MBA in India
HABITS OR “AHAH” BITS?
The field of Neuromarketing or brain sciences which study consumers’ sensory, cognitive and emotional responses to marketing stimuli is simply becoming phenomenal. The term Neuromarketing was coined in 2002 by Prof. Ale Smidts, ERIM (Erasmus Research Institute of Management) author of Top Article Award that same year. It designates the use of modern techniques, involving state-of-the art technologies like FMRi, specific experiments and projective techniques to better understand consumers’ mind and behavior. But what are the challenges and opportunities offered by this new research area to marketing professionals? The literature is vast and the examples really numerous, yet in what follows I highlight some of the most recent debates and success stories that feature the new “Gods” of what can be called the Neuromarketing Mount Olympus.
Behavioral economists and most specifically Neuromarketingreaders know all too well that humans often behave in conflict with the traditional economist’s view of rational decision-making. Also, when confused by a complicated decision, many people simply don’t decide at all.
Take for instance the U.S. system for organ donation. Despite a need for organs so desperate that many patients die annually for lack of a transplant, most states in the North America. require explicit consent. A person willing to donate their organs after death must proactively take some action to express her willingness to bequeath the organs to science. In a recent book by Thaler and Sunstein, “Nudge” (2008), the authors contrast that with other approaches, like presumed consent, in which one not wishing to donate their organs post-mortem must opt out. The most aggressive approach described is routine removal in which the state legally owns the organs after death and can remove them without permission. This may sound strange or bizarre, but in limited implementations it has had astounding Results. The state of Georgia changed its law to require cornea removal from deceased residents when necessary, and the number of cornea transplants jumped from 25 to more than a thousand in the space of a few years. Imagine the number of delighted cornea receivers and their new lives supported by organ donation.
Decision-making to marketers and strategic managers is a crucial area of knowledge and expertise, as we are always trying to get people make the best choice and take action. Often, however, the way we present that choice or action is structured to yield poor Results. In other words we miss the opportunity of creating “ahah” moments and by the same token, bind positive emotional moods to good habits. By thinking about these issues in terms of choice architecture, we can ethically nudge our customers and employees to better decisions.
Taking now stock of the marketing mix, let us focus for a moment on packaging. What’s better than a chocolate chip cookie? Well, the answer should come easily at this stage: a chocolate chip cookie in a package optimized with Neuromarketing. Although initially this type of research was confidential, and remains to some extent scary to the non-initiated --- for reasons that refer to the myths surrounding the mind, important companies like Coca-Cola, Wal-Mart, Levi-Strauss, Ford and Delta Airlines have been using the techniques more and more for their accurate Results. The cookie study of Chip Ahoy led to specific design changes:
For instance, re-sealability was known to be a valued feature. Nonetheless and quite surprisingly that specific value claim itself was driving negative emotional reactions. The sound was perceived as too irritating and the print not clearly or easily read. In addition, the cookie visual on the proposed packaging was problematic. Despite its prominence, it didn’t appear to be effective because it only drew detached reactions. These insights led to significant refinements to both design elements prior to launch. Accordingly, the re-sealable tab was enlarged to facilitate legibility, while the cookie visual was sort of animated by including flying chips visuals.
Then again do these improvements lead to higher sales and better financial returns as well as higher positioning of the brand? Scott Young, president of Perception Research Services International, describes the process followed by EmSense --- the company that carried out the research, as a combination of eye-tracking and EEG (Electro Encephalograms). He notes that seemingly insignificant items like a bit of steam rising from an entree or a “cheese pull” on a pizza package had a measurable impact. Now, one can only hope that someone ties this research together with sales data and publishes it. That would be a great validation of this very interesting work on package design. But others have already done the mathematical computation and the Results are astounding. Procter & Gamble (P&G) affirmed that releasing Febreze has proved the biggest success of the company thanks to the use of Neuromarketing approaches.
The perfumed water used on couches — is one of the most successful examples of a habit-creation campaign. P&Gintroduced Febreze in 1996 as a way to remove odors from smelly clothes. Consumer surveys had shown that people were leaving their jackets and blouses outside after an evening in a smoke-filled bar. P&Gdecided to spend millions to create a spray to remove offensive smells. The company ran advertisements of a woman complaining about a blazer that smelled like cigarette smoke. Other ads focused on smelly pets, sweaty teenagers and stinky minivan interiors. But Dr. Wood, a professor of psychology and neuroscience at Duke warned that: “Habits are formed when the memory associates specific actions with specific places or moods. Eat regularly chips while sitting on the couch, and after a while, when seeing the couch you will automatically reach for the Doritos.” He concludes that these associations are sometimes so strong that you may have to replace the couch with a wooden chair for a diet to succeed.
The researchers at P&Grealized that these types of findings had enormous implications for selling Febreze. Because bad smells occurred too infrequently for a Febreze habit to form, marketers started looking for more regular cues on which they could capitalize. In a sense, a product originally intended for use on piles of smelly, filthy clothes was eclipsed by its exact opposite --- a product used when women confronted a flawless, sparkling and tidy living room. And the more women sprayed the more automatic the behavior became while associating the positive consequences to the product’s brand. Customers habitually spray tidied living rooms, clean kitchens, loads of fresh laundry and, according to one of the most recent commercials, spotless minivans. In fiscal year of 2008, consumers in North America alone spent $650 million buying Febreze, according to the company which is proud to indicate it as one of the top profitable items in their portfolio.
Dozens of other companies have also redesigned advertising campaigns around habitual cues. Beer commercials do now pay more attention to the jovial “buddiness” of drinking beer, thus replacing handsome ladies with groups of buddies, because research shows that groups of friends are one of the strongest habit cues. Candy bar companies, through commercials, have tied their products to low-energy cues, transforming what was once a high-calories dessert into a pick-me-up for cubicle. It is therefore not only important to prepare professionals to the neurosciences, but also train them to spot the major benefits for the product, service and brand they allocate resources to. Certainly though, if you want to join the few and distinguished on Mount Olympus, take the fast track to success with Neuromarketing.
Author: Prof. Ianna Contardo
Ianna Contardo, Associate Dean, Global MBA Program & Head of Neuro-Marketing Center of Excellence, S P Jain Center of Management, Dubai – Singapore – Sydney
Prof. Ianna is an Italian by nationality and successfully completed her Bachelors of Science in Economics & Finance from Bentley College, USA. Ms. Ianna has done an MBA in Information Technology, Innovation & Strategy from Theseus Institute, France followed with a PhD in Strategic Management from the Warwick Business School, UK. Prof. Ianna has been a full time teaching faculty for renowned schools across the globe like IE Business School; Schiller International University, Madrid and Syracuse University, Madrid. She has also been a Strategic Marketing Projects consultant with Olson Zaltman Associates for Fortune 500 clients and the Founder of consulting approach registered under Neuro-Strategy®: Combining the strengths of strategic thinking with the novel insights from the neurosciences, Bosch.
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