Transcript Insights – Branding and Neuromarketing

Insights – Branding and
Neuromarketing
Top 10 Global Brands 2013
Position
Brand
Value $million
1
Apple
98.3
2
Google
93.2
3
Coca Cola
79.2
4
IBM
78.8
5
Microsoft
59.5
6
GE
46.9
7
McDonalds
41.9
8
Samsung
39.6
9
Intel
37.2
10
Toyota
35.3
Interbrand 2013 judged on 3 criteria: the financial performance of the branded products or service; the role the brand plays in influencing
consumer choice; the strength the brand has to command a premium price, or secure earnings for the company.
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What the Top 10 have
These companies do not just offer quality commodities
which service a real need and give us a benefit, but they
offer “emotional” products which build relationships and
create real attachment and engagement with their
consumers, by creating a unique “experience”.
…At Apple - consumers don’t just buy computers, they
buy Appleness….”complexity made simple”.
…At McDonalds – we don’t just buy a hamburger, we
buy a “quality, service, cleanliness, and value”
experience.
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“Marketing battles take place in the
mind of a consumer or prospect. That's
where you win. That's where you lose.”
Jack Trout consultant
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Bit of history - Descartes “Error”
Descartes 1637 – I think therefore I am!
Separation of mind and body, rationality and
emotion.
Damasio 1994 – The Iowa Gambling Task –
Emotions guide (or bias) behaviour and
decision-making, and rationality requires
emotional input.
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The Pepsi Challenge 2004
• Two sets of people were tested: one given Coke and Pepsi to
taste without knowing which brand they were drinking.
• The second set were told before tasting which brand they were
drinking.
• First set 50% said they preferred Coke.
• Second set 75% said they preferred Coke - the MRI scan showed
increased activity in the part of the brain associated with positive
value judgements. For the 75% there was also increased brain
activity in parts of the brain associated with high level cognitive
powers and memory.
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Neuromarketing - Marketing through
Science
• Neuromarketing was coined in 2002 by Ale Smidts … only
11 years ago!
• Uses sophisticated tools and techniques (fMRI, EEG, GSR)
to measure changes in activity in parts of the brain and
delves into biometrics to measure changes in physiological
state (heart rate) to learn why consumers make the
decisions they do and what part of the brain is telling them
to do it.
• Fast becoming multi-disciplinary – blend of psychology,
biology, economics, medicine and neuroscience.
• Google has invested in its own laboratories to conduct
company-specific market research.
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Example - fMRI Scans showing activity
Plassmann, H., et al., Branding the brain: A critical review and outlook Journal of Consumer Psychology (2012), doi:10.1016/
j.jcps.2011.11.010
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The many brain systems which have
been implicated in brand preference
Prominent brain areas involved in brand decisions.Abbreviations used:ACC = anterior cingulate cortex; dlPFC = dorsolateral prefrontal
cortex; lOFC = lateral orbitofrontal cortex; mOFC = medial orbitofrontal cortex; NAcc = nucleus accumbens; vmPFC = ventromedial
prefrontal cortex; VS = ventral striatum. Plassmann, H., et al., Branding the brain:
A critical review and outlook Journal of Consumer Psychology (2012), doi:10.1016/ j.jcps.2011.11.010.
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Proponents of Neuromarketing
Company
Application
Proctor and Gamble
Launching of Febreeze room freshener
Motorola
Product design
Delta Airline
To learn what would make a fabulous experience
Hyundai
Changing the exterior appearance of the car
Frito Lay (Pepsi)
To test commercials products and packages and to learn more about appealing
to women
Yahoo
To test pre-release effectiveness of its branding campaign
Paypal/ebay
To test speed and security issues of e-shopping
Microsoft
To know engagement of Xbox users while playing
the game, including their feelings of surprise,
satisfaction and frustration
Buick Motors
In enhancing dealers’ experience with customers - Increased sales from 9% to
40%
Google
To measure effectiveness of YouTube overlays versus
prerolls and found that overlays were much more
effective with subjects
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Case study Campbell soup
2005
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A framework for brand decision making
Value signals important for brand decisions, Plassmann, H., et al., Branding the brain: A critical review and outlook
Journal of Consumer Psychology (2012), doi:10.1016/ j.jcps.2011.11.010.
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Implications from neuromarketing
studies
• Good for service Industries and testing abstract ideas.
• Widened definition of branding and helps us understand the levers
required for brand success.
• Confirmed context and location important for advertisers.
• Confirmed packaging and display positioning important.
• Emotional arousal important throughout but particularly at the
identification stage.
• Staged marketing techniques required.
• Repeated communications necessary to reinforce thinking for both
current and prospective consumers.
• It has huge implications for the marketing industry regarding recruitment
and research.
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Summary
• Verified much of our existing knowledge but it enables us to gain insight
into how consumers operate subconsciously and the emotions they
generate in decision making, offering huge potential for marketers.
• Its potential stems from the fact that it may make it possible to predict
behaviour in a more accurate way than through traditional methods.
• Likely to become a standard tool in the researchers toolkit. Integrating
disciplines and approaches can be no bad thing but currently it is costly
and invasive so limited in reach.
• Whether it will become a substitute for talking to real people remains to
be seen.
• Limitations – small scale studies on individuals, neglects wider effects of
social influence and culture.
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