Neuromarketing:

how to understand consumer’s mind

 Customer satisfaction

• Customer satisfaction and business success

• “The key to customer retention is customer satisfaction”

Consumer‘s mind

“Marketing and environmental stimuli enter the consumer’s c

onsciousness or subconsciousness. A set of psychological pr
ocesses combine with certain consumer characteristics to res
ult in decision processes and purchase decisions.

The marketer’s task is to understand what happens in the cu

stomer’s consciousness between the arrival of the marketing
stimuli and the ultimate purchase decision.”

Kotler and Keller (2006)

• The main objective of marketing is to help match products
with people. Marketing serves the dual goals of (1) guiding t
he design and presentation of products such that they are
more compatible with consumer preferences and (2) facilitati
ng the choice process for the consumer.
Neuromarketing

“By studying activity in the brain, neuromarketing combines

the techniques of neuroscience and clinical psychology to o
btain insights into how we respond to products, brands, and
advertisement.

From this, marketers hope to understand the subtle nuances

that distinguish a dud pitch from a successful campaign.”

- Mucha (2005)
• There are two main reasons for this trend. First, the possibilit
y that neuroimaging will become cheaper and faster than ot
her marketing methods; and second, the hope that neuroima
ging will provide marketers with information that is not obtai
nable through conventional marketing methods.

• There is growing evidence that it may provide hidden inform

ation about the consumer experience.
 Neuromarketing - linking science and marketing

• Overconsumption and compulsive shopping can be traced bac

k to a dysfunction of the orbitofrontal cortex (ORF)
Leake (2006)

• Impulsive buying decisions are based on the emotional state of

the buyer (governed by the limbic system), rational buying decis
ions are processed in the frontal cortex.
Mucha (2005)

• Memory retention is processed in the amygdale and ventro-me

dial lobes (VFML)
Ambler, Ionnides and Rose (2000)

• Irrational buying is associated with the autonomic nervous syste

m
Peterson (2005)
What are the potential impacts
of neuromarketing?
Neuromarketing-
its potential impact on product development

• flavour

• smell

• colour

• health/fashion trends

• identifiying new target groups

Neuromarketing-
its potential impact on product packaging/design

• logo

• colour scheme

• packaging materials

• packaging size

• limited editions

• smell
 Neuromarketing-
its potential impact on advertisement designs

Poster/billboards
Radio promotion
size sports person
balance music
information/entertainment

slogan/message Colour arrangement length voice

TV advertisement

balance information colour arrangement

length image

product focus voice/music

13
Neuromarketing-
its potential impact on promotion campaigns

Posters/billboards Sponsoring

-location -celebrities
-duration -events

Web adverts
TV/ radio adverts
-duration
-channels/stations
-contents
-time slots

Freebies/promotion extras

-location
-product choice
Neuromarketing-
its potential impact on distribution

• shelving

• product grouping

• special offers

• smell

• music

• general atmosphere

• availability
 Pepsi Challenge

• The Pepsi Challenge has been an ongoing marketing prom

otion run by PepsiCo since 1975.

• The challenge takes the form of a taste test. At malls, shoppi

ng centers and other public locations, a Pepsi representative
sets up a table with two blank cups: one containing Pepsi an
d one with Coca-Cola.
• Shoppers are encouraged to taste both colas, and then selec
t which drink they prefer. Then the representative reveals th
e two bottles so the taster can see whether they preferred C
oke or Pepsi.
• The results of the test leaned toward a consensus that Pepsi
was preferred by more Americans.
Competition between taste and brand power

Most people liked the taste of Pepsi, yet the majority bought coke.
This is the brand power.
Human Neuroimaging lab, Baylor College of Medicine
New York Times 10/26/03
 Neural correlates of culturally familiar brands of car m
anufacturers (Schaefer et al., NeuroImage, 2006)

• The aim of this study was to examine the neural correlates of cultura
lly based brands. We confronted subjects with logos of car manufact
ures during an fMRI session and instructed them to imagine and use
a car of these companies.
• As a control condition, we used graphically comparable logos of car
manufacturers that were unfamiliar to the culture of the subjects part
icipating in this study. If they did not know the logo of the brand, th
ey were told to imagine and use a generic car.
• Results showed activation of a single region in the ‘medial prefronta
l cortex’ related to the logos of the culturally familiar brands.
Results showed activation of a single region in the medial prefrontal cortex
related to the logos of the culturally familiar brands. We discuss the results as
self-relevant processing induced by the imagined use of cars of familiar brands
and suggest that the prefrontal cortex plays a crucial role for processing
culturally based brands.

• Michael Schaefer, Harald Berens, Hans-Jochen Heinze and Michael Rotte, Neur
al correlates of culturally familiar brands of car manufacturers, NeuroImage 31
(2):861-865 (2006)
 Thinking on luxury or pragmatic brand product
s (Schaefer and Rotte, Brain Res, 2007)

• They aimed to examine whether socioeconomic information convey

ed by certain classes of brands (prestigious versus pragmatic classes)
differentially evoke brain response.
• We presented icons of brands while recording subject's brain activity
during a functional magnetic resonance imaging (fMRI) session. Aft
er the experiment, we asked subjects to assess the brands according t
o different characteristics.
• Michael Schaefer and Michael, Rotte, Thinking on luxury or pragmatic brand pro
ducts: Brain responses to different categories of culturally based brands, Brain Re
search, 1165(24):98-104 (2007)
 Sports car is a social reinforcer!

• Using event-related fMRI, they investigated the rewarding properties of cultural

objects (cars) signaling wealth and social dominance.
• It has been shown recently that reward mechanisms are involved in the regulatio
n of social relations like dominance and social rank.
• Based on evolutionary considerations they hypothesized that sports cars in contr
ast to other categories of cars, (e.g. limousines and small cars), are strong social r
einforcers and would modulate the dopaminergic reward circuitry.
• Erk, Susanne; Spitzer, Manfred; Wunderlich, Arthur P.; Galley, Lars; Walter, He
nrik, Cultural objects modulate reward circuitry, NeuroReport, 13(18): 2499-2
503 (2002)
• On the basis of the hypothesis that brands may function as reward stimuli, we
investigated brain responses to favorite brands.
• Results revealed activity in the striatum for favorite brands that positively correl
ated with sports and luxury characteristics, but negatively with attributions to a
brand of rational choice. Reduced activation of a single region in the dorsolate
ral prefrontal cortex was demonstrated when viewing the most beloved brand,
possibly suggesting reduced strategic reasoning on the basis of affect.

• Michael Schaefer and Michael Rotte, Favorite brands as cultural objects modula
te reward circuit, NeuroReport 18(2):141-145 (2007)
 Important issues in this lecture

1. What is the neuromarketing? What are the reasons for th

e neuromarketing trends? What are the benefits and adv
antages of the neuromarketing approach over convention
al market research methods?
2. What are the potential impacts
of neuromarketing? Name examples of success or failure
cases in real.
3. What are the Pepsi challenge and its fMRI experiment ver
sion? What are the implications of the results in the chall
enge?