Neuromarketing
Can neuroscience help attract customers while ensuring freedom of choice?
Neuromarketing studies consumer’s biological responses to advertising stimuli. With consumer brain data, companies can “mind read” to set prices, and improve their branding and ad practices.
The field of neuromarketing is often criticized for validating information that we already know from traditional marketing practices. However, some cases suggest that it has its own value.
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A 2011 Emory study took fMRI scans of people listening to music. Activity in a certain part of the brain ended up being correlated with the song’s popularity. However, when people were asked directly which songs they liked, their verbal, conscious responses did not correlate with the song's popularity; the brain knew something they didn’t.
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While many people understand how to make something visually appealing in advertisements, many companies like the idea of ensuring consumers are directing their attention to exactly the right things at the right times. This can only be done with brain data, or namely a physiological proxy (eye tracking).
Leading consulting companies in the field, like Nielsen, use eye tracking to fine tune the timing of advertisements and the responses they elicit.
Read an NIH study about the effectiveness of eye tracking here
Like many other uses of neuroscience in business, there are major privacy concerns in neuromarketing; the idea of a big business “mind reading” is enough to make many people skeptical. There is also the added worry of coercion; advertising is of course supposed to be convincing and has manipulated consumer’s brains even before we fully understood that was possible. But, could the selling go too far and force people into decisions they would never otherwise make?
Learn more from the Harvard Business Review “Neuromarketing: What You Need to Know”
Generic Competitive Strategy: The Basics of Consumer Mindreading
To explain how businesses can achieve above average profitability, Harvard Business School Professor Michael Porter created this table of “generic competitive strategies.”
For example, places like Walmart, McDonald’s, and Amazon use cost leadership, by setting low prices that make their products incredibly popular. They lead entire industries, meaning they have a broad target.
Starbucks and apple use differentiation; they target large audiences and distinguish themselves through quality and unique branding, allowing them to charge higher prices.
Rolls Royce and Prada both use a differentiation focus strategy. They sell to narrow, niche markets, and distinguish themselves within that niche.
Claire’s and Home Depot both use cost focus, providing very low costs in their niche markets.
The reason these strategies are separate is because it is very difficult for businesses to sustainably pursue more than one. Not only is differentiation usually too costly to also be a cost leader, but using too many approaches can confuse the consumer and their associations with the brand.
These strategies are based on business practices that read the mind of the consumer and appeal to different goals they may have, often unconsciously.
Consider…
