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Con umer

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Emoti ns
 Different Types of Consumer Emotions

Complaining
Fear
Service failures Emotions were
Pride
Regret considered
Frustration “bad”
Anger influences that
Anxiety
might lead to
Embarrassment
Surprise suboptimal
Sympathy or empathy decisions, since
Sadness they may be
Peace/comfort focusing on only
Envy a subset of all
Loneliness information.
Generosity/Selfish
Love/Hate
Why have managers ignored emotions?


The rule of thumb was :

Something that cannot
be well quantified,
measured or segmented
cannot be well managed.
If it can’t be managed
then it can’t be
strategically planned for
and hence, has no role in
managerial decisions.
 Emotions versus
Cognitions

1) Emotions were considered the

antithesis of reasons.
2) Consumers were expected to make a
logical connection between thoughts/
feelings and shopping behavior.

Problems:
Don’t know why they did it;
But they try to give a post-hoc reason
based on what the brand portrays and
what they now believe;
Trying to explain feelings logically to make
intuitive sense or to appear reasonable.
 Emotions versus Cognitions

■ Today emotions are found to be the foundation of decisions,

thoughts, and actions
■ Emotions might lead to very rational or “good” decisions
– You see a bear and run out of fear
– Emotional responses are way faster than cognitive responses and support
several survival decisions

■ Marketplace = filled with brands too many choices

■ Why/How does a consumer choose one brand over the other?
– At the final point of decision her emotional/gut instincts prevail
 Marketing Strategy

■ Campbell’s soup
– Childhood and family feelings
– Campaign theme “M’m, M’m!
Good for the body, good for the
soul.”

■ Haagen-Dazs cafes in Asia and

Europe
– Associate the joys of eating ice-
cream with a romantic retreat
– Offers ice-creams with romantic
themes (Waltzing romance, Hearts
of hearts, Truly deeply madly)
 Emotion drives reason more than reason drives
emotions!

■ Three-part brain:
■ Reptilian or old brain - related to
experiencing sensory stimuli, pattern
matching, comparing experiences,
allows humans to gauge levels of
comfort and security, fight or flight
instincts
■ Limbic system / emotional center –
converts sensory inputs into emotion
responses, interfaces with the “new”
rational brain, assigns value to
incoming stimulus
■ Rational/reasoning brain (neocortex)
- cultural norms, gives meaning,
reflective, conscious, deliberative,
pros-cons, also called the “mind”
 Emotion drives reason more than reason drives
emotions!

■ Emotional brain acts as the integrator between the

reptilian and reasoning brain
■ It focuses human attention to specific stimuli that it
thinks are important based on the strength of
emotional responses
■ Research also indicates that more messages from
emotional brain are conveyed to the rational brain
(and faster) than the other way round by an order of
almost 10 to 1
■ Emotions flood the brain first before we can over-
ride or correct them with the slower response from
the rational brain
■ Emotional part of the brain is larger than the
rational part
■ Only the Reptilian brain and the Emotional brain
can control muscle activity, not the rational brain (a
person told to smile versus one who smiles
spontaneously, 1000s of muscles are needed for a
natural smile, no emotion = no real smile)
 Emotion drives reason more than reason drives
emotions!

■ Emotional responses are stronger and

dominate the more rational response. Think
overcoming phobias…
■ A purchase purely based on emotions is
more difficult to question than one based on
focusing on the pros and cons
– “I liked it so I bought it” “it makes me happy”
■ Rational thoughts take longer to arrive at
conclusions
■ During the time the rational brain is
processing information, the emotional brain
may already be coloring it with its responses
■ Emotional/ gut reactions are generated in 3
seconds or less (1/5th of the time it takes for
the rational brain to even assimilate the
stimulus)
 How do you measure emotional responses?

Simple questionnaire in which you

ask people their like/dislike
ratings;
Self assessment Mannequins;
Study of facial expressions;
Skin conductance responses;
fMRI.

• The first two are easy to

administer. However self-reports
may not be accurate
• Third is subjective
• The last two are intrusive
 Do people remember the complete emotional
experience?

■ Does a consumer remember all the

emotional experiences of a vacation equally?
■ Two people undergoing the same painful
medical procedure were asked to report their
level of pain minute by minute. Later, they
were asked how they felt about the procedure
in retrospect.
■ The test left a worse impression on patient A,
for whom it lasted less than ten minutes, than
on patient B, who suffered for 24 minutes.
■ Patients' recollections were heavily colored
by the procedure's worst moment and its last
moment (“Peaks and End” rule). The
duration of the pain did not seem to make
much difference. Patients were happier about
a procedure that lasted longer but ended
better.
 Emotional memory and processing

■ Recall is emotion-based (Sep 11,

2001)
– Hippocampus (memory device) is
next to the amygdala (the emotional
hub), both are in the emotional brain
– 2b-adrenoceptor gene promotes
memory formation--but only if it is
stimulated by adrenaline. It acts as a
gatekeeper that decides what will be
remembered and what discarded.

■ .0005% of mental activity is conscious

■ Brain takes in 400 million bytes of
information every second but only
2000 bytes are processed consciously
 If emotions were removed……

■ Patients with damage to the ventromedial

prefrontal cortex exhibited normal intellect
and problem solving abilities. However, they
took decisions or actions that led to financial
and social losses
■ Inability to use emotions in their decision
making since their emotional memory for
positive or negative events was damaged
■ Corroborating data using Skin conductance
showed that people with no damage showed
a large anticipatory Skin conductance
reaction before major decisions whereas
those with damage did not
■ People with damage to amygdala, the
emotion center, also showed similar non-
response
■ It indicates that if emotions are not involved
there is no bodily reaction and the lack of
emotions in decision-making leads to
disadvantageous decisions
Emotions and Pricing

Sell price Buy Price

Emotions and Brand Personality

• “Branding occurs only in the mind and may

not have a physical reality” (Al and Laura
Reis)
• Experiences rewire the brain by fusing together
neural networks what we have seen
predisposes us to what we can and likely will see
the next time
• Memories build around neural connections that
grow more dense and weighty if repeatedly forged
and reinforced

• Tell a lively, engaging story about your brand

that defines its position in consumers hearts
and mind
• Advantages
• Over time the functional benefits can be copied by
competitors
• The brand personality supersedes the functional
benefits and has more to do with trust, enjoyment,
and created associations
• It helps consumers symbolically express their
aspired selves
• A differentiating tool
• A common theme for all its messages and products
 Examples

Wal-Mart “Always low prices. Always”

Low prices are important and I will find them at Wal-mart

Give huge price cuts on Signpost items that have high household
penetration and high purchase frequency;
Signpost items convey and reinforce the message of low prices;
Top-down processing helps solidify the brand personality that
Wal-Mart offers low prices.
 Emotions and Advertising

■ Understand the emotions that are relevant for your target

market and focus on them in your advertising
■ Post purchase, if a consumer sees your ad, will it reinforce the
emotional connection or will she question the value of her
purchase
■ Don’t focus on too much creativity and winning awards
■ Statistics
– 91% women believe that advertisers don’t understand them and 58%
are annoyed at the portrayal of their gender
– 79% men barely recognize any portals in the ads to be similar to
themselves
 Emotions and Customer satisfaction

■ Welcome people’s opinions, create easier

access, be ready and willing to answer
questions, reward curiosity
■ Amazon.com
– Customer service = research and
development lab
– Every complaint can be an opportunity to
grow
■ Apple
– Converting the customer service desk into
the “genius bar”
– Gives customer complaints a positive effect
– Rated the best retailer of the year
■ An opportunity for the consumer to
change negative affect into a positive
experience. Consumer would remember
the service encounter. “End” rule could
apply
 Sensory Branding

Brands that appeal to multiple senses

will be more successful than brands
that focus only on one or two:

Singapore airlines incorporate the same

scent, Stefan Floridian Waters, in the
perfume worn by flight attendants, in
their hot towels, and other elements of
their service;

Smell is potent in bypassing conscious

thought and creating associations with
memories and emotions;

The new car smell or the car door closing

sounds.
 Nike Brand Strategy:
Emotional Branding using the Story of Unlimited
You!
 marketing
Neuro
 Why Neuromarketing?

Using Neuroscience techniques to

understand consumer decision making;

Neuromarketing is considered the hot

new topic in marketing;

It seems like it allows marketers to look

inside a consumer’s mind;

fMRI (Functional magnetic resonance

imaging), QEEG (Quantitative
electroencephalography), and MEG
(magnetoencephalography);

Several new fMRI facilities are

opening devoted only to
neuromarketing than medical research.
 Findings using Neuromarketing

■ Coke versus Pepsi

■ Repeat of the Pepsi Challenge
■ Volunteers took a sip when their
brains were being scanned
■ Blind taste test: 50% preferred
Pepsi and ventromedial
prefrontal cortex (reward center)
lit up. Region that is related to
discerning tastes
■ Brand name is made known:
75% say they prefer Coke.
Activation of the hippocampus,
midbrain and dorsolateral
prefrontal cortex for people who
knew they were drinking Coke.
Regions related to affect, cultural
meanings and emotional
attachments.
■ The brand image (with its
associated emotional tags) of
Coke wins over taste perceptions
 Findings using Neuromarketing

Analyzing the responses of viewers to television commercials

and other forms of advertising;

Exploring the effects of looking at happy or sad facial

expressions (implications for sales staff interactions), exploring
the mental states of motorists driving against a deadline and
examining how people react to an unexpected ‘freebie’.

Can Neuromarketing be used to find the elusive “buy-

button”? No, but it can increase our understanding of how
consumers arrive at product decisions;

Brain images can provide insights into consumer choices

which would not otherwise come to light.

In some instances it may be that these preferences cannot be

articulated, no matter how skilled the interviewer or how co-
operative the subject, because they operate below the level of
conscious awareness.

People in focus groups or survey may not report their actual

responses. Brain scans instantly tap on to their actual
responses
 How do fMRI’s work?

■ The fMRI measures the magnetic

properties of the Hemoglobin. This is
the component of the blood that carries
oxygen around the body
■ fMRI works by measuring the amount of
oxygenated blood throughout the brain
■ It can pinpoint areas as small as 1
millimeter
■ When a brain region is operating on a
specific task it demands more fuel –
mainly oxygen and glucose. The harder
it works, the more fuel (oxygen) it will
need. So more oxygenated blood will
flow to that region
■ During an fMRI the portion of the brain
which is being used for a specific task will
light up
 MRI versus fMRI

An fMRI uses the standard MRI machine but requires

custom software and additional hardware
 Typical fMRI Experiment
Test Condition Rest Condition
Read Words Look at a string of ‘+++
banana, house, tree, bottle, … +++’ symbols
HRFs
Test Test Test Test

Rest Rest Rest Rest

Any area of the cortex that is involved in reading words should

produce a BOLD signal that looks something like this.

*By using ‘++++++’ as the “rest condition,” any areas that are used in lower-level visual
processing will be “subtracted out” (e.g., primary visual areas).
Statistical Results
From a Language
Processing
Experiment



Areas of significant
activation are
displayed on a series
of axial slices
 fMRI
Activation
Displayed on
3D Brain
Surface
Rendering
 Brain scans used to compare superbowl ad effectiveness

■ Participants aged
18-34 viewed
superbowl ads to
measure emotional
impact

■ The GM ad

■ The Honda ad
 A study on effectiveness of cigarette warnings

■ Very gory and realistic pictures are shown of

health effects of smoking. Very clear
warnings on each package
■ People in questionnaire state that the message
works and has reduced their smoking habits
■ However, smoking behavior does not reduce
■ A 3 year fMRI study was conducted in
Britain. Smokers were shown these warning
labels and they were shown various health
warnings of smoking. They were asked to
rate their desire to smoke. They were asked
not to smoke for 4 hours during the study
■ The fMRI results showed that the nucleus
accumbens known as the “craving spot” was
activated when the health warnings were
flashed
■ The health warning did not reduce their
craving to smoke
 Immediate gratification or long term gains?

■ Do you eat the delicious chocolate cake or

stick to your health goals? Spend and
enjoy a product or save for the future?
■ Choice between receiving $15
immediately or $20 after 2 weeks
■ Both gifts triggered the lateral prefrontal
cortex, the area that generates emotions
■ BUT the immediate $15 caused lots of
activity in the limbic system, the area that
governs most of our emotional life and for
the formation of our memory.
■ Therefore, the more emotionally excited
people are, the more likely that they will
accept the immediate reward
■ Implies that emotions win out in certain
situations – answer to why people seem to
behave irrationally and not according to
economic theories
 Placebo effects in Marketing

■ Placebo effect – give patients a sugar

coated pill instead of medication and
they would still show improvement
■ Neuromarketing suggests that placebo
effects influences the brain’s reward
centers
■ Placebo effects demonstrate the self-
healing powers of humans and seems
to indicate that people don’t really
need medication; they just need to
believe that something will work
■ Similar to creating an expectation
and making sure that the expectation
is not destroyed
Some cited drawbacks

■ Costs anywhere from $10,000-$50,000 to

test one ad
■ A very unnatural environment when the
responses are being recorded
■ It cannot find the “buy button” in a
consumer’s brain
■ Activation in a specific part of the brain can
mean several things
■ Some ads that caused the maximum brain
activity later led to very poor recall
■ Other factors like social norms, monetary
constraints will determine several consumer
decisions
Thank You