Neuromarketing | Bachelor Thesis | Annotation:
The objective of this bachelor thesis is to define and explain the modern field of marketing studying consumers buying behaviour using present neuroscience techniques. Firstly, the bachelor thesis brings forward the neuromarketing advantages followed by reflection at ethical risks as well, both terms supported with examples. Moreover, the definitive objective is to determine neuropsychological methods and how is the attained knowledge used for marketing purposes. In overall, the bachelor thesis evaluates the effectiveness of neuromarketing and its future potential.
Keywords: neuromarketing, brain study, neuro-planning, neuroscience, consumer buying behaviour, buying psychology, merchandising, cognitive process, purchase decision making
Neuromarketing - Introduction
In a competitive marketplace, customers and consumers will always be at the forefront. Brands are continuously trying to adapt to their needs. With the diversity of languages, and the way of expression varies with each culture and country, the brain language remains the same and versatile, and therefore imaginatively opens the door to the global world. A valuable insight into the issue of securing customer needs is given by neuromarketing - concerning the emergence of marketing; it is still a new branch of neuroscience, psychology and marketing that studies how the human brain responds to advertising stimuli. It translates findings from brain research into the marketing world in order to gain information about consumer needs and preferences. For example, it identifies what processes are the essence of a customer's buying behaviour. Neuromarketing mainly uses medical technologies as well as knowledge of cognitive psychology and marketing principles. The essence of neuromarketing is the research of the human brain and its neurological processes. Thanks to the given brain functions, we can make decisions. Neuromarketing examines the processes underlying this decision-making.
Researchers can use scientific methods to measure changes in the activity of specific parts of the brain, thus helping to specify customer preferences better because traditional market research and the answer to "Do you like this product?", may not always be accurate. Classical marketing surveys rely on information that researchers consciously provide to the researchers involved in the research. Throughout its existence, these methods have faced a problem that is essential for marketing - the one who says what one thinks it should be said. Is the information found useful for marketing? If we ask someone to buy a product and answer yes, do we have a guarantee that they will buy it in the future? Many examples show that this is not entirely certain. Moreover, these arguments form the basis of neuromarketing. For example, Morin (2011) claims that taking into account the above, neuromarketing appears to be an exciting methodological alternative.
The bachelor thesis split into the theoretical and practical part; unfortunately, the latter cannot be published in its full extent due to an in effect non-disclosure agreement, protecting valuable proprietary neuromarketing data of a large supply chain. The theoretical part will focus on neuromarketing with its benefits, risks, and ethics, and following chapters are devoted to the nervous system of the individual and then also to the psychology of the emotions associated with the consumer's buying behaviour. An essential theoretical part of the thesis is an overview of the types of neurological research used in neuromarketing. One of the goals of this bachelor thesis is to define and explore neuromarketing from the theoretical point of view, in aim to show the problems of this field on case studies from practice.
The aim of this work is also to apply the research of neuromarketing and evaluate its potential contribution to increasing sales performance by examples from practice. This bachelor thesis also partially works with psychological definitions and asks what is possible from the neuropsychological point of view about the consumer and how the brand can learn from it in practice. The goal of any company should not be to maximise profits, but also to develop its market value, and there is currently a "sense" trend behind the brand or idea. The thesis evaluates the effectiveness of selected neuromarketing tools, and the analysis of the media from the neuromarketing point of view, in reflection on their development and potential in the coming years.
1. Neuromarketing - benefits and risks
According to Zurawicki (2010), the roots of neuromarketing research go back more than fifteen years. At that time, Antonio Damasio found that not only rational reasoning, but above all, emotion, is essential to people in making decisions, and reflected in the brain scan. That was the birth of future marketing, which included Magnetic Resonance Imaging (MRI). Medical science has been using MRI since the 1980s, and in comparison to X-ray, MRI is considered harmless. In neuromarketing, so-called fMRI is used, a functional MRI that maps the influx of blood into some regions of the brain in response to stimuli. The basis is the idea that when brain areas processing our 'desires to buy', those areas having an increase in the influx of blood, which is measurable by the fMRI scan. In Zurawicki (2010), "Neuromarketing: Exploring the Brain of the Consumer" states that the decision to buy or not to buy goods or services is made in about 2.5 seconds. First, the visual centre in the cerebral cortex is activated. A fraction of a second later, the brain begins to view the goods from all sides, which activates memory circuits located in the cortex above and behind the left ear. Every marketing expert dreams about the goods making an impression and arouse a shopping desire. The cortex is located in the crown of the head, above and below the right ear. The right part of the brain activated by a 'parietal cortex'. In this way, it is possible to monitor the reaction to different types of goods and then to evaluate them from the records.
Neuromarketing is a combination of science and marketing may tend to sound controversial. The reason is that so far, this discipline is not very well known; however, it is developing fast and growing. Neuromarketing is a type of market research activity that uses methods and new insights into neuroscience and psychology. In essence, neuromarketing solves the same problem as other market surveys may aim to resolve, i.e. how the brand should best represent itself and communicating information and values the right way while generating profit. In consideration of the scientific research to date, neuromarketing is bound to continue helping brands addressing these issues better than other types of research. Some people, however, might argue that neuromarketing is a field of influencing people to buy things - often things they do not need - and that it is a dangerous tool.
Neuromarketing can monitor, demonstrate, and proof consumers reactions, whether it is the colour of the packaging, a sound, or an idea of buying a product that no one else has. It shows that psychology plays a significant role in neuromarketing science. By finding specific rules and formulas of the human mind, we can try to understand the psychology of brands that contribute significantly to the evolution of neuromarketing. However, it is necessary to look at this field with a critical eye, and consider that some popular publications may give a false picture of neuromarketing and make it into marketing that has figured out where the magic sale button is found in within the human brain. Neuromarketing is not a miracle tool for maximising sales of products or services, nor does it guarantee customer loyalty to the brand. Above all, it is a tool through which a brand can gain a greater understanding of consumer's buying behaviour and improve their marketing strategies.
What the recent findings of neuromarketing science research? Thanks to it, we have the opportunity to learn better who our customers are, even at the most basic level, i.e. from the perspective of the brain of the buyer and neurological processes. Neuromarketing can help us to understand better why people want to buy specific products and services, and why they may remain loyal to a particular brand. Neuromarketing captures human behaviour as the manifestation of decision-making, and its research explores how customers feel when shopping and try to understand the human mind in this regard. Genco, Pohlmann and Steidl (2013) argue that neuromarketing consists of at least three essential disciplines that collectively fall into neuroscience, as follows.
• Neurology: A study of the human nervous system, including the brain, its anatomy, function, and the peripheral nervous system it controls. Neurology is essential for understanding the brain states and physiological responses that accompany exposure to brands, products, and marketing materials.
• Behavioural Economics: A study of how people make economic decisions in the real world. Behavioural economics is the most relevant to understanding the situational effects on consumer choice and behaviour.
• Social Psychology: A study of how people think and act (in reality or imagination) in the presence of other people. In recent years, social psychology has focused on the impact of unconscious processes on human activity. The most relevant is to understand how conscious and unconscious brain processes work together to make consumer choices and purchasing behaviour.
1.1 Main areas of use of neuromarketing
Neuromarketing techniques have numerous applications ranging from designing new products to unifying and integrating ways to communicate with their carriers. In a publication on neuromarketing, Pop and Iorga (2012, p. 640) report a recent study by Ariely and Berns (2010), where they present the most appropriate and commonly used areas for neuromarketing research.
Food and drink design
Taste perception is a complex process that requires the integration of numerous sensory stimuli such as taste, perception of structure, smell and appearance. Neuromarketing tools have proven effective in exploring this complicated process and can be used successfully in designing a new product.
New Building Design Architecture
Measuring brain activity generated by images of different parts of a building or integrating imaging discoveries into the building design process. It is made possible using virtual reality, which allows researchers to create a very accurate building or environment simulations and measure the brain activity of a subject passing through virtual corridors using fMRI.
Studies using fMRI performed on subjects looking at a particular scene from the film have shown that the cortical response to triggers is similar to all participants. This experiment brought about the measurement and exploration of film scenes for practice, and according to the evaluation, to include or exclude them from the final version of the film depending on the registered brain reaction. The same approach applies in the music industry, where fMRI studies can predict future listening to the new music segment.
Other areas of applications of neuromarketing research results include; promoting groups of goods (cosmetics, nutrition, food), improving services, designing different categories of advertising materials, websites or managing online stores. Researches can measure or assess, depending on the circumstances, areas affecting emotions, interest, trust, relationship, and loyalty to a product, service, or brand, fear or lack of interest in the product. One of the fundamental questions for retailers is "How do buyers choose their products?" In addition to the apparent rationality of the decision-making process, we know that emotions play an essential role in how and what we choose. Therefore, neuro-marketing is the research between cognitive and emotional knowledge that avoids research into traditional research techniques. (Bratianu, 2011, p. 166).
Research Of The Human Brain And Mind
Renvoise (2013) describes the evolution of human brain development that has undergone several phases. The first was the brainstem and the cerebellum that form the inner and most primitive layer. Above all, the brain stem is the part of the brain that oversees such functions as reproduction, self-preservation, blood circulation, breathing, sleep, and muscle contraction in response to external stimuli. The brain stem is found at the top of the spine at the base of the skull. This layer is called "reptilian brain" because all vertebrates have one from reptiles to mammals. This part of the brain that ultimately controls the actions and decisions. Some of the studies also help us understand how consumers decide to buy using subconscious processes and activities that cannot be analysed using traditional marketing research methods. As a result, a brand can use neuromarketing methods to improve its sales and marketing results.
How does the human brain decide? First, it is necessary to look at the physiological structure of the brain. In addition to the right and left hemispheres, the brain divides into three layers that act as separate organs with different cell structures and functions.
This brain thinks. It processes analytical data and shares it with two other brains.
This brain feels. It processes emotions and feelings and also shares its knowledge with the other two brains.
Reptilian brain (Original brain)
This brain decides. It compares the knowledge of both brains but controls the final decision-making process.
In case the original brain decides, the whole of business and marketing strategy should be covered by entirely different principles of communication in order to be active and adapted to this brain structure.
Neuroscience consists of various disciplines, including molecular biology, electrophysiology, neurophysiology, anatomy, embryology, developmental psychology, cell biology, neurology, behavioural and cognitive neuropsychology. In this sense, neuroscience brings knowledge about consumer behaviour. To understand consumer buying behaviour and consumer decision, let us start with a general introduction to the nervous system.
Pradeep (2010) teaches that the human brain processes sensory perceptions subconsciously. In his opinion, this fact is strange to us because we cannot think about how we think when we are not aware that we are thinking. In his opinion, this finding is undisputed, and in his book The Buying Brain, he refers to other scientific studies in this regard. Most of the day and night activity is our brains below the threshold of our conscious perception. Scientists have tried to express the ratio between conscious and subconscious brain activity. The explanation is in the book of Harvard Professor of Psychology, Timothy Wilson (2002). They claim that our senses are exposed to about 11 million information every single second. Most of it passes through our eyes, but all the other senses contribute to hearing, touch, smell, taste and spatial perception. Our conscious brain - the part that is conscious thinking - can at best handle 40 information per second. Everything else is subconsciously processed. It means that 99.999% of the information is subconsciously processed. No wonder the brain is often a mystery to us. The challenge for brands and marketing is therefore apparent: how to impress on the 40 consciously processed information?
The nervous system is the primary control, regulation and communication system of the human body and consists of the brain, spinal cord, nerves and nodes. These, in turn, consist of different groups of cells, including nerves, blood, and connective tissue. Through its receptors, the nervous system of a person maintains contact with the external and internal environment. Along with endocrine (hormonal) secretion, the nervous system regulates and controls the body's balance and thus every part of our lives. The different activities of the nervous system are assorted with interrelated functions: sensory, integrative, and emotional. The nervous system also acts as a centre of all mental activity, including thinking, learning and memory. From an anatomical and functional point of view, its two main components are the central nervous system (CNS), consisting of the brain and spinal cord and the peripheral nervous system (PNS) - the nerves.
The brain acts as a body communication centre and receives sensory and motor information from its various parts. These signals are processed in different areas of the brain that are classified by function. Consequently, sensory inputs are transmitted to different parts of the locomotive apparatus. Such brain reports produce specific muscle and behavioural patterns. The human brain is the most complex structure that humanity knows. It is therefore not surprising that the systematic study of this body is a complex task in itself. To emphasise the complexity, suffice it to say that the brain contains up to one hundred billion neurones that are interconnected in a far greater number of possible interrelationships. Revealing the anatomy of the brain and its construction provides the basis for a better understanding of our daily functioning, creative processes, or artistic expressions or abilities. The brain is made up of many areas that handle different tasks.
The field of neuroanatomy is one that focuses on linking function with brain structure. However, it is important to consider the brain activity comprehensively as the relationship of all its parts. No area of the brain acts alone, even though the main functions of different parts of the brain were yet determined.
The forebrain is the most substantial part of the human brain associated with higher brain functions such as the level of thought and action. Outer thin, less than 5 mm, the brain layer is called the cortex. Its dominant part - neocortex, is sometimes referred to as grey matter. This evolutionarily latest design contains six layers of cells filled densely with neurones. It is marked by deep grooves (sulci) and wrinkles (gyri). The folds increase the surface area of the neocortex without too much volume increasing, which facilitates the development of new functional areas responsible for widespread cognitive skills, such as working memory, speech and language. Deeper parts are composed of white matter with some other pockets of grey matter spreading inside. The brain is divided into several folds into four sections (rounded lobes), frontal, parietal, occipital and temporal lobe. Their general functions can be summarised as follows. The frontal lobe is located in front of the brain in the forehead area and is responsible for planning, organising, managing behaviour, short term memory, problem-solving, creativity and judgment. The occipital lobe, located at the back of the brain, is associated with visual processing. The temporal lobe, near the temples, is associated with perception and auditory stimuli, memory and speech. Also, the temporal lobe contributes to assigning emotional value to stimuli and memories. The cerebral lobe, which is located above the occipital and behind the frontal lobe, is responsible for the integration of sensory information as it relates to spatial orientation; it is associated with motion, location of objects, and relations between numbers.
Some scientists, such as Damasio and Craig, have pointed to yet another part. Lobusinsularisor insula - as a particular part of the temporal lobe. This "fifth" lobe lies deep in the brain between the temporal lobe and the lower parietal cortex. This region seems to accept inputs that deal with emotional information, such as pain, temperature, itching, local oxygen status, and touches (Craig, 2009). Furthermore, it transmits information about the administrative areas of the brain. Furthermore, it transmits information to the brain's executive areas. According to Damasia (1996), insula plays a role in mapping the bowels that are associated with emotional experiences and helps to create conscious feelings.
Semantic memory refers to knowledge of facts and the world. It is an encyclopaedic type of memory and contains knowledge that does not need to be related to a personal experience. Simple pieces of data and symbols - in the context of this work, for example, brand logo, pricing.
Words link to the other areas of the brain in charge of sensory processing or motion control. For example, if we read the verb "kick", it activates not only the brain language but also the areas responsible for foot movement control (Pullvermuller, 2005). Another example is the gesturing of a call.
Another way to work with memories is episodic memory. If the memory includes significant personal experiences, it is treated differently. For example, when reflecting on past events such as graduation, we remember that in terms of time and space, concerning our mental state and associated emotions, which is specific to episodic memory. Due to the wealth of data, the memory is context-specific and more vivid.
The formation of new episodic memories includes the hippocampus and, more generally, the middle temporal lobe. The prefrontal cortex is also involved in coding new episodic memory because it helps organise information for efficient storage, drawing on its role as a powerful function. In general, episodic memories are distributed throughout the cortical region of the brain, and their subsequent search is due to the frontal cortex. However, space-related memories, such as commuting to work every day, create internal maps that remain in the hippocampus neurones.
Together, semantic and episodic memory creates a broader category called specific memory, unlike procedural memory, which consists of acquired skills (such as the ability to dance). The latter memory represents implicit memory because words can not easily express it, nor does it have to be induced by conscious thinking, that is, induced automatically, such as driving a car.
Continue to Part 2 - NEUROMARKETING RESEARCH METHODS & ETHICS