Neuro Marketing

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(No Transcript)
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Neuro Marketing

• The new revolution
• in Marketing knowledge

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The starting point

• Theirs a sucker born in every medial
  prefrontal cortex
• New York Times 2003

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• Dr.Read Montague of Baylor College of Medicine
  used fMRI while doing
• the Pepsi challenge

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Top down approach

• PET, fMRI, Transcranial Magnetic Stimulation

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• Fruits of a long journey

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• 90 of the new product launches fail

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• 50 of the advertising expenditure is wasted,
  but I do not know which 50

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Marketing loosing its importance

• All that marketers want from CEOs is more money
  to spend
• Prof. Nirmalya Kumar, LBS, Marketing as
  Strategy

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• Mr.Karsanbhai Patel made me eat my words

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• The root of the problem has to be more
  fundamental

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• What ails marketing?

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Scientific basis for marketing theory

• Main cause of marketing failure is the inability
  to understand the consumer behaviour

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Scientific basis for marketing theory

• Unlike other sciences, there are no fundamental
  theories in psychology to decipher human
  behaviour

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Fundamental theories

• Quantum mechanics and general relativity are true
  throughout the universe.
• Darwins theory of evolution and DNA based
  genetics apply to all organisms that have ever
  lived on earth.

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• Psychology on the other hand has been
  characterized by an embarrassingly long sequence
  of theories, each really nothing more than a
  passing fad that rarely outlived the person who
• proposed it
• V.S ramachandran, J.J Smythies, Uni.
  Of California

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The incomplete science!

• Psychoanalysis although it had tremendous
  influence in psychology, it had little influence
  in marketing
• Freudian Fraud by E.Fuller Torrey

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The incomplete science!

• Behaviorism propagated by B.F. Skinner Ivan
  Pavlov etc had huge influence on marketing

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The incomplete science!

• Behaviorism which virtually denied the existence
  of mind, took a beating with the article written
  Noam Chomsky, an MIT professor and linguist
• ( language and problems of knowledge)

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Scientific basis for marketing theory

• Cognitive science has been influenced by studies
  on Artificial Intelligence too had tremendous
  influence on marketing

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Scientific basis for marketing theory

• Cognitive science as much as AI has huge
  limitations. More so its inability to consider
  emotions and its role in human behaviour

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Scientific basis for marketing theory

• You, your joys and your sorrows, your memories
  and your ambitions, your sense of personal
  identity and free will, are in fact no more than
  the behavior of a vast assembly of nerve cells
  and their associated molecules
• Francis Crick, The Astonishing
  Hypothesis

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• Neurology will help build a scientific foundation
  for marketing theories

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• More than 90 of what we know about the brain has
  been discovered in the
• last 10-12 years

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• The stagnant knowledge base of the marketing
  field

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• Many new developments in the field of neurology,
  sociology, anthropology, psychology, etc
• But very little of that has permeated into the
  world of marketing and advertising.

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• Marketing is like Astrology. It is a quasi
  science. It is based more on past practices.

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• Even Ries and Trout have used only logic of past
  practices and not scientific facts to develop the
  theory of positioning

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Who are the best marketers in the world?

• Politicians
• God men/God women
• Organised Religions

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• The conman at Chennai central station

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Heuristics

• The science of fast and frugal decision making

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• The Mother turkey and the pole cat

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• Civilizations advances by extending the number of
  operations we can perform without thinking about
  them
• British philosopher Alfred North Whitehead

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• Daniel Kahnemann,a psychologist wins the Nobel
  prize for Economics in 2002

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• Harvard University introduces a course in
  Behavioural Economics

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• Economist predicts that Behavioural Economics is
  the new trend in management consultancy

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• Rational man, the fundamental assumption of
  Classical Economics is under scrutiny

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• Most of the Marketing theories are influenced
  greatly by the classical economic theories and
  are based on the assumption that human beings are
  rational

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• Great amount of Market Research, Media planning
  hides their fundamental flaws
• behind the correctness of mathematical models

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• Even the world of finance and project management
  falls prey to the workings of the brain

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• What is the length of Nile?

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• Over confidence

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• Huge implications in business forecasting,
• the insurance sector

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• Reciprocation rule
• Reason behind mothers advice to good
  girls

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• Reciprocation rule
• We should try to repay in kind what ever
  another person has provided us.

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• Contrast Principle
• If two things are presented one after another,
  and if the second item is fairly different from
  the first, we will tend to see it more different
  than it actually is.

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• Rejection-then-retreat

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• Commitment and Consistency
• Once we have made a choice or taken a stand, we
  will encounter personal and interpersonal
  pressures to behave consistently with that
  commitment

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• The more effort that goes into a commitment, the
  greater is its ability to influence the attitudes
  of the person who made it

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• Social Proof rule
• The means we use to determine what is correct is
  to find out what others think is right
• e.g.Suicides
• donations

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• Liking principle
• We most prefer to say yes to the requests of
  someone we know and like

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• Secret behind the success of
• Tupperware corporation

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• Scarcity rule
• Opportunities seem more valuable when their
  availability is limited
• Francis Xavier Exposition, annual sale

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• Reactance theory
• Whenever free choice is limited or threatened,
  the need to to retain our freedoms makes us
  desire them significantly more than previously
• ( Jack Brehm)
• E.g. Romeo and Juliet, BMW commercilas

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• The Undiscovered Mind John Horgan
• Phantoms in the Brain VS Ramachandran
• The Making of Memory - Steven Rose
• Descartes Error - Antonio R.Damasio
• How customers Think Gerald Zaltman
• Blink - Malcolm Gladwell
• The Hidden Power of Advertising Robert Heath
  

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Thank You