Neuromarketing

Many people believe that neuromarketing is bad practice because it influences customers to buy goods and services that they do not need actually.

Neuromarketing is based on a more realistic understanding of how consumers think, neuro marketers believe it is a better approach to doing marketing.

Neuromarketing can reveal how the brain reacts to marketing stimuli in different situations, such as alone or next-to competing products, at different prices in a shop versus online, etc.

It will tell us how our brains interpret these reactions into consumer behaviors and decisions (such as purchasing a product or switching loyalty for a new brand).

Few Popular Neuromarketing Techniques Used by Marketers

Marketers use advanced techniques and tools to increase their revenue. Neuromarketing along with AI technology boost company sales exponentially. Let’s look at a few neuromarketing techniques marketers use in the market.

Decoy Products and Pricing

Do you need to sell more products or services? This is a counterintuitive idea. Offer your customers a comparable, but inferior product or service for about the same price. Although it is unlikely that customers will buy the less appealing products, this could lead to increased sales for what you are selling.

Decoy marketing is all about relativism. Although our brains don’t have the ability to judge absolute values, they can compare benefits and values. Marketers can use decoy products or offers to make another product seem better value if they are proactive.

Dan Ariely, author of Predictably Irrational describes an experiment that used magazine subscriptions. It is simple but deceptive. These offers to subscribe to The Economist were presented to two groups of subjects.

Offer A

$59–Internet only subscription (68 choices)

$125–Internet & print subscription (32 choices)

Predicted Revenue – $8,012

Offer B

$59 – Internet-only subscription (16 choices)

$125–Print-only Subscription (0 choices)

$125–Internet & print subscription (84 choices)

Predicted Revenue -$11 444

This is a surprising result. The offers are identical, except that Offer B includes the print-only subscription.

Despite not one person choosing that attractive offer, it had a dramatic impact. 62 percent more people chose to print the offer combined with the Internet, and the predicted revenue rose 43 percent. The decoy was used to make the combined offer seem more valuable.

Anchors Weigh!

A consumer’s first consideration when evaluating an offer is whether or not it seems fair. The price is too high, and buying pain (activating our brain’s pain center when we pay for a purchase) causes us to feel more pain. How does this value equation work? Anchoring is the answer.

Typically, we keep a price anchor for different products (e.g. $2 for a cup of coffee at the local coffee shop). This anchor price allows us to determine relative value.

It sounds easy enough, but it is not. Anchor prices can be affected by many marketing and environmental stimuli. Marketers should be flexible enough to create creative pricing strategies that are effective to cope with changes.

Marketers know that customers have different expectations regarding the price of a product or product group. It’s a good idea to offer a lower price than usual for a product in that category. It is important to distinguish premium products from cheaper ones if your product is high-priced.

The “Ouch!” to Pay

Neuromarketing research and neuroeconomics have revealed that purchasing something can trigger our brain’s pain center to turn on.

Bundling Minimizes Pain

Because they include multiple items, auto luxury bundles reduce negative activation. Consumers can’t easily relate the price of each component (leather seats or sunroof) to a specific item in the bundle. The consumer is unable to evaluate the fairness of the deal and whether the accessory’s utility is worth the cost.

Fairness Counts

The cost of the offer is not the only factor that can cause “pain.” It is the perception of fairness or unfairness that triggers this reaction. A price too high or other parts of an offer would likely cause the same reaction.

There is no one “fair” price for every item. A cup of Starbucks coffee would be considered fair if it cost more than one bought at a street-side coffee shop. Richard Thaler, an economist, made a famous study that showed that beachgoers would spend nearly twice as much to get a beer at a resort than for the same beverage from a small grocery store.

Credit as Painkiller

Many customers feel that credit card takes away the pain of buying. The purchase is more difficult when cash is pulled from one’s pocket.

This makes sense to us and it is consistent with our real-world behavior. Credit cards reduce pain by moving the cost to a future period, where it can be paid in smaller increments. A credit card allows a consumer to purchase something without having cash.

Cut Choices; Boost Sales

The general belief is that consumers like lots of options for goods and services. The availability of hundreds of different shampoo brands and variations on the supermarket shelves prove it. However, the reality is just the opposite, more options reduce sales.

It seems that the trick is to offer enough options for your product that customers are satisfied, without making them feel overwhelmed or discouraged. It’s clear that increasing the number of choices simply because you want to offer a lot is a bad strategy. However, sales can increase if there are fewer selling options.

Scent Effects

Perception can also be affected by scents. Two pairs of identical Nike sneakers were tested in an experiment. One pair was evaluated in a room that had a floral scent, and the other with no scent. The sneakers in the scented room were rated superior by 84 percent of subjects.

Zaltman says that once a scent has been embedded in the brain of an individual, visual cues and other cues can trigger it to be revived or even “experienced.” A television commercial that shows a pizza being removed from the oven can trigger olfactory reactions in the brain.

Scents have the power to influence behavior and consumer perceptions. One study showed that patrons who were greeted with seawater, orange, peppermint tended to dance longer in nightclubs. The patrons of scented clubs said they had a better experience and enjoyed the music more when surveyed.

In a casino, a test showed that people would gamble 45 percent more if a pleasant smell was used. A second test showed that shampoos with a different fragrance than the performance characteristics performed better. It was rinsed more easily and left hair glossier.

Sometimes we are unaware of how scents affect our brains. Researchers asked female subjects to smell shirts worn by men while they watched either an erotic or neutral movie. Nearly all the women claimed they didn’t smell anything.

However, functional magnetic resonance imaging scans (fMRI), of the brains of the women who smelled the shirts of aroused men showed a completely different result.

Neuromarketing: Manipulation or Conviction

There is a constant debate over whether neuromarketing is conviction or manipulation. They are neutral like all other techniques used by marketers to assist customers in making a purchase decision.

This is a case of manipulation if the company’s goal is to maximize profits by misleading consumers with more effective tools than traditional marketing and advertising.

If the main goal of the company is to anticipate real needs and to respond through innovation to them, to communicate with their clients more creatively, and to be better at their points of sale, does that really mean manipulation?

It is acceptable to use effective techniques to help consumers. Understanding customers’ feelings and deep-seated beliefs in order to better satisfy their needs are completely legal and fine in the marketing environment.

This situation is a reflection of the clear ambition of many firms, while it also represents an intelligent way to create value. This approach is more a way to convince than manipulate.

If a firm uses neuromarketing to approach clients, it must take a number of deontological and ethical precautions. Otherwise, their reputation could be at risk. Before they take any actions in this direction, no matter how admirable their intentions may seem, they should conduct a deontological audit and an ethical audit.

They should also seek out the help of external or internal specialists and provide proper training for their managers to prepare for any questions that may arise internally or externally.

Marketer Using Neuromarketing

Neuromarketing applications are unlimited in marketing. It can provide better solutions to marketing issues than traditional approaches.

Online Shopping

Online shopping is closely related to the in-store shopping experience. Though there are some important differences. In Online shopping, buying and advertising can co-exist without consumers having to wait longer for need satisfaction. Online shopping makes it much easier to activate, pursue, and achieve consumer goals.

Product

Neuromarketing is highly applicable in package design and product innovation. Neuromarketing offers alternative methods to consider when a new idea resonates positively with consumers, and when it generates a huge “Huh?”

Advertising

Neuromarketing is active in the area of advertising research. It has been difficult to understand how advertising works, and what makes a particular ad more effective than another. This mystery can be solved with neuromarketing, which offers new tools and techniques.

Brain science leads to the fascinating idea that ads work best when not paid attention to. It also suggests that positive emotional connections rather than persuasive messaging may be more effective in reinforcing brands and driving sales.

Brand

Neuromarketing is an area where marketers can help you understand brands and branding. Brands are ideas within the mind. They connect with other ideas to create strength. Strong brands are those that create deep associations with related ideas, which keep them at the top of consumers’ minds.

It is because of the strong connections in long-term memories that leading brands are so difficult to replace.

Entertainment

People can identify a brand when they are being entertained than when they are being persuaded by a brand, they still have limited awareness of why one program, movie, or video game is more enjoyable than the other. Brain science offers valuable insights into the story’s interest and what it is that makes it interesting. Neuromarketing can be used to test entertainment programming.

Shopping

Neuromarketing is a great research area for in-store marketing and shopping. Buyers are not fully conscious of marketing stimuli while they are shopping. Shoppers pick up many sensory cues during their shopping experience, but most of these cues aren’t apparent to them.

Shopping outcomes are often determined by the environment, which can sometimes be at the expense of the conscious intent of shoppers. Neuromarketing is a way to test shoppers’ reactions in real and simulated shopping environments.

Measurement of Consumer Responses to Neuromarketing

The most important biometric or physiological measures used in neuromarketing are:

Facial expressions

The human face can register a variety of emotions. Facial expressions can be read into: visible changes (e.g. smiles or frowns), and invisible micro-muscle changes (e.g. contractions of muscles that are associated with positive and/or negative emotions). Emotional valence is a term that describes facial expressions as indicators of positive and negative emotional reactions.

Eye-tracking

It measures eye movements and pupil dilation as you view an object or scene. Neuromarketing uses eye-tracking as an additional tool or as an independent tool. Eye-tracking provides valuable indicators of attention, attraction, and interest by analyzing the direction and speed of changes in gaze patterns.

Electrodermal activity

Perspiration is the amount of sweat that the skin produces. It is usually measured at the fingertips. This signal increases with emotional arousal (stimulation/excitation of the nervous systems). This measure cannot differentiate between positive and negative emotional valences.

Heart rate and respiration

It measures the beat speed of the heart as well as how fast and deep a person breathes. The heart rate slows temporarily when the attention is increased. Rapid and deep breathing are associated with excitement. While shallow breathing can be a sign of anxiety, concentration, tension, fear, panic.

Response time

Nonconscious brain processes can be seen in behavior by interfering or facilitating the speed of responses to word comparisons and visual choices. The ability to measure the strength of associations between concepts using response-time measures is easy and straightforward. Neuromarketers have successfully used them in product and package testing.

Positive Aspects of Neuromarketing

Successful integration of neuromarketing in the working environment provides benefits not only to marketers but to customers, and to whole communities.

Use neuromarketing to educate and inform

The public sector can use neuromarketing to create more effective behavior change programs and give consumers unprecedented insight into their decision-making process. Consumers can use it to understand their decision-making processes.

Behavioral economics provides powerful tools to understand and prevent economic crises and deal with them if they cannot be prevented. Executives in both the public and private sectors are open to behavioral economics, which aims to improve the effectiveness of their decisions.

Adopting this realistic model of decision-making should lead to a positive outcome. Decision biases previously unknown are detected and corrected in financial decision-making, both personal and corporate.

Neuromarketing is based upon brain science findings that enable us to understand how consumers make decisions. These decisions are affected by the environment and internal mental processes.

These insights can be used by marketers to improve the effectiveness of their strategies, and consumers can also use them to make better decisions.

Making life easier for consumers

People are often busy and don’t want to spend too much time on their purchases. They are looking to save time, money, and energy. They want to see a return on their investment. These goals can be met more effectively with neuromarketing.

Brands offer a quick way to navigate the confusing maze of offers and products in many categories. Consumers don’t have to compare dozens of products. Instead, they can choose from a few well-known brands.

Neuromarketing assists marketers in understanding how this process works, and how they can make it more convenient for consumers to use brands as decision-making shortcuts.

Marketing can be seen as a negative thing. However, it is important to remember that marketers are able to make a living by selling products that people love and will buy again. Smart marketer focuses on understanding how different people can be satisfied with different products.

Targeting only a specific market segment helps marketers to specialize in their work and provide better value to customers. Neuromarketing can be used to help identify the needs and wants of consumers, which is often difficult for people to articulate. This can allow product companies to bring new products to market with a greater chance of success.

Recognizing the intangible value

Neuroscience has shown us that all value is relative, and reflected in the brain. It’s not inherent in any external “thing”, but it is subjectively constructed within our minds and viewed in relation to another subjective perception.

Brands carry intangible value. They simplify the process of choosing and convey the promise of a product to customers. A strong brand can bring more value to a consumer experience than a product without branding. It can provide excitement, pleasure, and security that can increase self-worth.

Negative Aspects of Neuromarketing

Marketers can misuse neuromarketing to encourage unhealthy or unsafe products or services to be purchased, as well as to exploit low-income consumers. These practices cannot be encouraged by neuromarketing. However, they can be assisted by neuromarketing just like any other type of market research.

Critics of the Hidden Persuaders raised concerns that marketers used psychological and subliminal tactics to pose a threat to the public. They believed that marketers were manipulators and would use every means to convince consumers to purchase the brands or products they owned.

Marketers want consumers to purchase their products. However, the marketplace is a highly competitive environment in which brands and products that don’t provide real value are quickly replaced by those that do.

Marketing can quickly learn from each other what strategies and executions work and which don’t. In the long run, marketers will fail if they make a false claim and manipulate customers.

We believe that neuromarketing can be a benefit to both consumers and marketers. It will help them spend marketing dollars more efficiently and allow them to live in a world without too much marketing noise.

Reading Our Minds

Some commentators are concerned that neuromarketing, a type of mind-reading technology, can tap into our thoughts and expose them to marketers.

This is a misconception of neuromarketing. However, we want to stress that measuring brain waves with different types of sensors and body signals are not the same thing as reading thoughts.

Neuromarketing technologies can tell with some precision that a person’s physical state is associated with certain mental states. For example, being attentive, feeling motivated, feeling confused, and so on. However, these mental states are not thoughts.

Your brain waves can have a distinct shape when you pay attention to something. However, those brain waves cannot identify what you are paying attention to. Your brain waves may not be telling you what to pay attention to.

You might be listening to a salesperson speak to you. Or you might be looking at the clock to get to your next meeting. Your brain waves don’t distinguish between the two. They only indicate that you are paying attention to something.

Pushing Our Buy Buttons

Neuromarketers can read our minds and manipulate us to buy things we would not otherwise. They can also push buttons in our brains if they can locate the “buy” buttons.

Brains don’t work this way. The brain does not have a “buy button”. Complex behaviors such as purchase decisions can be made over time. They involve both conscious and unconscious processes. They force trade-offs between the anticipation of reward or the pain of paying it.

Neuromarketing can make products and brands more attractive to consumers and increase the effectiveness of marketing. This will lead to higher sales, revenue, profits, and other benefits. This is currently a hypothesis and not a fact.

However, it’s being explored around the globe. Marketers can influence consumers’ actions and decisions more effectively if they have a scientific understanding of neuromarketing principles. This is not because marketers will have more control but because they will be offering products that are more appealing.

We Want Things that aren’t Good for Us

People often do things that are not good for them. It happened before the neuromarketing concept had emerged and will continue in the future.

Neuromarketing may make it harder to resist temptation, but critics who are concerned about this fear have a different point. Products and marketing that are tuned to appeal to the primitive, unconscious parts of our brains will be more difficult to resist. People will have a harder time resisting if they aren’t aware of how they are being influenced. This is a legitimate concern.

Critics are mistaken when they think neuromarketing is a tool that marketers can use to reduce consumers’ ability to resist temptations. Neuromarketing, based on brain science, is not a weapon that can be used to favor one side over the other.

Science is improving our understanding of self-destructive behaviors and the ability to use this knowledge to create practical solutions, not exploit them. It is up to you to decide if you want it.

Neuromarketing doesn’t make us buy or do anything, regardless of whether or not those things are beneficial to us. Marketing is definitely in the business to get us to buy things.

Neuromarketing is certainly in marketing’s business to help marketing. But ultimately, human beings cannot be forced to do anything that they don’t want to do. Ask any marketer: If it was that simple, everyone would be doing it.

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