Chapter 1: Lecture

Good morning. We have a lot to cover. OK? So let’s get started. Today, we are going to continue talking about marketing research, and we’re going to be focusing on a trend called neuromarketing.

Now first, I’m going to talk a little bit about why it developed. Then I’ll explain how neuromarketing works, and we’ll look at a couple of examples of how it’s been used so far to illustrate it. And then finally, I’ll cover some future possibilities and concerns some people might have about how this new type of research works. OK? Let’s get started.

OK. First, why it developed. Now, advertisers have understood for a long time that buying decisions are not always rational, that emotional factors, . . . irrational reasons, . . . can be much stronger than the logical reasons, like price, quality, performance, taste. Get the picture? Now, the main motivations for many purchases are unconscious. They’re under the surface, so people don’t realize them. So this means that focus groups and surveys can be useful, but their effectiveness is limited. And that’s because most people are not fully conscious of how they differentiate between products. So, in other words, people don’t always know the reasons they choose to buy one product over another.

So, here’s how neuromarketing . . . neuromarketing comes in. Researchers wanted to find other ways, other methods, besides surveys and focus groups, to do marketing research. So, they wanted to find a more scientific method to understand the target market. In fact, they’d like to understand the target market better than it understands itself.

Now, that’s why neuromarketing developed. So, now let’s move on to how neuromarketing works.

Neuromarketing researchers use machines designed for medical purposes, specifically, magnetic resonance imaging, otherwise know as MRI. OK? And this medical technology can take pictures of brain activity. But marketers are using it to find out how people are thinking. Uh huh. How they process information about products, brands, and of course, advertising.

So here’s how it works. While a test subject is connected to the MRI machine, researchers might show him a picture, maybe of a person like Arnold Schwarzenegger, or an activity like rock climbing, or they might show him a new TV commercial they’ve created. At the same time, the researchers are looking at a picture of the person’s brain, at the activity going on inside the brain as the person looks at the image. They look at which parts of the brain are being used and the patterns of activity between areas of the brain. OK. You see, where in the brain something is processed suggests to the marketers how people are processing it, OK or thinking about it. And this is because the brain uses different areas to do different things, and researchers now know a lot about where different functions of the brain are located.

So, do you understand? Different areas of activity in the brain can suggest to researchers if a person is responding positively or negatively to something and how strongly. Interesting, huh?

Now, let me give you a couple of examples that illustrate how it works. A 2004 study at Baylor College of Medicine tested people’s responses to the taste of two different colas. All right. They had Coca Cola . . . and Pepsi. And they found that during the blind tastings, where volunteers didn’t know which brand they were think. . . they were drinking, the results were split. Roughly fifty percent chose Coke, and fifty percent chose Pepsi as the better tasting.

They also found that people were using the part of the brain connected to the feeling of reward. OK. This meant that their brains were focusing on the taste and how much they liked it. However, when the brand names were given—when people knew which cola they were tasting—the results changed. Now . . . three quarters, three quarters of the people chose Coke over Pepsi. So only a quarter, or twenty-five percent, chose Pepsi.

They also found people were using a different part of their brain than before. They were using a part that’s more closely connected to personality and self-image. Now this suggests that the image of the brand (what people associate with the brand) was responsible for the Coke preference. So, participants in the study preferred Coke’s image, not necessarily its taste. And this is important because this image preference translates into sales. Coke is the market leader in colas.

Now, let me give you another quick example to show what else brain-imaging technology can show researchers. Yes. Here it is. Ulm University in Germany, in a study funded by Daimler-Chrysler, used this technology, this MRI technology, to see how men reacted to pictures of cars. And guess what? They found that men use the back of the brain, a part of the brain used to recognize faces. Now, we don’t know for sure exactly how this connects to buying behavior, but one possibility is that men process the design of a car like it was a human face. So this may cause them to prefer a car that has a “face” that is appealing. Make sense to you? Makes sense to me.

Now, these are interesting studies, but you know, the brain is a very complicated organ. And we may be able to see a reaction in the brain, but we still don’t know exactly what people are thinking or how a particular brain reaction relates, or connects, to buying behavior.

So, that said, what about future possibilities? Humm? Well, we may not be there yet, but in the future, researchers hope to be able to accurately and precisely read pictures of brain activity to understand human—consumer—feelings and attitudes, and predict behavior . . . consumer behavior. Neuromarketing could be a very effective marketing research tool for the future. OK. It could help companies understand the target market’s preference and needs. So that’s the potential benefit. It can help companies predict consumers’ needs and desires.

Now, of course, trying to find out more about the target market, well, that’s nothing new. But neuromarketing could one day be a much more powerful, more effective method than using focus groups and survey research. And that’s what the concerns focus on.

Some people are concerned about the possible abuse of this tool. It could be used to do more than meet consumers’ needs. Now, it may be okay to use brain scans to . . . to, to design television ads for a cola, but what about a political ad, say, for a presidential candidate? Can we trust that the information learned from this marketing research will not be used to unconsciously influence our behavior in ways we don’t even notice or really understand? Good question. Something to think about.

OK. Now that we’ve had an introduction to the ideas and issues connected to neuromarketing, I’d like to break you into small groups to discuss the study questions for this chapter of your textbooks. OK?