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Sept. 27

A Breakthrough on the Market – a Need for Neuromarketing

95% of purchasing decisions are made unconsciously and only 5% are thought through. As a result, neuromarketing methods for understanding consumer behaviour are being used extensively in marketing. Robert E. Morgan, Professor of Marketing Studies, BMI 4-Continent Executive MBA, Associate Dean of the Cardiff University School of Business, and Linas Šiautkulis, Head of Media Agency BPN Lietuva, BMI EMBA student, Chairman of the Board of LiMA, discuss neuromarketing.

What is neuromarketing and why is it important?

Robert E. Morgan (R. E. M.): Neuromarketing helps to understand why the consumer is making this decision and not the other. Traditional marketing research, such as surveys, focus group discussions and the like, has been carried out since the 1960s. Attempts were made to understand and interpret the behaviour of consumers displayed in different situations. Later, companies like Apple created confusion by changing their approach to marketing. They discovered that consumers are unable to explain their decisions rationally. High-tech companies create a strong psychological and emotional attraction to affect the user at the subconscious level. Certain chemicals are released in the human brain that create a sense of need. Among those is the dopamine hormone that promotes euphoria and a sense of satisfaction and well-being, which leads to addiction. And it spread widely. Not only has iPhone changed the way users interact with technology, but also the users’ relationships with their other needs and the way they make choices to satisfy them, for example, where to eat, which bar to go to or how to schedule one’s meetings for next week. This changed the user’s expectations and behaviour, so it is crucial for contemporary companies to know more, or, in other words, to know their consumer better.

What are the most important aspects of neuromarketing?

R. E. M.: You shouldn’t start applying neuromarketing methods just because everyone else is doing that, you shouldn’t follow the fashion blindly. I’ll repeat – the goal of neuromarketing is to find out more information about what motivates consumers, their emotions and their effect on consumer behaviour. We have this neuromarketing tool, but we know very little about what to do with the information we acquire, how to use it. Moreover, this process is not cheap, so you shouldn’t rush into it. Another important issue that we face is the issue of ethics. Insights obtained through neuromarketing can be interpreted or used in an unauthorized manner. Advertising is a huge manipulation machine, but the consumer is still able to choose and make a decision on his/her own. In my opinion, neuromarketing should not be used in political campaigns, nor should it be used for influencing election results or for the purpose of propaganda. If the information about consumer behaviour falls into the wrong hands, it could easily become a tool for manipulation. This is the dark side of neuromarketing, which should therefore be subject to legal control.

What neuromarketing methods are used in digital economy?

Linas Šiautkulis (L. S.): Neuromarketing plays a special role in digital economy and is developing very fast in this realm. The main reason is the extremely quick user’s response to the content presented to him/her and the extreme importance of the content. A single photo can lead to larger or smaller sales. As much as 80 percent of all buying decisions are made in the physical store while standing next to the goods, while in the digital space the whole 100 percent of decisions are made on the spot. It is easy to instantly check which colour, photo or text will attract more consumer attention by showing the photo A to one group and photo B to another. Basic neuromarketing methods in e-commerce are often based on the basic psychological patterns of human beings and the resulting principles of influence, such as limited supply, social validation, consistency, etc. A great example is the Booking.com hotel reservation platform. The entire user experience is designed to make you feel like you have made the best choice when you book a hotel. Some of the strongest principles of psychological influence are applied in the single hotel selection window, reinforced with photos that arouse positive emotions, though it is highly unlikely that the hotel will look just as good upon arrival as it did in the photos. Let’s start with the limited supply principle: you get the warning that fourteen other people are currently viewing the same hotel room, also, that a room in this hotel was booked an hour ago, that there are only two other rooms left, and it is written in red. At the same time, you are being pressured for social validation, you are told that this is the best deal, that you can get it with the GENIUS discount, that it comes recommended by as many as 2,000 people, and so on. Stars, thumbs up and positive comments by other users leave no one indifferent, so, as if unwittingly, you go and book the room. They are even ready for users who are in doubt: they provide reassurances, an option to cancel the booking for free and so on. It all happens on the screen of a laptop or a smartphone, where there is no way to objectively assess or compare the deal with other deals. These methods are evident in most major e-commerce websites, and it is interesting to note that the means are being constantly improved in order to achieve the main goal – to provide a seamless and pleasant consumer experience so that the consumer does not stop during his “purchase journey” to think, so that the process goes smoothly and the consumer even ticks the “I agree with terms and conditions” without reading the whole agreement.  

Linas Šiautkulis

How does neuromarketing obtain information about consumer behaviour?

R. E. M.: Traditional research is still relevant and important, but when you combine it with neuromarketing methods, it becomes possible to uncover more information about consumer motivation, their emotions and the affect that emotions have on consumer behaviour. Three parts of the brain are responsible for different functions of human activity: the new brain (mammalian/paleo brain or lymphatic system) is responsible for feelings, the middle brain (or neocortex) is responsible for thinking, and the old brain (reptilian brain or R-complex) is responsible for decision making to meet basic needs and processes. The goal of neuromarketing is to apply the neuromarketing methods in order to identify and understand the brain mechanism that determine consumer behaviour and to increase the effectiveness of actions of business organisations. For example, we identify red colour with Coca-Cola. A certain process takes place in our brain when we see red: our brain receives a signal that makes us feel thirsty, then the old part of the brain is turned on and it affects our behaviour. Another example: the UK chocolate brand Cadbury is associated with the purple colour. Once a person notices the purple colour, he/she starts craving something sweet. Neurological and biometric changes take place in the brain. Neuromarketing helps companies to know their clients better than they know themselves.

Could you provide some good practice examples? Which companies have applied neuromarketing successfully?

L. S.: Let’s define some key points. If we talk about neuromarketing based on application of neuroscience research, such as magnetic resonance imaging and video oculography (eye-tracking), then, naturally, it is mostly applied by the largest global companies such as Google, Microsoft, Disney, Hyundai and Coca-Cola. They have separate departments analysing consumer behaviour and their reactions to products and advertising in order to gather more information about consumer behaviour. For example, Coca-Cola invests millions in this area and employs big teams of neuroscientists. The company used electroencephalography (EEG) to determine consumer response to a commercial with a precision of one second and one film frame. They found out what arouses positive emotions in consumers and what they feel indifferent about, even when consumers are unaware of their own reactions. Another example is about a diaper producer which applied video oculography (eye-tracking) to analyse an add that features a smiling baby, looking straight into the viewer. They discovered that when the baby is looking straight, the viewer’s attention is focused on the baby’s face, while the promotional text, which is next to the baby, remains unnoticed. With that in mind, the company started producing advertisements where the baby is looking to the direction of the text or the product so that the viewer’s gaze would follow it. The famous Olympic Thank You Mom video ad for P&G is considered one of the best examples for neuroscience at work, because when analysed with an electroencephalograph it showed extremely high emotional involvement of both men and women. The application of neuroscience is not limited to advertising, it is indispensable in product and packaging development. For example, Lays crisps chose a matte finish for their packaging, because research showed that consumers are irritated by bright, glossy colours.

Published IQ 2019 No. 8