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MANAGEME
NT
PRESENTATION ON:
NEUROMARKETING
WHAT IS NEUROMARKETING?
For example, neuromarketing research can tell a seller what a buyer really does
like about a package. Does a sexy packaging really stimulate young men in the way it was
planned? Neuromarketing research can help answer that. Neuromarketing research can tell
a seller if a potential buyer has increased brainwaves in areas of the brain the seller may
want to stimulate, such as the amygdala, an important brain structure heavily involved in
human emotions.
Many of the top companies in the world have already turned to neuromarketing
research to gain an advantage in the advertising world. Much of the rush on
neuromarketing occurred following an article published in the 2004 edition of Neuron.
This study involved the “Pepsi Challenge.”
During a taste test between Coca-Cola and Pepsi, 67 people had their brains
scanned. After studying results showing stronger responses in the brain’s ventromedial
prefrontal cortex after tasting Pepsi, and the lateral prefrontal cortex and the hippocampus
responses after told they were drinking Coke, an interesting conclusion was drawn.
What neuromarketing research showed is that the taste of Pepsi alone should have
allowed it to share about 50% of the market share, but it didn’t. People were choosing
Coca-Cola based on their personal experiences with the Coca-Cola brand name. This could
allow Pepsi to divert money that would have gone into improving taste, into increasing the
positive impression the Pepsi brand has on people
OLDER TECHNIQUES OF NEUROMARKETING:
Pupilometer
In 1981, came the use of brain wave monitoring using SST (Steady State
Topography). Professor Richard Silberstein at Swinburne University was using
SST in pure and clinical applications and was investigating the ways in which it
can be used beneficially in marketing. Even though the technology at the time had
a long way to go. Today, 25 years later, it has been proved that SST can provide
revealing insights in marketing with the benefit of a quarter century of accumulated
experience in interpreting SST brain wave activity.
Early Examples:
One of the oldest experiments using the newer technology was by Ambler
and his colleagues at the London Business School. It asked people while they were
in a MEG scanner, which of 3 brands they would purchase and found that familiar
brands stimulate the right parietal cortex. The authors pointed to this area as the
possible ‘location of brand equity’.
In the year 2000 A group of scientists, used SST to study brain Waves, while
people watched TV advertisements, and thus they were able to predict which
scenes people would be able to recollect after one week, they found that they could
predict this from the activity going on in the left brain. Till which time it was
thought that it was, in the right brain that the crucial processing of pictorial data
was carried out in the right hemisphere of the brain.
• The subject in a typical experiment will lie in the magnet and a particular
form of stimulation will be set up. For example, the subject may wear
special glasses so that pictures can be shown during the experiment. Then,
MRI images of the subject's brain are taken. Firstly, a high resolution single
scan is taken. This is used as a background for highlighting the brain areas
which are activated by the stimulus. Next a series of low resolution scans
are taken over time, for example 150 scan on every 5 second. For some of
these scans, the stimulus (in case of moving picture/advertorial) will be
presented, and for some of the scans, the stimulus will be absent. The low
resolution brain images in the two cases can be compared to see which parts
of the brain were activated by the stimulus.
• After the experiment has finished, the set of images are analyzed. Firstly,
the raw input images from the MRI scanner require mathematical
transformation to reconstruct the images into 'real space', so that the images
look like brains. The rest of the analysis is done using a series of tools
which correct for distortions in the images, removes the effect of the subject
moving their head during the experiment, and compare the low resolution
images taken when the stimulus was off with those taken when it was on.
The final statistical image shows a bright in those parts of the brain which
were activated by this experiment. These activated areas are then shown as
colored blobs on the top of the original high resolution scan, for
interpretation of the experiments. This combined activation image can be
rendered in 3D, and the rendering can be calculated from any angle.
Brand imaging:
Even the finest- grained brain imaging techniques only measure activity of
‘circuits’ consisting of thousands of neurons. In single neuron measurement, tiny
electrodes are inserted into the brain, each measuring a single neuron’s firing. As
we discuss below, single neuron measurements studies have produced some
striking findings that, we believe are relevant to economics. A limitation of single
neuron measurement is that, because insertion of the wires damages neurons, it is
largely restricted to animals.
Quadrant I:
Quadrant III:
Your first task is to figure out what is on the plate. The occipital cortex in
the back of the brain is the first on the scene, drawing in signals from your eyes via
your optic nerves. It decodes the sushi into primitive patterns such as lines and
corners, and then uses a cascading process to discern larger shapes.
Quadrant IV:
This is where affect enters the picture. Neurons in the inferior temporal
visual cortex are sensitive only to the identity of an object; they don’t tell you
whether it will taste good. Outputs of the inferior temporal visual cortex as well as
outputs from other sensory systems feed into the orbitofrontal cortex to determine
the foods reward value. Reward value depends on many factors i.e. if your personal
history with sushi, the reward value of the sushi will depends on your current level
of hunger etc.
Parallelism:
Plasticity:
Modularity:
Neurons in different parts of the brain have different shapes and structures,
different functional properties, and assemble themselves into relatively discrete
modules that are functionally specialized. Progress in neuroscience often involves
tracing well known psychological functions to circumscribed brain areas. Beyond
uncovering the modular structure of the brain, neuroscience has led to the
discovery of new functional modules. Beyond the standard modules, such as face
recognition, language and so on, research hints at the existence of some modules
that are quite surprising.
Specialization:
In a process that is not well understood, the brain figures out how to do the
tasks it I assigned, effectively, using the modules it has at its disposal when the
brain is confronted with a new problem it initially drowns heavily on diverse
Affective processes:
modules, including, often the prefrontal cortex. It naturally follow that for a
wide range of problems and tasks, people will rely on cognitive capabilities-
modules that are relatively well developed, such as visual perception and object
recognition rather than operation that we not very good at, like decomposing and
then summing up costs and benefits.
Homeostasis:
To understand how the affective system operates, one need to recall that,
human did not evolve to be happy, but to survive and reproduce. An important
process by which the body attempts to achieve these goals is called homeostasis.
Homeostasis involves detectors that monitor when a system departs from a set –
point, and mechanisms that restore equilibrium when such departures are detected.
The role of homeostasis in human behavior poses a fundamental challenge to
economic account of behavior. An important feature of many homeostatic systems
is that they are highly attuned to changes in stimuli rather than their levels.
Competition:
ADVANTAGES OF NEUROMARKETING:
DISADVANTAGES OF NEUROMARKETING:
Each consumer has different stimuli and even creating a standard pattern
it’s difficult to know such a heterogeneous group.
It’s also difficult to find consumers that agree to be part of a
neuromarketing scientific study.
INSIGHTS OF NEUROMARKETING:
Our "old" brain often overrides our voice of logic and drives all buying
decisions for reasons beyond our conscious awareness. To influence customer's
buying decisions, we must learn how the "old" brain operates and speak its
"language." Below are 7 key insights about the customer,
Marketing strategies that mirror brain and thinking realities are more likely
to be successful than those which do not. Below are 15 well-researched midbrain
bulls-eye targets for marketing strategies to accommodate.
Memory is Faulty:
Human memory is not nearly as good as we want to think it is. New,
complex, fragmented, unemotional and unmeaningful messages won’t be
remembered very well, even the next day. Attention demand is at a fiercely
competitive premium for clear, good, fast and simple but powerful messages via
positive mental imagery. Empty secondhand words and abstract notions get lost in
the mind’s crevices.
We are Paradoxical:
At the same time, we have much in common and are much different. We often
want our cake eat it too-wanting our individuality to be accepted and wanting to be
treated equally at the same time. Successful marketing strategies have to
accommodate both group similarities and the wide range of individual differences
as much as possible.
We think in Threes:
Three is a magic number we like, because it offers a softer alternative
between harsh opposites like yes-no, right-wrong and excellent-poor. The third
category allows for the needed ‘may be’, ‘a little right and a little wrong’ and
‘average’. Food menus that have three sections- appetizers, entrees and desserts hit
pay dirt like the power of the three sided pyramids, movie trilogies and tricycles for
kids.
Ethics of neuromarketing:
Neuromarketing is upon us. Companies are springing up to offer their clients
brain-based information about consumer preferences, purporting to bypass focus groups &
other market research techniques on the premise that directly peering into a consumer’s
brain while viewing products or brands is a much better predictor of consumer behaviour.
These technologies raise a range of ethical issues, which fall into two major categories:
In 1957, the marketing executive, James Vicary announced that he had increased the sales
of food & drink at a movie theater by secretly flashing subliminal messages with the words
“Drink Coco Cola & Eat Popcorn”. The study was never published & may have been a
hoax, but the episode illustrates the public’s strong reaction to convert manipulation. With
growing public understanding that the brain is the mediator of behaviour, the public’s
reaction to neuromarketing intrusions into their brains may prove to be equally vigorous.
The term ‘neuromarketing’ identifies a new field of research championed by both
academics & self-labeled companies using advances in neuroscience that permit powerful
insights into the human brain’s responses to marketing stimuli The goals of
neuromarketing studies are to obtain objective information about the inner workings of the
brains of consumers without resorting to the subjective reports that have long been the
mainstay of marketing studies. Thus neuromarketing should aim to provide qualitatively
different information ostensibly superior to that obtained by traditional means about the
economically valuable topic of consumer preferences.
We first consider a set of issues that merit ethical analysis irrespective of whether
the most speculative claims of neuromarketing hold up to rigorous scientific analysis.
Ethical development of neuromarketing requires protection of research subjects,
responsible business-to-business advertising & accurate representation of the state of the
art of the technology to the public. Each of these duties can be ensconced in an industry-
wide code of ethics that we propose be adopted by all researchers & vendors of
neuromarketing & enforced by a discerning marketplace of neuromarketing consumers
doing business with companies voluntarily adhering to the code of ethics.
Special ethics review should be a minimum standard for neuromarketing research that
either involves or targets vulnerable populations. Among the individuals that would fall
under this umbrella are persons with neurological disease or psychological disorders,
children & other members of legally protected groups. Our neuroethical concern is about
potential harm to vulnerable persons as:
Stealth neuromarketing
The most vexing of the issues raised by neuromarketing is in the realm of autonomy. One
could argue that the essential objective of marketing as a discipline is to manipulate
consumer behaviour-effectively, a soft attack on autonomy. Moreover, many of the
traditional tools of marketing such as focus groups & polls rely upon nuanced
interpretations of human psychology to draw conclusions about consumer behaviour &
then use that information to inform marketing decisions. The implicit question is whether
the new tools of neuromarketing will provide sufficient insight into human neural function
to allow manipulation of the brain such that manipulations result in the desired behaviour
in atleast some exposed persons.
Disclosure can be achieved through the publication of ethics principles that have
been adopted to protect the privacy & autonomy of human subjects & consumers.
Publication infers all aspects of the process from consent documents to reporting &
advertising & applies to both verbal & written communication.
Conclusion
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