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Neuromarketing

Sometimes when we go shopping, we might notice an item or two with new packaging. Why do you think the company decided to change the packaging? How could they have been sure that it would result positively? This is where neuromarketing comes into play. Neuromarketing is one of the most reliable market research methods practiced by businesses to ensure success in their markets. Curious to know how? Read ahead to understand all about neuromarketing in businesses.

Neuromarketing Definition

Marketing as we know it is a lot more complex than before. Businesses get into the minds of the customers to analyze and understand them. This helps companies understand their customer's needs better.

Neuromarketing is the practice of analyzing a customer's psychological and neural signals to draw insights about their preferences and understand their decision-making process.

Neuromarketing is performed using various techniques that help detect psychological and neural signals from customers or the selected sample. Information collected using neuromarketing techniques develops better advertising campaigns, more innovative product designs, and intelligent pricing strategies. Neuromarketing helps marketers reduce the degree of uncertainty, as information obtained through this method is more reliable than other methods, such as surveys or questionnaires. This improves the company's chances of success in a market.

Fundamentals of Neuromarketing

The fundamentals of neuromarketing consist of three main areas:

  1. Marketing,

  2. Neuroscience,

  3. Psychology.

1. Marketing - this area focuses on promoting a product and increasing its awareness among people. Advertising is a critical department of a company that involves researching, promoting, selling, and distributing the brand's products and services. It is vital to attract and retain customers and to maintain a loyal customer base. The marketing department analyzes the market and its wants and needs so that the company can be successful and accepted by the customers.

2. Neuroscience - this is the scientific study of the nervous system and its functions. Neuroscientists study the brain and its activities using cellular and molecular biology, physiology, cognition, and other disciplines. The neural connections in the brain are connected to sensory input and motor output. As a result, neuroscience can analyze the neural signals in the brain when an individual is exposed to someone or something. This is the aspect of neuroscience that helps businesses in neuromarketing.

3. Psychology - the scientific study focusing on the mind and behavior is known as psychology. Psychology helps us understand our mental processes and functions. Psychology help businesses understand consumer decision processes and their preferences.

Together, marketing, neuroscience, and psychology can help businesses develop better marketing tactics by understanding their customers better.

Neuromarketing Techniques

How can businesses analyze customers' neural signals to obtain information that is relevant to them? Businesses use six main neuromarketing techniques, and they are:

1. Biometrics - biometrics involves measurements of an individual that helps to distinguish themselves from others. Biometrics in neuromarketing helps identify a customer's engagement and reaction to a product or advertisement. Their heart rate, skin respiration patterns, and conductance indicate positive and negative responses.

2. Electroencephalogram (EEG) - this is essentially the process of recording brain activity by placing sensors on the participant's scalp. These sensors can transmit the signals produced by the brain onto a monitor. The signals on the monitor are then analyzed to understand whether the customer favors the products. This is a relatively expensive technique used in neuromarketing.

3. Eye-tracking - as the name suggests, this technique focuses on where the customer is looking. It helps businesses strategically design product packaging and design. This method can also easily detect prevalent colors and fonts that capture the audience's attention. Using the eye-tracking technique, brands can also determine how easily recognizable they are among customers.

As eye-tracking cannot evaluate the participant's emotions, it is combined with biometrics to yield the best results.

4. Facial coding - this technique will help in decoding customers' emotions when they are presented with a product or shown an advertisement. This technique can also help develop better marketing communications if the original product or advertisement cannot revoke the intended emotions.

5. Functional Magnetic Resonance Imaging (fMRI) - fMRI is used to detect the blood flow in the brain during high neural activity. It can catch minute changes in the blood flow of the active part of the brain. These results are used to improve advertisements and prices.

6. Pupillometry - this neuromarketing technique analyses the pupil of the participant to draw conclusions. Whether the pupils are dilated or not, researchers can make observations and conclusions. Again, this technique is used to optimize products, advertisements, and prices.

These methods help businesses attain more detailed and reliable data used for the overall betterment of the company.

The Pros and Cons of Neuromarketing

Neuromarketing has become pivotal in the field of marketing. Despite its crucial contributions, neuromarketing has pros and cons, which we explain below.

The Pros and Cons of Neuromarketing: Pros

1. Identifying the blind spots - neuromarketing helps a business gain detailed and complete information regarding various aspects of the customer's reaction. Traditional marketing research techniques cannot help in understanding the psychological and neural signals of the participant. This method can help identify the prevailing gaps hindering the business's success.

2. Better reliability - the information obtained through neuromarketing techniques is very reliable as it is based on automatic reactions that participants cannot fake. Customers cannot lie about their preferences or emotions using this technique. Neuromarketing techniques interpret and analyze the subconscious signal of humans, thereby significantly increasing the reliability of the data.

3. Enhancing content - marketers can use the reactions obtained through neuromarketing techniques to understand which elements are working for the customer and which are not. If certain features result in adverse reactions, marketers can replace those elements with something more appealing to the customers.

4. Better value for money - although these techniques are expensive in comparison to traditional market research

methods, they provide better value for money as they offer better and more reliable information that can ensure, or at least tremendously increase, the chances of a business's success in the market.

The Pros and Cons of Neuromarketing: Cons

1. Requires highly skilled professionals - this field requires highly skilled professionals to be able to analyze the results precisely. The more knowledge the professional has, the better, and more information can be analyzed.

2. Expensive equipment - although they provide a good value for money, the equipment is expensive as it uses advanced technology widely used for various industries.

3. Invades privacy - commonly, people presume that neuromarketing invades their privacy. They feel they have no control over how much information they share.

Neuromarketing Examples

After understanding how neuromarketing works, let's look at a few examples to understand how these techniques are practiced. Below are four examples of companies using neuromarketing:

  • Hyundai,
  • Coca-Cola,
  • Frito-Lay,
  • National Cancer Institute.

Neuromarketing Examples: Hyundai

This car manufacturing company asked its sample set, which included men and women, to look at different vehicle parts. The neural signals were then monitored to see which parts appealed to which gender. This way, the company can introduce changes to parts that were unappealing and maintain designs that appeal to the sample. This practice will help the business secure a better chance at capturing the market's attention and selling more cars. As designing and launching a new car is expensive, knowing the customers and their preferences can help the business make fewer mistakes.1

Neuromarketing Example StudySmarterFig. 2 - Hyundai Neuromarketing Techniques

Neuromarketing Examples: Coca-cola

Coca-cola asks its participants to view their advertisements and analyzes their neural signals. Based on the signals, the company identifies elements of the ad that the viewers find engaging or captivating. Researchers also monitor their emotions to understand how they feel about the ad. Neuromarketing helps the company better script its advertisements, which will result in higher sales.2

Neuromarketing Example StudySmarterFig. 3 - Coca-Cola Neuromarketing

Neuromarketing Examples: Frito-Lay

Frito-Lay, the snacks manufacturing company, uses neuroimaging to enhance its packaging. Researchers showed customers various packaging options and recorded their reactions. These reactions were either positive, negative, or neutral. Marketers also asked participants about the package's text, color, and font. Customers responded positively to the matte packaging but were not attracted to the shiny packaging formerly used on the market. As a result, Frito-Lay changed its packaging to a matte package to attract more customers.3

Neuromarketing Examples: National Cancer Institute

The National Cancer Institute made use of the fMRI technique. They used the method to compare advertisement campaigns on the institute's hotline. Researchers showed the campaign options to participants before they were released to the public. The National Cancer Institute found the most effective advertising campaign using the fMRI technique. The campaign option that generated the highest brain activity was selected. This campaign generated the highest number of calls to the campaign.4

Neuromarketing - Key takeaways

  • Neuromarketing is the practice of analyzing a customer's psychological and neural signals to draw insights into their preferences and understand their decision-making process.
  • The fundamentals or the basics of neuromarketing consists of three main areas:
    1. Marketing,
    2. Neuroscience,
    3. Psychology.
  • Biometrics, electroencephalogram, eye-tracking, facial coding, functional Magnetic Resonance Imaging, and pupillometry are the six neuromarketing techniques.
  • Neuromarketing's advantages are identifying blind spots, better reliability, enhancing content, and better value for money.
  • Requiring highly skilled professionals, expensive equipment, and invasion of privacy are the disadvantages of neuromarketing.

References

  1. Laurie Burkitt. Neuromarketing: Companies Use Neuroscience for Consumer Insights. 29 October 2009. https://www.forbes.com/forbes/2009/1116/marketing-hyundai-neurofocus-brain-waves-battle-for-the-brain.html
  2. Roger Dooley. Neuromarketing: For Coke, It's the Real Thing. 7 March 2013. https://www.forbes.com/sites/rogerdooley/2013/03/07/coke-neuromarketing/
  3. Laurie Burkitt. Neuromarketing: Companies Use Neuroscience for Consumer Insights. 29 October 2009. https://www.forbes.com/forbes/2009/1116/marketing-hyundai-neurofocus-brain-waves-battle-for-the-brain.html
  4. Bryn Farnsworth. 15 Powerful Examples of Neuromarketing in Action. 5 March 2019. https://imotions.com/blog/neuromarketing-examples/
  5. Fig. 2 - Hyundai Neuromarketing Techniques (https://www.pexels.com/de-de/foto/schwarzer-hyundai-suv-1519192/) by Kelvin Valerio (https://www.pexels.com/de-de/@kelvin809/) is licensed by CC (https://www.pexels.com/de-de/lizenz/)
  6. Fig. 3 - Coca-Cola Neuromarketing (https://www.pexels.com/de-de/foto/coca-cola-dose-auf-schwarzer-oberflache-3819969/) by Olena Bohovyk (https://www.pexels.com/de-de/@olenkasergienko/) is licensed by CC (https://www.pexels.com/de-de/lizenz/)

Frequently Asked Questions about Neuromarketing

Neuromarketing is the practice of analyzing a customer's psychological and neural signals to draw insights into their preferences and understand their decision-making process.  

Neuromarketing, performed using various techniques, helps to detect psychological and neural signals from customers or the selected sample. Information collected using neuromarketing techniques is used to develop better advertising campaigns, smarter product designs, and intelligent pricing strategies. It also helps in better understanding customers and their preferences. Neuromarketing helps marketers reduce the degree of uncertainty, as information obtained through this method is more reliable than other traditional methods. This improves the company's chances of success in a market. 

Neuromarketing helps a business gain detailed and complete information regarding various aspects of the customer's reaction. Traditional marketing research techniques cannot help in understanding the psychological and neural signals of the participant. Neuromarketing also helps obtain reliable information, which businesses use to enhance their products and features. Neuromarketing can improve a company's chances of success in the market.

Roger Dooley is known as the father of neuromarketing.

Neuromarketing is better at delivering genuine results, as the participants cannot lie. While this is a better option for companies, customers or participants might feel that their privacy is being invaded as they are not in control of the information they provide.

The fundamentals of neuroscience include marketing, psychology, and neuroscience, whereas consumer neuromarketing consists of consumer research and modern neuroscience.

Final Neuromarketing Quiz

Question

Define neuromarketing.

Show answer

Answer

Neuromarketing is the practice of analyzing a customer's psychological and neural signals to draw insights into their preferences and understand their decision-making process. 

Show question

Question

The three fundamentals of neuromarketing are marketing, _____________, and _____________. 

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Answer

neuroscience, and psychology

Show question

Question

___________ is the scientific study of the nervous system and its functions. 

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Answer

Psychology 

Show question

Question

Psychology is the scientific study focusing on the

Show answer

Answer

mind and behaviour

Show question

Question

Biometrics, _____________, eye-tracking, __________, ________________, and pupillometry are the six techniques of neuromarketing. 

Show answer

Answer

Biometrics, electroencephalogram, eye-tracking, facial coding, functional Magnetic Resonance Imaging, and pupillometry are the six techniques of neuromarketing. 

Show question

Question

___________ involves measurements of an individual that helps distinguish themselves from others.

Show answer

Answer

Biometrics

Show question

Question

What are a few biometric indicators used in neuromarketing?

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Answer

Heart rate, skin respiration patterns, and conductance.

Show question

Question

Expand EEG

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Answer

Electroencephalogram

Show question

Question

What is EEG?

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Answer

This is essentially the process of recording brain activity by placing sensors on the scalp of the participant. 

Show question

Question

Identifying colors and fonts that capture customers' attention can be easily detected using which method?

Show answer

Answer

Eye-tracking

Show question

Question

This technique helps in decoding customers' emotions when they are presented with a product or shown an advertisement.

Show answer

Answer

Eye-tracking

Show question

Question

fMRI stands for 

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Answer

functional Magnetic Resonance Imaging

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Question

Depending on whether the pupils are dilated or not, observations and conclusions can be made about the participant's reaction using which technique?

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Answer

Pupillometry

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Question

What are the pros of neuromarketing?

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Answer

Identifying blind spots, better reliability, enhancing content, and better value for money

Show question

Question

_____________, expensive equipment, and ____________ are the disadvantages of neuromarketing.

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Answer

Requiring highly skilled professionals, expensive equipment, and invasion of privacy are the disadvantages of neuromarketing.

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