Neuromarketing in India

Understanding the Indian Consumer

Tanusree Dutta, Manas Kumar Mandal

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351269346
• Edition: 1
• Topic: Commerce
• Subtopic: Marketing
• Index: Marketing

How to understand human behaviour has been a very intriguing question to medicine, computer science, economics, psychology and finance. Each discipline has been trying to study and predict human behaviour through surveys, laboratory-based experiments, questionnaires, interviews, statistics, focus groups; the list is endless. The lack of precision in the existing techniques to predict human behaviour has motivated researchers to move beyond the traditional and search for new and improved techniques. Neuroscience has stepped in to fill this gap. It is based on the assumption that human behaviour is a complex process which has a neural basis and the locus of this process is the higher centre of the brain. Both conscious and unconscious processing of stimulus in the brain is responsible for generating behaviour. So if we could develop a deeper understanding of how the brain functions to generate behaviour, we would be more confident in our understanding and prediction of consumer behaviour. The use of neuroscientific techniques, like functional Magnetic Resonance Imaging (fMRI), Electroencephalography (EEG), Evoked Response Potential (ERP), and sensors to measure changes in one's physiological state, to understand the mind of the consumer has just begun, and professionals in the field see a huge opportunity for neuromarketing in India.

In the domain of neuromarketing, one important question relates to the distinction between Indian and other global consumers of commercial products. Are we different from consumers across the globe? The answer is probably 'yes'. This is documented by the fact that we find a distinct change in the marketing strategy of companies; the methods to influence Indian consumers are different from those adopted in other countries. This gives rise to the question: what makes us different? The next logical question that arises, assuming that we are different or similar, is can we quantify it? Answering why, what and how we are different marks the beginning of the book, followed by issues related to the ethicality of using such techniques to promote marketing, risk analysis in case of failure and future directions in neuromarketing.

The book intends to address each of these issues so that a comprehensive reading in the subject matter would help academicians to decipher consumer behaviour and build theory for possible principles of application in the market.

1
Introduction

Understanding the human mind in biological terms has emerged as the central challenge of science in the twenty-first century.

– Dr. Eric Kandel, neuroscientist and winner of the Nobel Prize for Physiology or Medicine

We have moved on from understanding human behaviour to analysing the factors that generate a particular behaviour. Though psychologists have been able to unravel underlying mechanisms of some aspects of behaviour, a lot more remains to be achieved. Some questions still intrigue the human mind. Inconsistencies in behaviour patterns both within and between individuals in the same context indicate that answers to some questions on human behaviour can be found in the areas less explored. Questions that have aroused the human curiosity include

1. Is there a biological marker for consumer behaviour?
2. Is a consumer rational or emotional in making decisions?
3. Can decision-making be primed? What causes brand loyalty and why is it not universal?

The quest to find answers to these questions continues.

Consumer behaviour is very complex (Solomon, 2009), but understanding consumer behaviour helps to market goods and services better. Failure of existing traditional tools and techniques to understand consumer behaviour forced market researchers to look beyond the available tools. This quest led to the innovative idea of using neuroscience tools and techniques in market research. The result was ‘Neuromarketing.’

Neuromarketing: Past, present and future

The following paragraphs introduce the reader to the brief but interesting history of neuromarketing. They will familiarize the reader with the distance travelled so far by this subject and open the gates for the future of neuromarketing in the Indian context.

Previously, marketing was ‘inward looking.’ It focussed on what the organization manufactured and how they marketed the goods thus produced. But it has traversed a long distance. Today’s marketing is ‘outward looking.’ It thinks about its customers, their needs and demands, and markets accordingly. It faces a challenge in creating loyal customers amidst stiff competition. To address these challenges effectively, market researchers were using traditional market research tools such as surveys and polls. These tools had been market research touchstones for almost a century, until they failed to compute the consumer’s intentions accurately. Traditional market tools, though efficient, were not able to generate reliable results, as they were circumscribed to measuring explicit and manifest behaviour only. There were several examples of highly engaging, high-profile branding initiatives and advertising campaigns that failed to deliver sales, while others achieved tremendous success. These incongruities puzzled marketers. They failed to develop an effective marketing strategy. A transformational change which would be strategic, and help understand the consumer better, became the need of the hour.

Unfortunately, there was no pill that could help understand the minds of consumers, but there was neuroscience, which could generate information about the functioning of the human brain. Instead of relying on questionnaires and polls, one could reach out to understand the functioning of the ‘black box of behaviour’ – the brain itself.

Marketing research at that point in time had to its credit accepted theories and established models. Academicians and theorists had come up with different theories explaining consumer behaviour. A succinct summary of the available theories and how they have been used by the researchers follows.

The theory of reasoned action (Ajzen & Fishbein, 1980; Fishbein & Ajzen, 1975) and the theory of planned behaviour (Ajzen, 1985, 1991) were cognitive theories used to understand human behaviour. Whereas the theory of reasoned action emphasized the influential role of pre-existing attitudes in human behaviour, the theory of planned behaviour emphasized the intention of the behaviour. These behavioural intentions were a function of perceived behaviour, attitude towards behaviour and subjective norms.

Engel, Kollat and Blackwell (1968) further expanded on the theory of reasoned action. Their theory popularly came to be known as the EKB (Engel, Kollat and Blackwell) model. They suggested a phase-wise process of how consumer intention converts into a product purchase. In the first phase the consumer gains information about the product via newspapers, advertisement on television etc. Based on the information gathered, the consumer enters the second phase when there is processing of the information gained. Then the consumer undergoes a decision-making process. The theory had a huge impact on marketers. Marketers could influence consumers by providing enough information about the product and also by influencing the consumer through external variables during their decision-making process. Lifestyle brands made use of this extensively.

Another important theory at this time was Abraham Maslow’s need hierarchy theory of motivation (1943). This theory suggested five hierarchical needs of an individual that induce motivation. The need hierarchy theory had been visualized as a pyramidal structure, beginning with physiological needs that make up the base of the pyramid. Starting from physiological needs and traversing to the top of the pyramid which was self-actualization need, one had to travel through safety needs, love and belonging needs and esteem needs in sequence. Marketers have used this scheme in understanding needs in consumers.

Hawkins Stern (1962) proposed a different perspective for understanding consumer behaviour. While all the preceding theories conceptualized consumers making a rational decision, Stern highlighted the ‘impulsive consumer.’ He proposed that besides taking a rational decision, a consumer is also driven by impulses. Rationality and impulses combined together presented a complete picture of how a consumer makes decision. Impulse purchases are often made under the influence of external variables. He proposed four categories of impulse buyers. They were

1. Purely impulse purchasers. In a purely impulse purchase, products visually stimulate a consumer to buy the product. An example of a purely impulse purchase would be purchase of a perfume at the checkout line of an apparel store.
2. Reminded impulse buyers. Reminded impulse buying may happen when fresh-baked buns besides some bread spreads are displayed and purchased by consumers.
3. Suggested impulse buyers. An example of suggested impulse buying is the purchase of a life-time warranty for a device.

and

• d. Planned impulse buyers. Planned impulse decisions are made by consumers when they know they want to buy a product but are not sure about the specifics. This situation provides a plethora of options to marketers to woo their consumers. Right from product packaging, colour of the product, product placement—all could be used as external variables to influence the consumer’s impulse decision-making.

Research on automaticity proposed that behaviour is a function of unconscious processes that occurs completely beyond the conscious awareness of the consumer (Martin & Morich, 2011). The automatic processes include stereotype activation, behavioural mimicry, trait and unconscious goal pursuit. They have a latent influence on the attitude, beliefs and goals of the consumer, thus establishing the primacy of unconscious thought processes (Martin & Morich, 2011). With this development there was a paradigm shift. Human decision-making was no longer perceived as a conscious process alone. One definitely could not undermine the role played by unconscious thought processes. Conscious and unconscious thought processes were not always synchronized. They were distinctly different. While unconscious thought processes were primal in nature (sex, security needs), conscious thought processes were secondary in nature. They included caring for others, finding meaning in life etc.

Many a times the ‘inner impulse’ drives a person to a commodity with conscious awareness. Developing a keen understanding of the interaction of conscious and unconscious thought processes became a gold mine for marketers. While conscious behaviour was easily captured by the traditional tools of marketing, such as questionnaire, survey methods etc., these techniques were not competent enough to map unconscious thought processes. Researchers were grappling with the disadvantages of traditional research tools, some of which included differentiating between honesty and a socially desirable response. An improvement in research tools was highly desirable. An integration of the existing theories and modern technology to measure consumer behaviour accurately was badly needed. The answer lay in using neuroscience tools in understanding the consumer.

In a conservative country like India, where people are frightened with routine EEG and MRI, the use of neuroscientific techniques in marketing was not able to spread very quickly. The introduction of neuromarketing took its logical time. There was a need to spread awareness about the benefits of these non-invasive techniques of neuromarketing in order to popularize it as a tool for market researchers exploring the Indian market.

Information about contemporary culture helps marketers to understand their consumers better. Plurality and multiplicity characterize Indian society and culture. There exist racial, linguistic, regional, cultural and other forms of diversity in the Indian society. Tradition and modernity co-exist in the Indian society. Culture is one of the significant determinants differentiating the consumer in India. According to Hofstede (1980), culture influences behaviour through its manifestations with respect to values, heroes, rituals and symbols. Thus, each cultural group has different manifestations, and hence are different from each other. This diversity cast its shadow on the Indian market also. Capturing consumer diversity through traditional methods was proving to be difficult.

The Indian market is a lucrative market, which has one of the fastest growing economies with promising consumers. This attracted many multinational companies (MNCs) to tap the Indian market. While some of the MNCs have been successful in understanding the Indian consumers and market their products well, a few MNC giants failed miserably. For example, global brands like Kellogg’s, McDonald’s, LG, Reebok and Coca-Cola introduced their standard products by adopting strategies that are globally accepted. It was only later that they realized that they had committed a mistake. They had to tailor make their product and or services taking into cognizance the concerns of the Indian consumers in order to be successful (Taneja, Girdhar & Gupta, 2012). Failure to understand the Indian consumers raised questions about the methodology used to develop an understanding of the Indian consumers and Indian market.

The Indian market can broadly be divided into urban and rural markets. Consumers of rural and urban markets are distinctly different from each other though they both make purchases and are potent customers of any market. Consumers in each market differ in terms of their purchase decision, purchasing power, use of products etc. According to Rajan (2003), rural customers are more driven by ‘value for money.’

According to Jayakrishnan (2011), one could also differentiate rural and urban markets based on visuals and numerals. In the rural market, a brand is favourably associated with the colours, numbers and visuals used in comparison to urban markets where association of a product is mainly through brand name. The author suggests some examples for colours, such as the product ‘Lifebuoy,’ a soap, which is better retained in the minds of the urban consumer as a Red soap; Eveready, a battery, better remembered as a Red battery and Dabur tooth powder as Lal (red) Dantmanjan. Examples of the successful use of numbers include 501 bar soap, 502 Pataka chai etc.

Other factors that differentiate the rural and the urban consumers include packaging of the product, pricing, advertising, age and family size to name a few (Jha, 2013). Keeping these differences in mind, companies have from time to time changed their marketing strategies to sustain the attention of customers in a way that matches their interest. Some examples include the initiative taken by Hindustan Unilever. In 2010, they began a unique multi-brand rural marketing programme. This was named ‘Khushiyon Ki Doli.’ This marketing programme was launched in Uttar Pradesh, Andhra Pradesh and Maharashtra only. Another example is of the e-Choupal initiative of ITC. For distributing FMCG products in rural markets, they launched an improved version of e-Choupal. Similarly, Chotu Kool, priced at Rupees 3,200 only, was the nano refrigerator that Godrej launched for the rural market. The unique feature of the product was that it could withstand erratic power supply in rural areas. It was a huge success. All these initiatives suggested that success of any marketing strategy is dependent upon knowing your customers well. Thus, refined tools and techniques to understand the consumer better was the need of the times. Neuroscientific techniques had the ability to map the brain and provide meaningful input with respect to both conscious and inner impulses of the consumer.

Advertisements consume a major portion of marketing expenses. Statistics suggest that on average consumers are exposed to more than 5,000 advertisements per day. In this game of 5,000 advertisements trying to impress the memory of the consumer brain, barely a few are successful. Advertisements use fascinating ways to influence the consumer. Advertisement researchers believe that influencing techniques used in advertisements can broadly be divided into two, namely, logical and emotional. Though being logical is more cognitively demanding, emotion relates to the different sentiments invoked by other things such as an image, a work of art or anything. Interplay of both cognition and emotion induce behaviour. Regulating emotion both in thought and expression has been a cardinal trait of Indian culture (Ramaprasad, 2013). But emotions play a very important part in our day-to-day living and decision-making.

The available research on rational and effective advertising is scattered and inconclusive. Research suggests that rational advertisements have an appeal in products meant for our well-being, like medicine, and emotional advertisements for things we desire, like clothes (Drolet, Williams & Laugeek, 2007). Drolet and his colleagues (2007) further suggest that young consumers prefer emotional advertisements for hedonic items (beer and cologne) and fact-based advertisements for utilitarian items (pain relievers and investment plans), however elder consumers have a preference for emotional advertisements in general. Though much was known about successful advertisements, not all advertisements were successful. Advertisements consume a substantial portion of a company’s budget. Failure to generate desired results proves to be costly. There was a need to test the effectiveness of an advertisement before launching it at a wider platform for a wider audience. Traditional research methods were unable to provide this platform. The platform to check the success of the advertisement in creating an impression in the mind of the consumer before launching it for the wider audience could only be apprehended by brain imaging techniques.

Memory is a function of encoding, storage and decoding information that has caught our attention. In marketing research, the role of memory in consumer decision-making has proved to be important time and again. The success of a business depends on successful marketing strategies. Successful marketing strategies in turn depend upon how well they are able to impress upon the consumers’ mind through advertisements. Success of advertisements depends on the ability of the consumer to retrieve information about a particular brand from a pool of similar competing brands. This is only possible when the advertisement is imprinted in the mind of the consumer. The field of cognitive neuroscience helps us develop a deeper understanding of the human brain in terms of perception, reasoning, decision-making, memory etc. Repeated failure to understand the consumer with the help of existing tools ended with the adoption of neuroscientific tools and techniques in marketing.

At a time when marketing research was looking for techniques to understand consumer behaviour better, neuroscientific tools and techniques were spreading their tentacles to different academic domains. Neuroscience was no longer restricted to the...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Preface
• 1 Introduction
• 2 Mapping the brain
• 3 Neuromarketing: an emerging interdisciplinary science
• 4 The Indian market and the Indian consumer
• 5 Risk analysis and future implication
• Author index
• Subject index