Neuromarketing Science & Business Association (NMSBA)

Articles and Blogposts

  • September 05, 2014 16:24 | Simone Oude Luttikhuis

    Author: Duncan Smith - The Mindlab

    If you want to truly understand consumer behaviour, you need to not only look at people’s explicit responses (what they saythey like), but to also take subconscious emotions and judgements into account. But why is it the case that subconscious processes influence our decisions? Surely we should make better judgements if we consciously thought about our decisions more and not let our gut feelings take over. In this blog post, I will look into how we use subconscious ‘thinking’ to make decisions and why this is actually a good strategy.

    Coke cans and cars

    It is often thought that we base our decisions primarily on conscious thinking when there is a lot at stake, for example when we buy expensive goods, choose a place to live or buy a car. In contrast, when shopping for cheaper or less important products, subconscious thought is often the main driver of our decisions (we will usually pick an item within seconds out of a range of competitors, without consciously weighing up all of their pros and cons, but rather trusting our intuition). This theory certainly makes sense when you think about subconscious thinking as fast and relatively easy, and conscious thought as a slow, more effortful process that can be used to override the subconscious and evaluate different aspects more carefully. But is there more to subconscious decision-making than is immediately obvious? If you are making an important decision (e.g. buying a house), your friends and family will encourage you to spend a good amount of time considering different options, sleep on the decision, write down advantages and disadvantages and discuss them with others. But research has shown that only trusting your conscious thoughts might not always be the best approach.

    Spontaneity and happiness

    We think that thinking hard and justifying decisions will lead to better outcomes, but this is not always the case. An experiment was conducted to test whether people would be happier with spontaneous decisions or ones they justified (Wilson et al., 1990). For this, participants were given the choice between several posters which they were allowed to keep after the experiment. Half of the participants had to just pick a poster and take it home, while the other half were asked to write down reasons for why they picked the poster. Both were told that the experimenter would not know which poster they picked, so that they would not feel judged for their decisions. Not only did the spontaneous group pick different posters than the deliberation group (posters that were ‘just pretty’ instead of ones with motivating slogans, etc.), when asked a few months later about their decisions, they were also much happier with the choice they made. But one might argue that picking a poster is not a particularly important decision, and that of course we can trust our subconscious to make this choice. However, the following example will show that we should use our gut feelings when making more important decisions as well.

    Is our subconscious better at making important decisions?

    In order to test whether we make better judgements using conscious or sub-conscious decision-making processes, a series of studies was carried out at the University of Amsterdam, looking at choosing apartments or potential roommates (Dijksterhuis, 2004). For this, participants were shown 12 pieces of information about each possible apartment (e.g. size, location) or roommate (e.g. tidy, fun). The way the information was presented ensured that there was always a hypothetical ‘best choice’ (one apartment was better than the others). After showing participants the information, they were either asked to pick their favourite straight away (control condition), were given 3 minutes to think about their decision and then choose (conscious thought) or were distracted with a difficult task for 3 minutes and then asked to decide (this discouraged conscious thought and was therefore seen as the subconscious decision). When looking at the choices they made, it turned out that the subconscious group made the best decisions (subjectively, as well as when individual importance of factors was taken into account – e.g. when someone said that location was more important than size, etc.).

    How is this possible?

    When thinking of conscious and subconscious thought as simply slow vs. fast or effortful vs. effortless, we miss one important aspect of these different ways of ‘thinking’: The amount of information that can be processed. Consciousness can only process a relatively small amount of information at once, while the processing capacity of the subconscious is much larger. Therefore, when we have to make a judgement and only take a few facts into account, conscious thought may lead to better results than the subconscious, while the subconscious appears to better at forming overall impressions. When there are lots of factors to consider, conscious deliberation runs the risk of taking not all of the information into account, but basing the decision on just a few of the facts. Therefore, even when making complex, important decisions, it can often be better to listen to your gut feelings. And one of the pieces of advice your friends and family gave you earlier is actually based on this idea: Sleep on your decision. Often, being distracted for a while can help coming to a conclusion, and artists, authors and anyone else having to use their creativity will know that incubation (stepping away from a problem) can help tremendously in coming up with good solutions.

    Overall, it can be said that not only simple, unimportant decisions are best made using the subconscious, but that even difficult and important decisions such as choosing a house are influenced greatly by our subconscious, because it provides a more global impression. This is why testing subconscious, implicit and automatic impressions is not only important when trying to predict the success of inexpensive items such as fast-moving consumer goods, but will also give a great deal of insight for more expensive goods (and related brands, advertising strategies and design).


  • February 11, 2014 10:24 | Carla Nagel (Administrator)

    New Barkley Study Reveals How This Generation’s Behavior and Buying Habits Change After Kids

    prbizAmerica’s often-watched millennial generation, traditionally viewed as young and unattached, has grown old enough to have children. Among the older half of millennials, those between ages 25-34, there are now 10.8 million households with children. Further, with millennials accounting for 80% of the 4 million annual U.S. births, the number of new millennial parents stands to grow exponentially over the next decade. A new study of 25-34 year-old parents reveals how starting a family has changedundefinedor not changedundefinedthis generation’s behavior, values, media consumption and buying habits.

    The two-part Millennials as New Parents study first analyzed exclusive research records of 10,800,000 millennials with children. The second phase included a one-to-one survey of 1,000 American adults aged 25 to 34 who have children living with them.

    “Millennials are often inaccurately portrayed through the prism of youth and all the character traits that go along with itundefinednarcissism, rebellion and entitlement to name a few,” said Jeff Fromm, EVP at Barkley and co-author of the just released book Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever, in a news release. “A large portion of millennials have grown up. By overlooking the fact that many millennials are now parents, brands could miss changes in behavior and consumption that directly impact their bottom line.”

    What one retailer would millennial parents shop at for the rest of their lives?

    When given the choice to shop at one store for the rest of their life, millennial parents gave a surprising answer. Between Amazon, Walmart and Target, millennial parents chose Walmart. Even as the world’s most tech-savvy generation, millennials who have kids opted for the brick-and-mortar locations of Walmart and Target over online darling Amazon.

    When broken down by income level, the answer shifts slightly. High-income millennial parents chose Target, while middle and low income brackets chose Walmart.

    Overall, those millennial parents who chose to shop at only Amazon for the rest of their life tend to be the most conservative politically. They still supported Barack Obama in the last election, but by a much smaller margin than those who prefer Walmart or Target. Plus, they are less likely to say they have become more politically liberal since they had kids than the other groups.

    How do millennial parents shop?

    Before they become parents, millennials rank their favorite brands in order of descending importance as Nike, Sony and Gap, with 10% naming Nike as their top choice. After they become parents, millennials continue to name Nike as their top affinity brand, but at a much lower margin. Only 6% put Nike at the topundefinedfollowed by Target and Apple at 3% each.

    Millennial parents are pragmaticundefinedwhen compared to before they had children, they buy significantly more based on price than they do on quality. Before they were parents, their buying decisions were 57% on quality. After parenthood, they buy just over 50% on quality.

    In some categoriesundefineddining and entertainment, apparel, and digital productsundefinedthe change is more dramatic, with the shift away from quality and toward price dropping as much as 20%.

    How do millennials parent?

    Fifty percent of millennial parents agree with the statement, “I am raising my kids the way I was raised,” while 28% disagree and 22% are neutral. So where do the differences and similarities lie?

    Millennial parents’ top concerns are environmental issues and what their kids eat, with 52% saying they closely monitor their children’s diet and 64% saying the environment has become a top concern now that they are parents.

    Boomers, which are often cited as the inventors of the “helicopter parent” phenomenon, may have provoked something of a backlash, now that their millennial children are parents. For example, 61% of these young parents agree, “kids need more unstructured playtime.” Only 21% think their own kids are overscheduled.

    Today’s millennial parents show a traditional streak: 48% say, “children do best if a stay-at-home mom raises them.”

    What do millennial parents value?

    When shopping for products, 50% of millennial parents say they try to buy products that support causes or charities.

    “Millennials are often cited as one of the most socially compassionate generations ever,” said Fromm. “The brands that win with millennial parents often help them feel better about themselves through purchases and brand engagement.”

    In fact, of the brands that millennial parents favor mostundefinedNike, Target and Appleundefinedevery single one has a cause platform. Nike, through its Nike Better World initiative, addresses social issues including health and wellness, Native American culture and sustainability. Target is deeply embedded in the cause arena, with its giving programs covering issues including education, hunger, health and the environment. Apple is an active member of Product (RED) and focuses a large part of its cause effort on sustainability.

    When answering the question, “I want my kid(s) to_______”, millennial parents offered insight into what they value most. Ranked in order of importance, 82% want their child to know that they don’t need possessions to make them happy, 77% want their child to graduate college and 56% want their child to excel at sports.

    Millennial parents are politically very similar to millennials in general. They voted 58% for Barack Obamaundefinedvery close to most of the exit polls for millennials in general.

    Now that they're parents, millennials have become more interested in politicsundefined43% are more interested compared to 36% who are not. However, only 30% say they've become more politically liberal than before they were parents.

    How do millennial views on privacy change after they are parents?

    Millennials, the most transparent generation ever, continue to remain heavily connected online even after they become parents. Over 35% of millennial parents claim to have posted on Facebook in the last day.

    Millennials as a whole regularly trade private information for perks from brands they favor. However, that willingness falters a bit when millennials become parents, with 48% claiming they are less likely to give up private information about themselves in exchange for promotional perks.

    How do millennial men and women parent differently?

    When it comes to millennial parents, there are some distinct differences between men and women. Men are much more likely to say that since becoming a parent, they are the same person as before they had childrenundefined45% of men agree with that statement, but only 30% of women.

    With the growing number of two working-parent households, its not surprising that work-life balance is a key issue for both male and female millennial parents. Here there is strong agreement between the sexesundefinedwith 76% of men and 74% of women saying that work-life balance issues have become more important.

    “Millennials as New Parents” by the numbers:

    Number of US households with adults 25-34 who have children: 10.8 million
    Portion of parents married: 63%
    Median income: $50,000
    Total labor force participation rate: 76%
    Labor force participationundefinedwomen: 61%
    Living in urban area: 28%
    Living in suburban area: 51%
    Living in rural area: 20%
    Hispanic population: 16%
    African American population: 12%
    Caucasian population: 61%
    Other minority population: 11%

    From June 14th to June 20th, an online survey was fielded by Vision Critical and conducted and analyzed by Barkley among 1,001 randomly selected American adults age 25 to 34 that have children living with them, and who are Springboard America panelists. The margin of errorundefinedwhich measures sampling variabilityundefinedis +/- 3.1%, 19 times out of 20. The results have been statistically weighted according to the most current age, gender, region, income, and ethnicity Census data to ensure a representative sample. Discrepancies in or between totals are due to rounding.

    This article was originally posted on www.bulldogreporter.com
  • November 05, 2013 10:22 | Carla Nagel (Administrator)
    The holiday season is now officially underway. Cities around the world are soon to be draped in twinkling lights, while retailers ready themselves for the large influx of customers who make this time of year among the most lucrative. One theme we are likely to see everywhere is the color red: red lights, hats, sale signs, poinsettia flowers, décor, ribbons and ornaments, etc. Given that red is the accepted color of the season, how much do we really know about its effectiveness in generating sales in shops around the world?


    red holiday


    The answer is really quite surprising. Some argue that red is psychologically arousing and excites us to shop.[1] Others argue that red leads to an increased attention to detail.[2] Most interestingly, however, is how men and women react differently to the color itself. In retail environments, men report that when they see red sale tags they believe that they are receiving a more favorable price and feel positively about the decision they have made – it is a valuable heuristic used to make shopping simpler. Women, on the other hand, report feeling suspicious about red, and are under the impressing that they are being tricked.[3] Researchers at the University of British Columbia have found that we associate red with stop signs, fire trucks, and the teacher’s pen – all things that produce an element of danger.[4] Danger, however, can signal power, which is where red’s appeal in retail becomes apparent.

    How can your business capture its share of the estimated $640 billion market? [5] Biological and neurological studies have arrived at the same conclusion. The answer is red. Have your salespeople incorporate red into their uniforms, or perhaps use red lipstick or blush in their makeup routines, as these tactics have been known to increase consumer spending. Insofar as red signals power, it also signals attraction, with both men and women reporting higher levels of attraction for the opposite sex when wearing red clothing, resulting in consumers reaching deeper into their pockets than they otherwise would have.[6]

    Photo credit: www.redbubble.com, Evelina Kremsdorf

    [1] www.telegraph.co.uk/science/roger-highfield/8967435/Neuromarketing-reading-our-festive-desires.html
    [2] www.sciencedaily.com/releases/2009/02/090205142143.htm
    [3] www.oxfordtoday.ox.ac.uk/features/psychology-shopping
    [4] www.sciencedaily.com/releases/2009/02/090205142143.htm
    [5] www.bizreport.com/2013/08/forecast-2013-holiday-spend-to-push-640-billion.html
    [6] www.neurosciencemarketing.com/blog/articles/red-effect.htm


  • October 07, 2013 10:21 | Carla Nagel (Administrator)

    A lot is known about two types of mental processes in the brain: System 1 and System 2. The former is concerned with subconscious, automatic reasoning, whereas the latter is concerned with conscious, intentional more deliberate type of reasoning.

    Just as these two systems can be regarded as ‘complementary opposites’ to each other, they can have very distinct applications in marketing.

    Because system 1 specializes in making fast (subconscious) judgments, the retail environment with its hundreds of same-category products requires that the emphasis should be on utilizing the skills of System 1. When a customer enters a retail store, the abundance of lights, colors, signage and sounds can distract the customer insofar as there are no unique stimuli that can draw the customer’s full, undivided attention that ultimately results in a purchase.

    A company’s products, therefore, needs to be sufficiently unique in terms of design, contrast (with competitive brands), readability etc. so that the impatient customer is ‘allowed’ to use the fast-thinking System 1 when crawling the isles in search of the right product and thereby making a quick decision.

    Werner is the founder of Neuromind Marketing in South Africa.
  • October 01, 2013 10:19 | Carla Nagel (Administrator)

    Serie: Quick Neuro Wins for Retailers.
    Neuro Retail Revolution speakers share their tips. Part 5: social media

    sarafay

    Attract recommendations.
    Showing the opinions of other people, even complete strangers, influences purchase decisions. Including recommendations in your online shop can increase the purchase volume by 20% or more. The inclusion of the fans profile photo can bolster this a further 10%. Free gifts trigger reciprocity: offer a free gift in exchange for recommendations and increase your sales turnover and loyal customers at the same time. Use social media to make it super easy for your customer to endorse your brand and share information at the same time.

    Sara Fay is founder of Whitematter Marketing in the United Kingdom.

    This tip appeared in an article about retailing in the quarterly Neuromarketing Theory & Practice.
  • September 24, 2013 10:17 | Carla Nagel (Administrator)
    Expectations can determine the perception of your product. Setting that expectation and spreading it is the next step, but beware of trickery.

    Consumers are constantly told that the latest Nike running shoes or Mercedes-Benz can offer higher performance. Consumers believe it, they make a purchase and they even experience it. From sportswear to cars, expectations of a product or service can actually create a resulting experience. But how?

    Even the savviest and most jaded consumers rarely approach a new product with complete objectivity. A multitude of factors tell us what to expect, including price, packaging and the product’s ad campaign, among others.

    But just how powerful are these expectations in shaping customers’ thoughts about what they consume? And how do they influence future behaviour and sales? Pre-consumption expectations about a product affect more than what we say, or even what we think, about that product. Our biases are reflected in our brain activity, affecting our perceptions of what we consume at a deeper and more direct level than psychologists can measure, says Hilke Plassmann, Assistant Professor of Marketing at INSEAD speaking about her recent paper How Expectancies Shape Consumption Experiences, co-authored by Tor D. Wager of the University of Colorado at Boulder.

    An MRI/Wine Tasting
    Plassmann’s conclusions stem from a study she co-conducted in 2008 measuring neural responses to drinking wine. Participants were instructed to sample various wines through a straw from inside an MRI machine. The rub? The researchers deliberately misled participants about the prices of the wines, claiming one cost US$45 when it actually cost US$5 and presenting another as costing US$10 when it really retailed for US$90.

    “This allowed us to observe their brain activity while they were consuming the wine,” Plassmann told INSEAD Knowledge in an interview. “Are they rationalising after the fact that it should be better because it’s more expensive, or does it really change their taste processing? What we found is that it really changes the neural activity in an area called the medial orbitofrontal cortex, which is an area that encodes our experience of pleasure.”

    These results came as a surprise to some of Plassmann’s collaborators on the study. “Some of us were thinking, ‘Oh, it’s more like rationalisation; it’s more like a cognitive process.’ At this point it was an open question. We had competing hypotheses.”

    For Plassmann, the findings highlight the speed with which humans form lasting impressions that synthesise all types of data. “The bias kicks in at a very early stage,” she says. “It really changes your taste perception, or your visual perception, or your pain perception. These are complex processes where you receive a lot of input, and such information that has nothing to do with the taste itself – they are so fast, and integrated more holistically into your experience that you can’t distinguish. You think it’s linked to the taste.”

    Read more at: http://knowledge.insead.edu/business-finance/marketing/turning-expectations-into-customer-satisfaction-2606#1sssRUjlGt3ehV7H.99


  • September 16, 2013 10:15 | Carla Nagel (Administrator)

    Serie: Quick Neuro Wins for Retailers. Neuro Retail Revolution speakers share their tips. Part 4: visual attention on websites


    stevegenco

    Check for bottom-up visual attention. Extensive eye-tracking research has documented that bottom-up attention is automatically activated, without conscious control, immediately when a person sees something new in his or her visual field. 

    People unconsciously divide web pages into areas of promise. Some features of viewed objects are naturally visually salient, which means they automatically attract bottom-up visual attention. Examples are: brightness relative to background, distinct borders, the center of the viewing area, tight groupings of visual objects, overlapping items, movement (especially around the edges), faces and locations where faces are looking. 

    These automatic attractions are so predictable that we can find good results without eye-tracking. The software can deliver up to 80% accuracy compared to a real eye-tracking study, which saves a lot of money.” 

    Steve Genco is a director at Intuitive Consumer Insights. He is co-author of Neuromarketing for Dummies.

    This tip appeared in an article about retailing in the quarterly Neuromarketing Theory & Practice.

    Serie: Quick Neuro Wins for Retailers. Neuro Retail Revolution speakers share their tips. Part 4: visual attention on websites

    Check for bottom-up visual attention. Extensive eye-tracking research has documented that bottom-up attention is automatically activated, without conscious control, immediately when a person sees something new in his or her visual field. 

    People unconsciously divide web pages into areas of promise. Some features of viewed objects are naturally visually salient, which means they automatically attract bottom-up visual attention. Examples are: brightness relative to background, distinct borders, the center of the viewing area, tight groupings of visual objects, overlapping items, movement (especially around the edges), faces and locations where faces are looking. 

    These automatic attractions are so predictable that we can find good results without eye-tracking. The software can deliver up to 80% accuracy compared to a real eye-tracking study, which saves a lot of money.” 

    Steve Genco is a director at Intuitive Consumer Insights. He is co-author of Neuromarketing for Dummies.

    This tip appeared in an article about retailing in the quarterly Neuromarketing Theory & Practice.

  • September 12, 2013 10:13 | Carla Nagel (Administrator)

    Serie: Quick Neuro Wins for Retailers. Neuro Retail Revolution speakers share their tips. Part 3: involve your employees.

    Karin Glattes: "Turn your employees into ambassadors"

    karinglattesInvolve your employees. Shopping is a human emotion. Your employees are the ones who can evoke this emotion on an everyday basis in your clients. Stop talking about the shopping experience that you want to offer, and let them feel, smell, touch and experience what you are talking about. Give them a feeling of what you are aiming at, in your own stores and those of others. Many workers will change their daily routines immediately when they actually experience the goal their boss is aiming to achieve.



    Karin Glattes is a director at Unternehmen Kunde

    This tip will appear in an article about retailing in the next edition of the quarterly Neuromarketing Theory & Practice.
  • September 09, 2013 10:09 | Carla Nagel (Administrator)

    Serie: Quick Neuro Wins for Retailers. Neuro Retail Revolution speakers share their tips. Part 2: brochures.

    Martin de Munnik: “Get more ROI on your brochures”

    Neuroresearch shows that 80% of all brochures fail to activate a buying intention. Most often retailers forget to make one or more promises that appeal to and activate the consumer.

    martin neurrroThey also often forget to envisage their target audience themselves, which means that the brain cannot activate its mirror function. To be more effective a retailer should do as follows.


    1. Offer a reward. The brain is very sensitive to rewards, so make a promise that shows what the consumer will gain.
    2. People always mirror themselves in others: show people visuals of happy consumers making successful use of the product.
    3. Justify your discounts: make them credible. Customers want to know why you are offering a discount, and why you are doing so now. Better brochures could save the retail industry a lot of money: looking at the Netherlands alone, retailers spend more than €7O0 million a year on brochures.


    Martin de Munnik is managing partner at Neurensics

    This tip will appear in an article about retailing in the next edition of the quarterly Neuromarketing Theory & Practice.
  • September 06, 2013 10:06 | Carla Nagel (Administrator)
    Serie: Quick Neuro Wins for Retailers. Neuro Retail Revolution speakers share their tips. Part 1: pricing

    Kai-Markus Mueller: “Involve the pricing story and environment”

    kai neurrro

    Humans rarely perceive things in absolute terms. Most things we see are influenced by their surroundings or by what we have seen in the past. Interestingly, even the way we perceive numbers is biased in this way. There is a category of numbers that is highly relevant for market success: prices. A product placed withing a plethora of higher priced products seems to be a good deal, while when placed among cheaper alternatives it will appear overpriced. A slice of basic chocolate cake at a price of €2.50 at a fancy pastry shop may seem cheap because it is surrounded by many expensive pastry creations. A slice of chocolate cake for the same price sold at the bakery next door, where a muffin or a brownie costs just €1, makes the cake appear overpriced.

    It is fascinating that this effects remains even if the perceptual distortion is well-known. In one study subjects were explicitly informed about such biases. The participants' number estimates were still influenced by previously shown numbers. Because prices are somewhat arbitrary numbers associated with a product, they are especially susceptible to their surrounding and to surrounding prices.

    Kai-Markus Mueller is MD of The Neuromarketing Labs in Germany one of the speakers on the Neuro Retail Revolution

    This tip will appear in an article about retailing in the next edition of the quarterly Neuromarketing Theory & Practice.
    Via Radboud University Nijmegen


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