CONSUMER BEHAVIOUR ASSIGNMENT – II

A summary and analysis of ‘Neuromarketing: Identifying and Satisfying

Consumers’ Latent Wants – A Review’

Submitted by
Imrat Singh
(MFM/19/117)

Under the supervision of

Dr. Harleen Sahni

Submitted to
Department of Fashion Management Studies
National Institute of Fashion Technology
(Ministry of Textiles, Govt. of India)
GH-0 Road, Behind Infocity
Gandhinagar 382007. Gujarat
http://www.nift.ac.in
April 2020
Summary

Objective: In the article ‘Neuromarketing: Identifying and Satisfying Consumers’ Latent Wants – A
Review’, the authors review the current and past research in the field of neuromarketing and critically
analyze the tools and methods of neuroscience that are used to directly study instances of brain activity,
which are applied for strategising neuromarketing. The aim of the study is to identify the potential of
neuromarketing in the field of consumer behaviour and its scope in marketing. It also suggests future
research directions and the commercial scope of neuromarketing.

Methodology: The research article systematically reviews, identifies, apprises and synthesizes research
evidence and perspectives from findings of the research works published in reputed scholarly journals and
magazines in various mediums. Studies conducted in various laboratories for neuromarketing are
compiled, reviewed and discussed in the article.

The authors of the article (Krishnan, Anand, & Saju, 2016) begin by citing (Nobel, 2013) to explain the
application of neuroscience in consumer behaviour. It states that people do not evaluate the worth of the
items that they purchase in terms of the various factors (hidden elements) that influence their purchase;
they only focus on their preferences and its monetary values. Therefore, application of neuroscience is
such situations can help in understanding the hidden elements of the consumer’s decision process.

Neuromarketing is a rapidly emerging branch of neuroscience; researchers use medical technology to

determine consumer reactions to and perceptions of brands, slogans, and advertisements. (Plassmann,
Ramsoy, & Milosavljevic, 2012) state that the application of neuroscience in neuromarketing, and in
particular, to consumer psychology has emerged as Neuromarketing. There are numerous advancements
in neuroscience and these include tools like eye tracking, brain scanning and imaging equipment. Such
tools help in discerning how consumers’ brains respond to products, services, advertisements, buying
experiences, etc.

Research in neuroscience includes a wide variety of studies, including that of single brain cells to those
on different areas of the brain. Erasmus University professor, Ale Smidts in 2002, coined the term
‘Neuromarketing’. The application of research in neuroscience to neuromarketing was not acknowledged
widely until the first neuromarketing conference, which took place in 2004.

The authors of the article further refer to (Renvoise & Morin, 2007), according to whom, the brain is
categorised into three distinct parts that act as separate organs with different cellular structures and
different functions. These parts communicate and constantly try to influence each other, and each one has
a specialized function. The new brain thinks as it processes rational data. The middle brain feels as it
processes emotions and feelings. The old brain decides as it takes into account the input from the other
two parts. However, it is the old brain that is the actual trigger of decision. The old brain also responds to
six very specific stimuli, which gives the key to unlocking the decision-making process. 1) Self-
Centered; 2) Contrast; 3) Tangible Input; 4) The Beginning And The End; 5) Visual Stimuli and 6)
Emotion.

There are a number of brain-imaging technologies used in neuromarketing studies: fMRI (functional
magnetic resonance imaging), QEEG (quantitative electroencephalography), and MEG
(magnetoencephalography). All three imaging techniques are non-invasive and therefore can be used
safely for marketing research purposes.

On the basis of research conducted, the authors further add that fMRI is most popular amongst marketing
companies, since it utilizes mainstream technology to produce clear images of real- time brain activity
(Bridger & Lewis, 2005).

For neuromarketing, scientists use fMRI to observe areas of the brain that respond to consumer-based
stimuli, such as particular brands, price ranges, and even taste preferences (Bridger & Lewis, 2005).
Based on the research gathered and analysed by the authors of this article, they state that people make
decisions based on cursory judgments of whether they will gain or lose money when purchasing a
product. The authors further add that when tracking brain functions, neuroscientists generally use either
electroencephalography (EEG) or functional magnetic resonance imaging (fMRI) technology.

The authors conclude the article by stating that the increasing body of knowledge in neuroscience and
neuromarketing, that are supported by continuous studies and experiments conducted throughout the
world, have propelled the commercial application of neuroscience in establishing valuable solutions for
marketing, which in turn establishes a strong foundation for neuromarketing. Professionals use
neuroscience to select individuals, build creative teams and improve creative potential by providing neuro
prototyping solutions. Neuroscience is applied for creative ideation and for prototype development.
Neuroscience tools and theory are applied to measure and understand consumers’ responses to the new
solutions. Virtual reality (VR) and augmented reality (AR) techniques of neuromarketing are applied for
product testing to assess the consumer’s perception prior to launch of products on commercial basis. High
tracking, heat map techniques of neuroscience are used to test advertising success across different media
and channels. This article reinforces and emphasis the wide application of neuromarketing and its
enormous scope and potential in the field of marketing activities of businesses.
Analysis

What is Neuromarketing?

The field of neuromarketing (sometimes known as consumer neuroscience) studies the brain to predict and
potentially even manipulate consumer behaviour and decision-making (Harrell, 2019).

Neuromarketing is a new field of marketing that studies the consumer’s response to marketing stimuli.
Neuromarketing is the application of neuroscience to marketing. Neuromarketing includes the direct use
of brain imaging, scanning, biometrics, or other brain activity measurement technology to measure a
subject’s response to specific products, packaging, advertising, or other marketing elements. In some
cases, the brain responses measured by these techniques may not be consciously perceived by the
subject; hence, this data may be more revealing than self- reporting on surveys, in focus groups, etc.
(Kumar & Singh, 2015).

Neuromarketing is the application of neuroscientific methods to analyze and understand human

behavioural aspects in relation to markets and market exchanges (Lee, Brodrick, & Chamberlain, 2007).

Neuromarketing is used improve and influence branding, product design and innovation, advertising
effectiveness, shopper decision-making, online experiences, and entertainment effectiveness (Lindstorm,
2010).

Brain Imaging Technologies in Neuroscience Applied in Neuromarketing

The contributions of neuroscience technologies such as, functional magnetic resonance imaging (fMRI),
electroencephalography (EEG), and magnetoencephalography (MEG) that monitor neural responses can show
consumers’ reactions that remains hidden to marketers as well as the consumers themselves.

Cognizing the positive or negative reactions that consumers have toward sensory stimuli such as colors,
sounds, shapes, etc., can help product designers and marketers modify and create designs and communication
strategies to impact consumers more effectively.

Neuromarketing and neuroscience technologies have been discussed in theory for decades, and testing in these
fields has been taking place since mid 2000s.

Marketers and researchers have tested the effects of branding with big name brands such as Coca-Cola, Pepsi,
and Apple, all with the use of neuroscience technologies like fMRI and EEG.

fMRI - The most popular brain imaging method adopted in the neuromarketing field is the functional
Magnetic Resonance Image (fMRI), a technique that returns a sequence of images of the cerebral activity
by means of the measure of the cerebral blood flow (Vecchiato, et al., 2011). Participants lie in a bed and
with their heads surrounded by a scanner that tracks the variations in blood oxygenation in the brain,
which are correlated to neuronal activity. Although such as images are “static”, that is, they are related to
around ten seconds activity, they have a high-spatial resolution that no other neuroimaging method can
offer. The more active a brain area is, the more oxygen it requires. These computer images are what
researchers use to identify the parts of the brain being utilized. The key element for a marketing
researcher to understand is the contrast of the BOLD signal measured by the fMRI. BOLD stands for
Blood Oxygen Level Dependant (Morin, 2011).

To expand their market share among women in 2008, Frito-Lay conducted research through the use of
fMRI, and that research revealed that the shiny packaging of their potato chips triggered the anterior
cingulate cortex of the brain, which is associated with feelings of guilt and shame. This insight led to
redesigning the packaging of the product from a shiny finish to a matte finish, which increased sales.

EEG - Electroencephalography (EEG) measures the electrical pulses created when a neuron fires. Since
there are billions of neurons in the brain, their activity combines to produce electrical potentials so large
the activity can be detected at the surface of the skull. It fits like a cap of electrodes around the head and
is therefore far more portable and inexpensive than an fMRI. The electrodes are disk-shaped, about half
the size of a dime, and are taped to the skull where they are able to detect electrical signals from the entire
head as well as skin, muscles, blood, and eyes (Pinel, 2003).

EEG provides a deeper understanding of the cognitive processes and the underlying emotional
mechanisms that help explain consumers' behaviour and can overcome the biases inherent in self-reports,
which are mainly used in marketing research. Within the neuromarketing field, previous studies have
exploited, in particular, the potential of the functional meaning of frequency bands to assess and interpret
brain responses to advertising, brands, and marketing stimuli (Vecchiato, et al., 2011).

To persuade customers to opt for its payment services, PayPal developed advertising that pitched their
online services as fast, convenient and easy. Using EEGs to evaluate brain waves of people watching their
commercials, PayPal learned that speed of service is more enticing than security and safety of service,
which had been the theme of their previous advertisments.

MEG - Magnetoencephalography (MEG) is the technique based on the expansion and mapping of the
magnetic field created through neural activities, electrochemical signals between neurons. Similar to
electroencephalography, magnetoencephalography has excellent temporal resolution; however, its spatial
resolution, while not ideal for measuring subcortical areas and deeper areas in the brain, is superior to that
of EEG (Morin, 2011). In contrast to EEG, when conducting MEG research, individuals use
hypersensitive sensors to measure the electromagnetic field without contact with the scalp. The cost of the
acquisition of the necessary equipment and of the magnetoencephalography session is very high, which
contributes to the greater popularity of EEG and fMRI than MEG.
MEG was used for research in early 2000s to measure the neuronal correlates of decision-making at the
point of purchase (Amber, Braeutigame, Rose, Stins, & Swithenby, 2004). The data obtained from
subjects selecting products on a virtual (video) supermarket visit suggested that such choice processes can
be seen as two distinct halves. The first half appears to involve processes associated with problem
recognition and memory recall, and here female brain responses differ most clearly from male. The
second period concerns the choice itself, where a different pattern of brain activity is evoked when a
relatively familiar brand is chosen compared with selecting a less well-known product.

Figure 1: Differences and Similarities of fMRI, EEG and MEG

Compiled from Sources: (Pollard & Lystad, 2008) (Soltanlu, Sitnikova, Nuerk, & Dresler, 2018)

Future of Neuroscience in Neuromarketing

The non-invasive neuroimaging techniques (EEG, MEG, fMRI, etc.) cannot capture the brain’s activity to
individual neuronal level; hence for a nuanced understanding of the complex cognitive processes
happening in the consumer’s brain, highly advanced methods of investigation are required. Some projects
such as the European Union’s Human Brain Project and the BRAIN (Brain Research through Advancing
Innovative Neuro technologies) initiative, promise breakthrough advancements in fundamental
neuroscience which would help consumer neuroscientist to fill current methodological gaps in consumer
neuroscience research (Agarwal & Dutta, 2015).
Although these research initiatives are not directly focused on addressing neuromarketing or consumer
neuroscience queries, the knowledge of human brain anatomy and enhanced understanding of the
cognitive abilities, which will be available to the scientists from other research areas including the
consumer neuroscientists would help them to generate deeper insights into the consumer behaviour.

Limitations of Neuromarketing

• Absence of credibility and trustworthiness of the information (Fugate, 2007).

• Very few publications done by neuromarketing companies and academics are currently available
(Eser, Isin, & Tolon, 2011).
• The moment and the situation of the marketing stimuli received by an individual can also result in
differential processing of the stimuli (Fugate, 2007).
• The concept of emotions and their association with certain brain areas is a debatable concept (Butler,
2008).
• A key limitation is the high cost and time factor - Only the largest early-adopter companies with the
deepest pockets have been willing to foot the bill for intensive neuromarketing as it is sold today, and
their results have not convinced their more mainstream competitors that matching investments are
required to remain competitive (De Souza, 2018).
• Connecting to Behavior and Real Business Outcomes- Neuromarketing studies might pinpoint with
great precision that attention is happening here, or emotional engagement is peaking there, but buyers
are often left to figure out for themselves what it all means. What is a “good” level of each of these
variables? How do these measures help us explain and predict consumers’ later choices and actions?
These questions have not been answered satisfactorily for most mainstream research buyers (De
Souza, 2018).

Benefits of Neuromarketing

• Companies benefit from neuromarketing as it gives a better picture of the consumers’ brain
functioning and helps in deciphering their decision making process.
• Using neuromarketing methods can lead to identifying effective consumer groups and segments.
These segments can be demarcated on the basis of demographics. This leads to better judgment of
consumer behaviour and target specific markets (Solomon, 2018).
• Tools of neuromarketing can identify stimuli and cues that reveal consumer behaviour not detected
by visual observation (Venkataram, Clithero, Fitzsimons, & Huettel, 2012).
• It helps to understand the overall shopping experience of the customer, from when he/she enters the
store to when they leave, apart from the neural response at the time of purchase (Solomon, 2018).
• Neuromarketing methods can help identify potential improvements in product design, brand creation,
effective advertisements, etc.
Conclusion

The article covered in this paper gives an overview of the meaning and concept of neuromarketing along
with the various brain imaging tools used in the field. It synthesizes information that helps one in
understanding how neuroscience and the advancing technologies in that field can be used in the marketing
sphere to help marketers and product designers improve and create designs and messaging that would
attract consumers and encourage a positive reaction from them. This can be implemented in processes
involved before, during and after purchasing a product.

Neuromarketing tools are used to gauge the reactions of consumers to various stimuli that the brand
presents them with. Research and development on this basis can help brands create a more positive image
of themselves, which will result in more sales and brand loyalty. Brain imaging technologies are a few
among the many neuromarketing tools (such as eye tracking, biometrics, etc.) that can be used for market
research. Neuromarketing is a recent development in the marketing world with a great scope of
expansion. Its acceptance, though late, has lead to a great many revelations when it comes to recognising
and understanding consumers’ latent wants. Brands now adopt new and distinct strategies based on the
studies conducted in this field. With further developments in the field of neuroscience and its
accompanying technologies, the field of neuromarketing will also continue to expand.

Neuromarketing offers exciting opportunities and provides new avenues to explore in the field of
marketing. Having an in-depth knowledge and understanding of consumers’ latent wants than ever before
can help a company establish a leading position in their respective industry. However, this is only
possible if they continue to conduct neuromarketing research and studies since consumers’ wants are
constantly changing. These technologies can help companies keep up with those changing wants and
equip them with the right tools and strategies to target their market segment more efficiently to produce
positive results in all their selling related activities.
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