Neuromarketing

1
Neuromarketing-

• an introduction

Neuromarketing- an introduction
2
Introduction

• I know that half the money I spend on
  advertising is wasted, I just do not know which
  half.
• John Wannamaker (1876)

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In search for understanding consumer behaviour

• Marketing and environmental stimuli enter
  the consumers consciousness and/or
  subconsciousness. A set of psychological
  processes combine with certain consumer
  characteristics to result in decision processes
  and purchase decisions.
• The marketers task is to understand what
  happens in the customers consciousness and/or
  unconsciousness between the arrival of the
  outside marketing stimuli and the ultimate
  purchase decision.
• Kotler and Keller (2006, p.184)

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The emergence of neuromarketing

• Neuromarketing
• Neuroscience

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Defining neuromarketing
By studying activity in the brain,
neuromarketing combines the techniques of
neuroscience and clinical psychology to develop
insights into how we respond to products, brands,
and advertisement. From this, marketers hope to
understand the subtle nuances that distinguish a
dud pitch from a successful campaign. Mucha
(2005, p. 36)

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The scientific background (1)

• fMRI - functional Magnetic Resonance Imaging
• developed in the early 90s
• apparatus allows the precise
• tracing of areas activated in the
• brain responding to stimuli
• 3D-Encode activated regions appear
• in multiple colour
• originally applied to detect the location
• of illnesses, e.g. headaches, paralysis
• and seizures in the human brain

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The scientific background (2)

• QEEG quantified electroencephalography
• (an alternative to fMRI)
• established that aspects of
  cognition and emotional responses to
  commercial messages below the level
  of conscious awareness, can be successfully
  monitored in real time and analysed with
  sufficient depth and accuracy to provide an
  invaluable window on their consumers inner
  decision making process.
• Lewis (2005/2006, p.5)

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Neuromarketing- researching consumer behaviour
(1)

• neuromarketing is based on neuro-scientific
  consumer research and the assumption that the
  majority of consumer behaviour is made
  subconsciously
• what motivates consumers to purchase a certain
  product?
• self-esteem
• emotions
• consumption experience
• goal-directed behaviour
• external influences
• it starts, where traditional consumer research
  techniques end
• in the consumers brain

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Neuromarketing- linking science and marketing

• overconsumption and compulsive shopping can be
  traced back to a dysfunction of the orbitofrontal
  cortex (ORF)
• Leake (2006)
• impulsive buying decisions are based on the
  emotional state of the buyer (governed by the
  limbic system), rational buying decisions are
  processed in the frontal cortex
• Mucha (2005)
• memory retention is processed in the amygdale and
  ventro-medial lobes (VFML)
• Ambler, Ionnides and Rose (2000)
• irrational buying and selling is associated with
  the autonomic nervous system
• Peterson (2005)

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Neuromarketing-its potential impact on promotion
campaigns
Sponsoring -celebrities -events

• Posters/billboards
• location
• duration

TV/ radio adverts -channels/stations -time slots
Web adverts -duration -contents
Freebies/ promotion extras -location -product
choice
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Neuromarketing-its potential impact on
advertisement designs
Poster/billboards
Radio promotion
sports person
size
music
balance information/entertainment
colour arrangement
slogan/message
voice
length
TV advertisement
colour arrangement
balance information/entertainment
image
length
voice/music
product focus
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Neuromarketing-its potential impact on product
development

• flavour
• smell
• colour
• health/fashion trends
• identifiying new target groups

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Neuromarketing-its potential impact on product
packaging/design

• logo
• colour scheme
• packaging materials
• packaging size
• limited editions
• smell

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Neuromarketing-its potential impact on
distribution

• shelving
• product grouping
• special offers
• smell
• music
• general atmosphere
• availability

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Neuromarketing- between hype and reality (1)

• Technological limitations
• 7 of patients/test subjects worldwide are not
  suitable for brain scans
• noise and density of apparatus might prevent some
  test subjects from taking part in experiments
• falsified results due to apprehensiveness
• apparatus is large and inflexible (artificial
  environment)
• tests require medical supervision
• due to time and money constraints, only a small
  number of test subjects can be scanned
• General limitations
• accurate measurements of brain activities are
  limited Michel (2004/2005)
• certain emotions cannot be clearly
  differentiated Kurfer (2006)
• analysis of collected data still remains an
  enigma Reynolds (2006), Ahlert
  (2005)
• neuromarketing without future
  Walter, Adler, Ciaramidaro and Erk (2005)
• Consumer behaviour cannot be recreated in
  laboratory
• Time costs prevent the testing of a great
  number of individuals
• Brain activities cannot be measured against the
  will of test subjects
• Ethical issues should not be solely reduced to
  neuromarketing

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Neuromarketing- between hype and reality (2)

• marketing executives are hoping to
  use neuroscience to design better
  selling techniques. fMRI is being exploited by
  savvy consulting companies intent on finding the
  buy button in the brain, and is on the verge of
  creating advertising campaigns that we will be
  unable to resist.
• Editorial of nature neuroscience (2004, p. 683)

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Neuromarketing- between hype and reality (3)

• it appears to be less transforming the existing
  fundamentals of the marketing discipline, as it
  is rather a neuro-scientific consumer research
  technique, with the potential to add
  significantly to marketers current understanding
  of consumer behaviour
• it introduces the subconscious perspective with
  the potential to reform and extend quantitative
  research
• it might be the first technique, which allows the
  inclusion of the environment into quantitative
  research
• a response error of test subject is non-existent

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Neuromarketing- ethical concerns

• We can sell these people refrigerators. They
  may not have room for them, and they will put
  them on the front porch. They will buy a big
  automobile and all the luxuries, but they never
  move up the scale.
• Chicago ad executive, cited from V. Packard
  (1981, p. 99)

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Neuromarketing- ethical concerns

• Consumer rights rest upon the assumption that
  consumer dignity should be respected, and that
  producers have a duty to treat consumers as ends
  in themselves, and not only as means to the end
  of the producer. Thus, consumer rights are
  inalienable entitlements to fair treatment when
  entering into exchanges with other parties.
• Crane and Matten (2004, p. 268)
• e.g. consumers right to privacy, fair pricing
  and free thought and choice
• doadvertising techniquesinvolve a violation
  of human autonomy and a manipulation and control
  of consumer behaviour, or do they simply provide
  an efficient and cost effective means of giving
  the consumer information on the basis of which he
  or she makes a free choice. Is advertisement
  information, or creation of desire?
• Arrington (1982)
• human beings do not have a so called free will,
  as the brain reacts to stimuli split seconds
  before the human being recognises them
  consciously
• an escape from ethical responsibility in
  general?
• Traindl (2005)