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Neuromarketing



Kirjoittanut: Lucas Pääkkönen Alvim - tiimistä SYNTRE.

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Neuromarketing 

Written by: Lucas Alvim, Irene Lai and Tuuli-Emily Liivat

 

Introduction 

 

The decision to buy a product is usually not related only to the product itself. In fact, consumer choices are not completely rational: people do not think only based on the usefulness, the price, the benefit of the product of what they buy. Behind that decision to purchase a particular product there is so much more that we do not even think about. Taking some examples: how many football teams decided to use Nike shoes because the name refers to the Victory goodness? Or how many people bought specifically Apple products because the little bitten fruit is cute on laptops? Products are never just products and most of our consumption is determined by internal and external factors we do not think consciously about. Commercials are one of these influences, but they are not the only one. Recent neurology studies show that we are far less rational, less disciplined when it comes to shopping. According to some studies, 75% to 90% of the choices we make in a store are determined by impulse, emotions, and habits. Only a small percentage of our purchases are determined by a conscious decision. Among the five senses, two play a fundamental role: sight and touch. In communication, each color can be associated with an emotion, such as red with energy or blue with tranquility. Touch also plays a key role and characteristics like the texture, the weight and other tactile sensations affect how people perceive and interpret an object. More than gaining a better understanding of the human cognitive system – how we work in certain situations and why -, certain discoveries can (and are already being utilized) to forecast and influence consumer choices inside of businesses. The goal of this essay is so to analyze these phenomena, to better understand them, to make us more aware customers and more proficient entrepreneurs.  

 

 

Neuromarketing  

 

Neuromarketing is a discipline born in 2002 from the studies of Professor Ale Smidts, Marketing Research expert at the School of Management in Rotterdam. Contrary to what many of us would like to believe, between 75 and 90% of all people’s decisions are driven by an irrational choice. The hypothesis that our minds function on two parallel levels—one more unconscious, rapid, and instinctual, responsible for most of our judgements because of its speed—has been supported by several scientists. The goal of neuromarketing is to better understand the emotional factors that influence many of our decisions. Over the decade, neuromarketing has branched out in numerous ways and developed new understandings. In his scientific article, Weng (2018) concludes various schools of thought on neuromarketing as neuroscientific concepts, theories, methods and tools to study the brain and neural activity in response to marketing stimuli. As a result, the findings of investigations are then used to formulate, combine and advance existing marketing theories, which in turn develop marketing strategies of companies and brand to appeal to senses of consumers and affect consumer behaviour.  

 

The tale of two chickens 

 

One of the most fascinating studies that has demonstrated the value of this element was carried out in May 2018 by marketing professor Raj Raghunathan and PhD candidate Szu-Chi Huang at the University of McCombs in Texas. They separated the sample of students engaged into two groups and asked them to select which of the two chickens they preferred using two photographs of hens: one was a cute, fluffy chicken and the other was a sickly-appearing, skinny one. To help them select, extra information was provided: the emaciated chicken was stated to be less tasty but healthier than the nice-looking chicken, and the other group was told the exact opposite. Both groups chose the plump chicken, but for quite distinct reasons: the first group valued health more than flavor, and the second group rated taste more than health. In conclusion, the “ugly” chick triggered a considerably stronger visual and emotional conditioning than the cognitive conditioning, which, on the other hand, did not come into play until much later to support the decision. Neither group appeared to support their decision with an opinion of the chicken’s appearance. They felt obligated to provide non-emotional justifications for their emotional decisions, to the point where the two groups came up with totally opposite arguments for the identical choice. According to Raghunathan, this phenomenon has actually been labeled “post-hoc” and confirms the importance of impressions, especially on those who believe they are resistant to them. As Ragunathan   said “This is called posthoc rationalization and it is found in every aspect of our life, whenever we make decisions. We are ruled by our emotions first, and then we build justifications for our response. You can see this happening in hiring decisions, dating, you name it.” 

 

Pepsi VS Coca-Cola 

 

In 2003 the Neuroscientist Read Montague raised a question: Subjects were invited to taste two unidentified drinks, one was Pepsi, the other Coca-Cola, from two anonymous cups and to express their preference. Before the volunteers were given the packaging for the two drinks, the scales clearly favored Pepsi. As they have been shown the can, another part of the brain, the one associated with reasonable judgment, was activated at the sight of the packaging, and the 75% of them leaned in Coca-Cola’s favor at this point. The brand’s ideals communicated through the packaging (and other marketing initiatives) had persuaded the participants that the Coca-Cola was superior, notwithstanding what they personally thought based just on taste.
If most people prefer Pepsi, why are its sales not dominating the market? 

 

Factors that influence buying decisions 

 

With last-minute deals that play directly on the anxiety of not being able to get what you want in time, emotional marketing typically takes use of basic emotions that are shared by most people, including dread. Since the senses are what arouse emotions, they are the methods by which even marketing must operate to influence the consumer. According to Martin Lindstrom, a top specialist in neuromarketing from Denmark, creating a multisensory proposal—one that includes, for instance, scent and hearing—is the only way to capture a user’s attention and ensure that they will pay attention to the product. There are, as mentioned before, several factors that influence the way a customer decides to buy a product instead of another one.
These choices-factors are: 

 

  • Packaging 

It influences our purchasing choices much more than we imagine and sometimes people choose the package before the product. What makes a package different from the others and what characteristics make it unique? How to make the most of these dynamics to create more effective packaging? Behavioral sciences applied to marketing deal with this, using techniques such as eye-tracking and brain imaging to study consumer decisions. Just think of the difference between holding a glass bottle of cologne with a sophisticated design in your hands, compared to a plastic package. The feeling that the use of a product evokes is in many cases sufficient to trigger the desire to buy it. 

 

  • The importance of color 

Color is a big part of marketing. When you think about a brand that you love, the first thing that comes to your mind probably will be a feeling of trust, excitement, or serenity, and those felling are heavily influenced by the brand’s color or the color of their advertisement or packaging. Different colors transmit different feelings and thoughts without you even noticing. Red transmits celebration, purity, passion, strength, energy, excitement, heat, arrogance, leadership, danger, anger, and power. Blue transmits tranquility, trust, wealth, wisdom, truthfulness, and creativity. Green transmits growth, rebirth, nature, youth, good luck, health, stability, and creative intelligence. Yellow transmits sunlight, joy, optimism, intelligence, hope, dishonesty, weakness, greed, sociability, and friendship. White transmits youth, sterility, truth, cleanliness, fearfulness, and humility. Black transmits absence, rebellion, modernity, power, elegance, mystery, style, evil, darkness, seriousness, unity, sorrow, professionalism, and sleekness. Gray transmits elegance, respect, reverence, wisdom, old-age, boredom, decay, balance, and neutrality. Orange transmits energy, heat, playfulness, arrogance, warning, danger, desire, royalty and religious ceremonies and rituals. Brown transmits calmness, depth, nature, tradition. Heaviness, poverty, roughness, simplicity, dependability, and friendliness. Pink transmits gratitude, appreciation, sympathy, love, joy, innocence, childlike behavior and symbolizes sweet taste. Purple transmits nobility, spirituality, mystery, wisdom, flamboyance, exaggeration and pride (Mohebby, “The art of packaging: An investigation into the role of color in packaging, marketing, and branding”, “International journal of organizational leadership”). An example of a brand using a color to transmit a feeling is Coca-Cola, they use red which makes you feel excited and energized. 

 

  • Product placement 

In-store product placement plays a big role in retail sales. As previously mentioned in this essay consumers make most of their brand decision in the store, nowadays consumers are no longer brand loyal, so the importance of product placement is growing. An experiment conducted In Reykjavik proved that a potato chip target brand´s relative sales against its product category were higher when they were placed on the middle shelf compared to the high or low self. One explanation for these results could be that the response effort associated with looking at middle shelves is lower than that associated with looking at the high or low shelves (Foxall, xall, Saevarsson, Sigurdsoon, 2009, “Brand placement and consumer choice: an in-store experiment”, Journal of applied behavior analysis), smaller the response effort, more probabily the product is going to be noticed and consequently bought. If you notice in retail stores, the essential products are at the back, forcing you to walk throw all the other non-essential products. Impulse products are next to the register queues, so that while you are waiting you get the urge to buy it, like for example gum. Complimentary items are next to each other to boost each other’s sales. 

 

  • Marketing campaigns 

Marketing campaigns can affect the way you see and feel about a product without you even noticing it. An effective way of neuromarketing is to create an emotional connection between the customer and the product. A great example of a brand creating an emotional connection is Coca-Cola tying itself to Christmas throw decades of marketing campaigns, consistency often pays off. Christmas is a time of happiness and joy, and Coca-Cola by being tied to Christmas is “selling that feeling” (happiness). Another way that companies try to guide consumers’ behavior is throw loss aversion, “losses loom larger than gains” (Kahneman & Tversky, 1979), Loss aversion is a characteristic of consumers that consists of the consumer’s fear of losing being bigger than the allure to win, and that’s why the usage of words as “limited offer”, “valid till” and “till the end of stock” often boost sales.  

 

  • Music 

Auditory stimulus is among the greatest and most used aspects of conventional marketing due to its phenomenal properties of affecting our cognitive behavior. A comparative study by Jain et al published in 2015 shows that when compared visual stimuli to auditory stimuli, people tend to have a shorter reaction time to the latter proposed option. This may also offer an explanation to why evolved, strong brands focus on audio branding as a way of creating a connection to the consumer faster than they would with solely visual stimulus. Audio branding can also serve as a faster way of creating associative schemas in consumer’s cognitive behavior due to the possibility of creating more unique combinations. As an example, when asked of companies with the color combination red and white, a consumer may mention popular brands such as Hesburger, Coca-Cola or YouTube while the theme song to a 21st Century Fox may be recognized more easily, turning the brand into a widely applicable and memorable platform.  When focusing on consumer behavior through the prism of music stimuli, one should first outline where consumers may get into contact with music in the first place. In their studies, Sung et al (2016) and North et al (2005) conducted that purchase intentions have generated differences due to different music styles. As an example, classical music increased the customers’ purchases in a restaurant when compared to no music or background pop music. What could be theorized from the findings is that when consumers are looking for an experience of having their need of food and socialization met, the classical music genre contributes to the feeling of calm and relaxation, which in turn provides the consumer with a feeling of safety and allows the person to enjoy themselves more through the purchasing of additional products. Sung et al’s study in 2016 confirms the theory and progresses it further. The findings of the study suggest that in comparison to other art forms, music has an extensive neuropsychological representation as it does not require absolute linguistic coding and has direct access to affectivity, limbic areas that control our impulses, emotions, and motivations (Sung et al., 2016; Tierney and Kraus, 2013).  

 

  • Price 

Psychological pricing is a major aspect of neuromarketing and refers to a strategy directly impacting the consumer’s subconscious mind to be more inclined to buying a product. When speaking of pricing strategies, the most common strategies are prestige pricing, artificial time constraint strategy and charm pricing. 

Prestige pricing strategy is frequently used by luxury or well known brands. At its core, the strategy is to price the product higher than it is with the marketing leaning heavily on the product’s exclusive qualities of brand coverage and limited availability. The effect of higher pricing convinces consumers to believe that the price is higher due to the higher quality of the product and they thus become more inclined to buy the product.  

Artificial time constraints refer to the marketing strategy where a price is set for a campaign with a strict time limit to influence the decision-making of a consumer. While these have been commonly created for physical retail shops, the emergence and interactiveness of social media platforms and newsletters enable the artificial time constraints to be tighter. With an offer oftentimes lasting for 24 hours or less, the consumer is more likely to buy the product or service. An excellent example of the strategy are Black Friday and Cyber Monday, which are marketing campaigns intended to sell excess stock and are known for the causation of erratic consumer behavior.  

Charm pricing refers to a strategy where the consumer is presented with a lower price set directly below the whole number, which influences the consumer to believe that the product costs less than it is in reality. The strategy is particularly useful when buying more expensive products or services such as technological products.
 

Conclusion 

 

It is easy to understand why all of this becomes crucial to marketers and how is absolutely essential that brand image advertising and marketing efforts are strong, especially in the beginning stages of an initial campaign. Since it is harder for customers to change their minds once they have chosen a particular choice, it is best to establish an emotional connection as soon as possible. Neuromarketing is an essential part of every company’s marketing plan and it has being gaining more importance. The neuromarketing market was valued at 66.05 million USD in 2019 and it is projected to reach 152.22 million USD by 2027 (“2021, Global neuromarketing market size “Geographic scope and forecast). The use of neuromarketing adds a scientific edge to the competition and presents the brand strategists and company owners with facts that work on an unconscious level, thus having a greater effect on consumer behaviour and should be researched more to learn of how we develop to stay on par with the evolving consumer and product differentiation.  

 

 

 

  

References 

 

  • Gueguen N., “Psicologia del consumatore”, 2010, Il Mulino ed. 
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