Monday, February 23, 2009

NEUROMARKETING

Neuromarketing is a decade old concept. It all gained importance in 2004 when a half-dozen scientists from the Baylor College of Medicine published a research paper on change in brand preference to cola brands by using a Siemens Allegra 3T functional Magnetic Resonance Imaging (fMRI) brain scanner. The study concluded that when exposed to Coke labels, soda drinkers who hadn't previously expressed much brand preference suddenly had affection for the Real Thing. The drinkers' noggins lit up like Christmas trees after they sipped the branded Coca-Cola. The results demonstrated that Pepsi should have half the market share, but in reality consumers are buying Coke for reasons related less to their taste preferences and more to their experience with the Coke brand. In other words, our brains confirm that the brand with the more effective marketing wins and can even fake out our taste buds. The field of neuromarketing is growing up. While large corporations employ neuromarketing firms to conduct costly fMRI studies, a new breed of marketing upstarts with neuromarketing expertise is promising smaller entrepreneurs the same kind of knowledge without the high costs of custom lab research.


But basically what exactly is neuromarketing? Well, it is the practice of using brain-wave product feedback to target goods and services to our subconscious appetites. Neuromarketing is the application of this huge amount of information that's available in the literature in terms of how people make decisions. Technically speaking a research study conducted explains the concept as : Consistent with neuroimaging evidence suggests that distinct circuits anticipates gain and loss, product preference activates the nucleus accumbens (NAcc), while excessive prices activates the insula and deactivates the mesial prefrontal cortex (MPFC) prior to the purchase decision. Activity from each of these regions independently predicted immediately subsequent purchases above and beyond self-report variables. These findings suggest that activation of distinct neural circuits related to anticipatory affect precedes and supports consumers’ purchasing decisions.


Christophe Morin in his book “ Neuromarketing: Understanding the Buy Buttons in Your Customer's Brain” , says entrepreneurs can improve their products, services, marketing and advertising by learning six keys to neuromarketing : We are self centered, we crave contrasts, we are naturally lazy, we like stories, we are visual and emotion trumps reason. In future, marketing analysts will use neuromarketing to analyze consumer’s preference in an effective way. Personally asking question would involve a cognitive bias. This knowledge will help marketers create products and services designed more effectively and marketing campaigns focused more on the brain's response. Consumers’ reaction to the color of the packaging, various attractive shapes, the sound the box makes when shaken, or the idea that they will have something their co-consumers do not would be understood by the marketers through neuromarketing.


The main idea is that the decision is made and influenced by the subconscious part of the brain and by generally asking people about their preferences may only give us partial information about the factors actually influencing their purchasing behaviors. Also there are some things which consumers avoid to say when asked about their buying decisions due to emotions attached or the pride factor.However, this study is still in nascent stage and has a long way to go. Also the relevance of the initial results is not very convincing. Some analysts also fear the manipulative use of neuromarketing on children and marketing of harmful products. Every technology has positive and negative aspects. However, proper use of neuromarketing will help the marketers in making better decisions in the future and while integrating technology to increase the profits for organizations.

Contributed by: Abhishek Muley

1 comment:

Ronnie said...

I was pleasantly surprised to see an article on Neuromarketing because it has been a topic of debate between medical science professional circles and business corporations for all these years.

Well done Abhishek for contributing this article!

Here's how I would term the basic concept in 1 line. Neuromarketing is a market research technique that uses brain imaging to assess marketing messages.

The concept was born at Harvard in the late 1990's when Gerry Zaltman (a marketing professor) began scanning people's brains for corporations.

From the corporation's standpoint, neuromarketing allows for more concrete data to be collected that is free from problems that plague other types of marketing research such as self-reporting biases.

As neuromarketing has grown in popularity (and publicity), certain corporations have become decidedly more secretive about their use of the technique. Some institutions who have participated in neuromarketing research have removed any mention of those studies from their websites.

There are definitely several ethical issues involved, as well as methodological issues (which I'm sure will decrease if the technique is more widely used.)

First, is it even ethical? While fMRI research is generally considered to be very safe, there are definitely more potential risks than, say, participating in a traditional focus group.

Does the end-product of neuromarketing research contribute enough to society to balance out the risks? Is using a medical technology appropriate for something that could lead to increased air pollution after we all buy SUV's?

And, in the case of neuromarketing research being done at academic institutions, is it ethical to use research funds and resources to pay for this type of research instead doing a study on schizophrenia?

One major problem in the field right now is that the early work is being done by people who are not experienced in both marketing and neuroscience.

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