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Neuromarketing is a commercial marketing communication field that applies neuropsychology to marketing research, studying consumers' sensorimotor, cognitive, and affective response to marketing stimuli. Neuromarketing seeks to understand the rationale behind how consumers make purchasing decisions and their responses to marketing stimuli in order to apply those learnings in the marketing realm. The potential benefits to marketers include more efficient and effective marketing campaigns and strategies, fewer product and campaign failures, and ultimately the manipulation of the real needs and wants of people to suit the needs and wants of marketing interests.
Certain companies, particularly those with large-scale ambitions to predict consumer behaviour, have invested in their own laboratories, science personnel or partnerships with academia.
Neuromarketing is a recent emerging disciplinary field in marketing. It also borrows similar tools and methodologies from other fields such as neuroscience and psychology. The term "neuromarketing" was introduced in 2002 by Dutch marketing professor Ale Smidts, but research in the field can be found earlier in 1990s.
Gerald Zaltman is associated with one of the first experiments in neuromarketing. In the late 1990s, both Gemma Calvert (UK) and Gerald Zaltman (USA) had established consumer neuroscience companies. Marketing professor Gerald Zaltman patented the Zaltman metaphor elicitation technique (ZMET) in the 1990s with the purpose to sell advertising. ZMET explored the human subconscious with specially selected sets of images that cause a positive emotional response and activate hidden images, metaphors stimulating the purchase. Graphical collages were constructed on the base of detected images, which lays in the basis for commercials. ZMET quickly gained popularity among hundreds of major companies-customers including Coca-Cola, General Motors, Nestle, Procter & Gamble. Zaltman and his associates were employed by those organizations to investigate brain scans and observe neural activity of consumers. In 1999, he began to use the fMRI to show correlations between consumer brain activity and marketing stimuli. Zaltman's marketing research methods enhanced psychological research used in marketing tools.
The term 'neuromarketing' was first published in 2002 in an article by BrightHouse, a marketing firm based in Atlanta. BrightHouse sponsored neurophysiologic (nervous system functioning) research into marketing divisions; they constructed a business unit that used fMRI scans for market research purposes. The firm rapidly attracted criticism and disapproval concerning conflict of interest with Emory University, who helped establish the division. This enterprise disappeared from public attention and now works with over 500 clients and consumer-product businesses. The "Pepsi Challenge", a blind taste test of Coca-Cola and Pepsi, was a study conducted in 2004 that brought attention to neuromarketing. In 2006, Dr. Carl Marci (USA) founded Innerscope Research that focused on Neuromarketing research. Innerscope research was later acquired by the Nielsen Corporation in May 2015 and renamed Nielsen Consumer Neuroscience. Unilever's Consumer Research Exploratory Fund (CREF) too had been publishing white papers on the potential applications of neuromarketing.
Collecting information on how the target market would respond to a product is the first step involved for organisations advertising a product. Traditional methods of marketing research include focus groups or sizeable surveys used to evaluate features of the proposed product. Some of the conventional research techniques used in this type of study are the measurement of cardiac electrical activity (ECG) and electrical activity of the dermis (AED) of subjects. However, it results in an incompatibility between market research findings and the actual behavior exhibited by the target market at the point of purchase. Human decision-making is both a conscious and non-conscious process in the brain, and while this method of research succeeded in gathering explicit (or conscious) emotions, it failed to gain the consumer's implicit (or unconscious) emotions. Non-conscious information has a large influence in the decision-making process.
A greater understanding of human cognition and behaviour has led to the integration of biological and social sciences: Neuromarketing, a recent method utilized to understand consumers. The concept of neuromarketing combines marketing, psychology and neuroscience. Research is conducted around the implicit motivations to understand consumer decisions by non-invasive psychoanalysis methods of measuring brain activity. These include electroencephalography (EEG), magnetoencephalography (MEG) and functional magnetic resonance imaging (fMRI), eye tracking, electrodermal response measures and other neuro-technologies. Researchers investigate and learn how consumers respond and feel when presented with products and/or related stimuli. Observations can then be correlated with a participants surmised emotions and social interactions. Market researchers use this information to determine if products or advertisements stimulate responses in the brain linked with positive emotions. The concept of neuromarketing was therefore introduced to study relevant human emotions and behavioral patterns associated with products, ads and decision-making. Neuromarketing provides models of consumer behavior and can also be used to re-interpret extant research. It provides theorization of emotional aspects of consumer behavior.
Consumer behavior investigates both an individuals conscious choices and underlying brain activity levels. For example, neural processes observed provide a more accurate prediction of population-level data in comparison to self-reported data. Neuromarketing can measure the impacts of branding and market strategies before applying them to target consumers. Marketers can then advertise the product so that it communicates and meets the needs of potential consumers with different predictions of choice.
Neuromarketing is also used with Big Data in understanding modern-day advertising channels such as social networking, search behavior and website engagement patterns.. Agencies like Darling help organizations use this kind of neuroscience in their marketing to better communicate with consumers at the subconscious level.
Segmentation and positioning
Based on the proposed neuromarketing concept of decision processing, consumer buying decisions rely on either System 1 or System 2 processing or Plato's two horses and a chariot. System 1 thinking was intuitive, unconscious, effortless, fast and emotional. In contrast, decisions driven by System 2 were deliberate, conscious reasoning, slow and effortful. Zurawicki that buying decisions are driven by one's mood and emotions; concluding that compulsive and or spontaneous purchases were driven by System 1.
Marketers use segmentation and positioning to divide the market and choose the segments they will use to position themselves to strategically target their ad. Using the neurological differences between genders can alter target market and segment. Research has shown that structural differences between the male and female brain has strong influence on their respective decisions as consumers.
Young people represent a high share of buyers in many industries including the electronics market and fashion industry. Due to the development of brain maturation, adolescents are subject to strong emotional reaction, although can have difficulty identifying the emotional expression of others. Marketers can use this neural information to target adolescents with shorter, attention-grabbing messages, and ones that can influence their emotional expressions clearly. Teenagers rely on more 'gut feeling' and don't fully think through consequences, so are mainly consumers of products based on excitement and impulse. Due to this behavioural quality, segmenting the market to target adolescent's can be beneficial to marketers that advertise with an emotional, quick response approach.
Many of the claims of companies that sell neuromarketing services make are not based on actual neuroscience and have been debunked as hype, and have been described as part of a fad of pseudoscientific "neuroscientism" in popular culture. Joseph Turow, a communications professor at the University of Pennsylvania, dismisses neuromarketing as another reincarnation of gimmicky attempts for advertisers to find non-traditional approaches toward gathering consumer opinion. He is quoted in saying, "There has always been a holy grail in advertising to try to reach people in a hypodermic way. Major corporations and research firms are jumping on the neuromarketing bandwagon, because they are desperate for any novel technique to help them break through all the marketing clutter. 'It's as much about the nature of the industry and the anxiety roiling through the system as it is about anything else."
Some consumer advocate organizations, such as the Center for Digital Democracy, have criticized neuromarketing's potentially invasive technology. Neuromarketing is a controversial field that uses medical technologies to build successful marketing campaigns according to Gary Ruskin, an Executive Director of Commercial Alert. The issue in privacy comes from consumers being unaware of the purpose of the research, how the results will be used, or haven't even given consent in the first place. Some are even afraid that neuromarketers will have the ability to read a consumer's mind and put them at "risk of discrimination, stigmatization, and coercion."
However, many industry associations across the world have taken measures to address the issue around privacy. For example, The Neuromarketing Science & Business Association has established general principles and ethical guidelines surrounding best practices for researchers to adhere to such as:
- Do not bring any kind of prejudice in research methodology, results and participants
- Do not take advantage of participants lack of awareness in the field
- Communicate what participants should expect during research (methodologies)
- Be honest with results
- Participant data should remain confidential
- Reveal data collection techniques to participants
- Do not coerce participants to join a research and allow them to leave when they want
The above is not a full list of what researchers should abide by, but it mitigates the risk of researchers breaching a participant's privacy if they want their research to be academically recognized.
Jeff Chester, the executive director of the Center for Digital Democracy, claims that neuromarketing is “having an effect on individuals that individuals are not informed about." Further, he claims that though there has not historically been regulation on adult advertising due to adults having defense mechanisms to discern what is true and untrue, regulations should now be placed: "if the advertising is now purposely designed to bypass those rational defenses ... protecting advertising speech in the marketplace has to be questioned."
Advocates nonetheless argue that society benefits from neuromarketing innovations. German neurobiologist Kai-Markus Mueller promotes a neuromarketing variant, "neuropricing", that uses data from brain scans to help companies identify the highest prices consumers will pay. Müller says "everyone wins with this method," because brain-tested prices enable firms to increase profits, thus increasing prospects for survival during economic recession.
Neuromarketing isn't a replacement of traditional marketing methods but, rather, a field to be used alongside traditional methods to gain a clearer picture of a consumer's profile. Neuromarketing provides insights into the implicit decisions of a consumer, but its still important to know the explicit decisions and attractions of consumers.
Neuromarketing is also limited by the high costs of conducting research. Research requires a variety of technologies such as fMRI, EEG, biometrics, facial coding, and eye-tracking to learn how consumers respond and feel to stimuli. However, the cost to rent or own these technologies and even then a lab may be needed to operate the aforementioned technologies.
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