views to what is right and wrong and it is therefore very hard to distinguish what is ethical and what is not.It is not a legal issue and is based purely on opinions.
What Is Ethical??
There are a number of ways that companies can increase the value they extract from their consumers through improving their advertising, products, services and marketing strategies. Christophe Morin a marketing specialist identified 6 key aspects that help convince consumers to make the right decisions.
We are self-centred: People are completely selfish, everyone wants something in their life that will bring them more pleasure.
We desire contrast: For example, every day we are bombarded with thousands of advertisements, only ones that are truly eye catching will actually get our attention
We are lazy: Advertising needs to be kept simple but strong with powerful visuals. Too many words take’s up too much of people’s time.
We enjoy stories: People have a tendency of paying closer attention to the beginning and the end of anything. This is why it is crucially important that companies marketing and advertising strategies are strong at the beginning and end in order to get attention.
We are visual: People tend to make decisions on a visual basis, we see something we like, we want to buy it immediately, only afterwards do we rationalise our decision. Eye catching visuals make a much greater impact on a company’s sales than price and reasoning.
Emotions drive us: Put simply we don’t remember an experience if there isn’t some form of emotion attached to it. It is important that companies tap into consumers emotions through their advertising in order to become memorable, create a purchase and a loyal customer.
Positive Insights
Ethical Neuromarketing
Research subjects must be protected-they must fully understand and be aware of the research being carried out on them
Research subjects must consent to research being conducted
Private thoughts should not be invaded
Murphy et al(2008) suggests ways in which the neuromarketing researchers can follow a 'code of ethics'
Neuroscience uncovers the power of emotions
How emotions impact complex behaviour.
Offer and insight into the brain
Operations on functional and structure level
Emotional responses are more powerful then cognitive ones
Depth of processing can influence the formation of memories
Many aspects of processing occur automatically
First Neuromarketing agency
Belief that the secret to achieving more sales is delivering to the real decision maker
providing neurocreative service
Scientific principles of the SalesBrain NeuroMap model
Managing all aspects of the business websites, image, sales presentation, marketing communications


Positive Effects: Advertising Images
use of one noninvasive neuroimaging technology, functional magnetic
resonance imaging (fMRI), has experienced especially rapid growth.
Enables researchers to isolate systems of neurons associated with
functions of the brain.
looks at a print advertisement,
light activates some of the 125 million visual neural receptors,
rods and cones, in each eye.

Nerve signals travel to the midbrain, which
focuses the pupils and coordinates eye movement over the advertisement
Neuromarketing Persuasion Model
Has 3 phases Screening, Intervention, Outcomes
Different screening process to traditional model
Neuroimaging techniques to consumer behaviour paradigm
Observing marketing stimuli
Intervention phase- brain scan data of test group or individual
Stimulus is processed by consumers though cognitive mechanism
Form attitudes of brand/product
Triggering affective area of the brain
Create positive attitudes/ intentions to buy
Intervention/ Outcome
Greater Targeted Images
Popular
Controversey surrounding the use of nueromarketing as a reliable marketing technique.

As it is believed neuromarketing allows for an unprecedented insight into consumer behaviour it has been critisised as a technique and been compared to brainwashing.

Not recognised as a marketing tool across the scale as it is not used by all companies.
No benefit to consumer purely for marketer financial gain.
Negative reactions..
The problem with Neuromarketing
The main issue is that it is still untested. There is no way for the consumer to validate the claims made my the company as to how effective nueromarketing is.
Hard to measure its effectiveness.
Has come under critisism by watchdog groups.
Still in the academic stages - there is little peer viewed literature on nueromarketing.
Can be seen as expensive
risky (as it is untested) and there are no guarantees it'll be helpful to the company.
its too expensive to replace traditional media assessments such as focus groups.
Why companies don't use it?
Neuromarketing could be the next revolution into understanding consumer behaviour but it can also have negative effects.
consumer watchdog group Commercial Alert requested a federal investigation in 2004 which gave the use of neuromarketing bad publicity.
There is a fear that nueromarketing will be used to target the youth which could ultimately lead to increase in obesity, anarexia, disease etc.
Most people became aware of neuromarketing through online rather than actual studies making the results seem unreliable and open to bias.
The manipulation of data undertaken by the researcher leaves an open for bias.
As the value ($) of neuromarketing is undertermined companies still rely on traditional marketing techniques.
Negative effects of neuromarketing
Neuromarketing has the ability of tapping into consumers emotions to understand what drives them to buy certain goods.
where as other forms of traditional research, such as focus groups do not have the same ability as people are influenced by their surroundings and society and tend to say what they think people want to hear.
Some professionals belief that neuromarketing is the future and brain imaging will enable marketers to target consumers more successfully.

While subjects are viewing advertising and promotional campaigns they are wired up to imaging devices.
Decisions can then be made about the subjects subconscious brain patterns based on which areas of the brain are triggered by the images and light up.
The campaigns will have the aim of triggering certain emotions which can be linked to a certain part of the brain. If after exposure to the advertisement there is no reaction in the correct area of the brain then the campaign has failed its objective.
It is useful to help advertisers change certain aspects of an advertisement before it is launched.
Brain Scanning
Neuroscientists have found that using celebrity endorsements in advertisements has the power to trigger dopamine hormones in the brain, tapping into the positive emotions connected with trust brought by faces we recognise. However choosing who to endorse your brand is very important, as once a face becomes associated with something negative, we tend to want to avoid coming into contact with that negative image
Celebrity Endorsements
Recent surveys have shown that even satisfied customers occasionally leave a company or brand, the reason for this is that our brains get used to certain stimuli and only react to something new and attention grabbing.
This is why marketing experts are now aiming to not simplysatisfy customers, but delight them. Customers have to remain engaged.
Customer statisfaction
consumer advocacy groups have been pushing for a closer investigation of the effects of neuromarketing on public health and political manipulation also
However, Grerard Zultzman believes that neuromarketing is ethical stating : 'Ethics reside in users, not in methods'
Professor of medical ethics, Jonathan Moreno believes that 'the old fashioned focus group is as good as an MRI'
Neuroscience/neuromarketing techniques
Salesbrain: The worlds first neuromarketing agency
Feeling hypnotised after watching this?
Bibliography

Neuromarketing examples
Adds more credibility eg Nielsen and Neurosense
2 main techniques used: - Functional MRI (FMRI)
- Electroencephalogram(EEG)

FMRI - this technique involves the voluntary individual in an MRI Scanner. The process of this involves the individual being presented with specifiic visual and audio stimuli (eg advertisements) and images of the brain are taken regularly in order to identify which parts of the brain react to the stimuli. It does this my measuring the blood flow and the blood oxygenating in the brain.

- This technique is extremely expensive and time consuming meaning that large multinationals can afford this but for smaller companies its more difficult. It also means that it is only really feasible to use for researching small groups.

EEG - this neuromarketing technique involves the subject wearing a padded cap on their head and measures electrical activity underneath the subjects scalp.

-This technique is more mobile than FMRI and is also cheaper but is seen to be less insightful than FMRI. Hyundai are an example of a company who used this technique.
Hyundai are an example of a company who recently used EEG in order to gain insights into their consumers minds.

Hyundai conducted this research in order to see how conusmers react to a new car they are planning. During this research the sample of 30 consumers( 15 men, 15 women) wore an EEG cap for an hour and were asked to look at specific parts of the car in order for Hyundai to gain insights into how theur brains reacted to different parts of the car.
Before Yahoo launched a 60-second tv advertisement which would be both ran online and on prime cable tv. It conducted research by getting consumers to wear EEG caps and watch the ad in order to see how they reacted to the stimuli
FMRI - Today, it is said to cost around 40000 for 20 research subjects
EEG - An analysis of 30 consumers would cost 50000
Neuromarketing research techniques are still costly now days but have become far more affordable than a few years ago due to the lack of availability of the devices needed.

Some people may also argue that the costs for this form of research are justified due to the efficiency of the information gained from it.
COSTS INVOLVED
Microsoft are another company which has engaged in EEG. Microsofts research objective was to demonstrate how engaged xbox gamers were. The did this by the research subjects being shown stimuli(advertisements) while wearing EEG caps on the xbox. This allowed them to analyze and identify which parts of the brain were being engaged when shown these ads.
What is Neuromarketing?
Tools & Techniques
Positive effects
Ethics

Conclusion
NEUROMARKETING


Neuromarketing strategies can be used to improve brand images it allows a clear understanding into consumers
buying behaviour patterns and the decision process

The main ethical concern with neuromarketing is the loss of consumer free will and autonomy
For a company using neuroscience to remain ethical they must ensure the consumer is fully aware and able to understand the research and the extent to which it is being carried out.
Neuromarketing research tools and techniques are still very costly even thought the it has become more highly available to marketers and also become cheaper.
In order for neuromarketing to become legitimized, some form of behavioural model needs to be constructed that links brain activity with external behaviours which can foresee different types of consumption related problems
There would also need to be some method which can measure the role of each type of brain has in making a final decision. Only then could a model be designed which identifies what marketing stimuli suit a certain brain structure to achieve its objective task.
The main issue is that it is untested. If there was solid evidence through studies and literature of the impact neuromarketing can have more companies would use it as a marketing technique.
A better understanding of neuromarketing would ease the mind of the consumer. Negative remarks such as referring to neuromarketing as "brainwashing" have a negative impact on neuromarketing as a valid marketing technique.
Unilever used EEG neuromarketing to test one of their advertisements. The responses were weaker than what had been expected, although the aspects of the ad that were designed to induce negative emotions where much stronger than expected. This allowed the creative teams to create something more meaningful in their ad’s.




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