NEURO-MARKETING

BY: FREDERICA KOHLLEPPEL, VALMA TIKKAKOSKI, HARPER OZBIRIM, NIKOLETTA KOSMA AND LOUISE DANDANELLTUTORIAL PRESENTATION, 28 FEBRUARY, 2013

AGENDA

• Introduction - History – Purpose• Techniques – Usage• Case Study• Critiques• Conclusion• Future Perspectives

WHAT IS NEUROMARKETING?• New innovative form of market research• The practice of using technology to measure

brain activity in consumer subjects.• More effective than traditional market researchWhy?• Removes subjectivity and ambiguity• Common metrics:

• Respondent attention level • emotional engagement • memory storage

HISTORY

Firstly introduced in June 2002 by:An Atlanta advertising firm: BrightHouseFor the creation of a business division using fMRI for marketing research

On the basis of neuroscience researchOne manifestation of neurocultureThe premise:

consumer buying decisions are made in split seconds in the subconscious, emotional part of the brain

Thus:What we like, don't like, want, fear, are bored by, etc. is indicated by our brain's reactions to brand stimuli

PURPOSE

• To better meet "unmet" market needs, connect and drive "the buy".

• To inform the development of products and communications - really to inform the brand's 4Ps

• To guide marketers to just the right product designs, packaging and ad messages to boost sales.

METHODS IN NEUROMARKETING• EEG’s (Electroencephalography)

and fMRI (Functional Magnetic Resonance Imaging)

• WTP – Willingness To Pay• Expectation and experience measurement• Hedonic rating scales• Brain-mapping in the

buying process

SO WHAT ARE THESE METHODS MONITORING ? • Basic – it monitors our emotions!

• We feel more than we think

• The “New Brain” (neo-cortex) VS: The “Old Brain” (reptilian brain)

• Therefore: what we really react on are exposed• This can be used to create messages and

products that speaks to the subconscious part of our brain that control the way we act

TECHNIQUES IN RELATION TO MARKETING• Market Research and Product Development• Facial expression tracking• Eyetracking

• Especially in online media

WHO USES NEUROMARKETING?• Brain Scientists • Neurologists • Hollywood• Advertising agencies• R&D departments in P&G, Unilever, Coca Cola etc.• Facebook• Google• And many more….

COCA-COLA VS. PEPSI CASE STUDY

WHAT & WHY• For humans, behavioral preferences for food and beverages

are affected by a great number of sensory stimuli, hedonic states, expectations, semantic priming, and social context.

• Additionally, cultural influences also affect eating and drinking habits

• In this experiment, Coke and Pepsi were delivered to humans while using functional magnetic resonance imaging (fMRI).

• Two conditions were examined: (1) anonymous delivery of Coke and Pepsi and (2) brand-cued delivery of Coke and Pepsi AKA brain response to both drinks

• Reasons for choosing Coke and Pepsi as stimuli• Hypothesis of study

THE VIDEOhttp://www.youtube.com/watch?v=kmMWJ4z8ssA

PROS AND CONS

NEUROMARKETING - PROS• Reaching unconscious mind

• 90% of purchasing decisions (Lindstorm)

• Sex sells?

• Health warnings – reverse effect

NEUROMARKETING - PROS• Convincing sales presentations + compelling commercials

+

NEUROMARKETING - PROSMore reliable than traditional MR techniques

• “Neurons don’t lie”

• Environment

• Formulation of answers

vs.

NEUROMARKETING - PROS

• Lower prices

• A better world?

NEUROMARKETING - CONS

• Cost - $ 50K (Forbes) • return?

• ‘Brainwashing’ Marketers – bad image

NEUROMARKETING - CONS• Ethical concerns

CONCLUSION• Is a handy tool for marketers in the research process

• No matter which industry you are in you can incorporate neuromarketing

• Helps to examine cultural influences on brand perceptions

• Neuromarketing can be both good and bad

FUTURE PERSPECTIVES• It will become a given in future product development

(Ariely and Berns, 2010)

• The next “big thing” in marketing research(Ariely and Berns, 2010)

• Could possibly achieve a better cost/benefit trade-off

• Evidence is found that new MVPA measurement will reveal hidden information about consumer preferences

FUTURE PERSPECTIVES• It will become a given in future product development

(Ariely and Berns, 2010)

• The next “big thing” in marketing research(Ariely and Berns, 2010)

• Could possibly achieve a better cost/benefit trade-off

• Evidence is found that new MVPA measurement will reveal hidden information about consumer preferences

DISCUSSION

1. DO YOU THINK NEUROMARKETING IS MANIPULATIVE?

DISCUSSION

2. DO WE NEED FUTURE LEGISLATION ON THIS SUBJECT?