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Master Thesis

Title Maintaining Competitive Advantage in Consumer Markets by Using Neuroscience in Consumer Research

Author Irene Nehrkorn-Kayn

Degree Programme Business Administration

Aspired Degree Master of Business Administration University of Wales

Submitted on 14th September 2012


Declaration

Candidate Name:

Irene Nehrkorn-Kayn

Declaration This work has not previously been accepted in substance for any degree and is not being concurrently submitted in candidature for any degree.

Signed:

Date:

(Candidate) 14th September 2012

Statement 1 This thesis is the result of my own investigations, except where otherwise stated. Where correction services have been used the extent and nature of the correction is clearly marketed in a footnote.

Other sources are acknowledged by footnotes giving explicit references. A bibliography is appended.

(Candidate)

Signed:

Date:

14th September 2012

Statement 2 I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library loan, and for the title and summary to be made available to outside organisations.

(Candidate)

Signed:

Date:

14th September 2012

II


Acknowledgements I would like to take the opportunity to thank all those who accompanied me during the time of writing my Master Thesis. First of all, I am especially grateful to Professor Klaus Oestreicher who encouraged me to stay with the topic which I wanted from the very first beginning of my Degree Programme but was ready to turn down at some stage. Without him I would not have written about one of the most interesting topics in marketing – consumer neuroscience. Thanks also to Professor Oliver Platzeck who immediately accepted being my supervisor and who pushed me to always give my best. Special thanks also to Dr. Heinrich Raatschen who was my academic mentor and with whom I have often discussed issues of precise writing. A special thanks to both experts for their willingness to being interviewed for this research project and also to the online survey participants who contributed to the research by replying to the questionnaire. Particular thanks to my friend Inga Träger who managed all the technical details with regard to the online questionnaire. Also my friend and ‘Excel Hero’, Tom Smith, deserves my special thanks for helping me to refresh my Excel knowledge and for informing me about articles of interest on occasion. Thanks also to all my beloved friends who have not seen me for a long time. Thanks to my mother who encouraged me to take up the Degree Programme in the middle of the forties and who has always supported me. Thanks to my partner in life, Dieter, who backed me up and who has always been a patient listener when I was facing BPT – Blank Page Terror. And last but not least, I would like to thank my son, Alexander, who is the inspiration of my life and for whom I always wanted to be a role model. Good luck with your Master Thesis, Alex!!

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Abstract The increasing importance of the consumer as a key to a company’s sustainable competitive advantage presumes that gaining customer insight is becoming crucial in the challenging marketing environment of consumer markets. The study at hand investigates whether traditional consumer research should rely on neuroscientific findings enhancing consumer insight, eventually contributing to competitive advantage. The research pursues a two-fold approach: assessing the scientific relevance of consumer neuroscience for consumer research on the one hand and its appreciation in an economical context on the other. As each of its theses assesses a different aspect of consumer research, a preferably comprehensive discussion of the various marketingrelevant aspects is provided. Literature review reveals the (neuro)scientific implications from an academic viewpoint and illustrates the many starting points for consumer neuroscience to ameliorate consumer insight. It also reveals possibilities for enhancing brand communication with the relevant marketing-mix components and shows that consumer researchers have to correct long, but erroneously believed theoretical constructs requiring new approaches to the consumer. The appreciation of neuroscientific insights from managerial standpoint is explored by means of an online survey and semi-structured expert interviews. Data support the findings from literature research. They further add value to the research in so far the expert interviews discover a distinction between the use of neuroscience in a broader sense and brain imaging experiments in a narrower sense. The research shows that scholars and marketing professionals appreciate the use of neuroscience in consumer research and its contribution to competitive advantage but also reveals that there is still slight uncertainty among managers regarding its exact economical benefit. As the research reveals the main advantages and limitations of consumer neuroscience and as managers have to deal in a given economical context, resulting operational recommendations and suggestions for further investigations and procedures are provided.

Keywords: Advertising / Consumer Behaviour / Consumer Research / Marketing / Media / Consumer Neuroscience / Consumer Psychology

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Table of Contents Title ................................................................................................................. I Declaration .................................................................................................... II Acknowledgements ...................................................................................... III Abstract ......................................................................................................... IV Table of Contents ........................................................................................... V List of Figures ............................................................................................. VII List of Tables ..............................................................................................VIII List of Illustrations.....................................................................................VIII List of Abbreviations ..................................................................................... IX 1.

2.

Introduction ................................................................................................... 1 1.1

Brief Outline of Chapters ........................................................................ 1

1.2

Project Background ................................................................................ 4

1.2.1

Preliminary Scene Setting ................................................................... 7

1.2.2

Theses, Resulting Hypotheses & Research Question ........................... 10

1.3

Project Purpose .................................................................................... 11

1.4

The Results of the Project ..................................................................... 13

Literature Review ......................................................................................... 14 2.1

Achieving Competitive Advantage .......................................................... 14

2.2

The Traditional Approach to Consumer Research (CR) ............................ 17

2.2.1

Limitations of Traditional Consumer Research .................................... 21

2.2.2

Complementary Research Options ..................................................... 24

2.3

3.

Neuroscience – Theoretical Background ................................................. 26

2.3.1

Overview of Brain Structure .............................................................. 29

2.3.2

Brain Imaging Technologies .............................................................. 33

2.3.3

Neuroscientific Findings and Applications in Marketing ........................ 36

2.4

Options for Neuroscientific Contributions to CR ...................................... 40

2.5

Limitations of the Neuroscientific Approach ............................................ 53

2.6

Literature Review – Conclusions ............................................................ 57

Research Philosophy and Design ................................................................... 58 3.1

Philosophical and Strategic Approach..................................................... 58

3.2

Research Design .................................................................................. 60

3.2.1

Reliability ......................................................................................... 62

3.2.2

Validity ............................................................................................ 63

3.3 3.3.1

Measuring Instruments ......................................................................... 64 Online Survey .................................................................................. 65 V


3.3.2 3.4

4.

5.

Semi-Structured Expert Interviews .................................................... 66 Sampling, Administration and Data Collection ........................................ 67

3.4.1

Sampling ......................................................................................... 67

3.4.2

Administration and Data Collection .................................................... 74

Data Presentation and Analysis ..................................................................... 76 4.1

Introduction ......................................................................................... 76

4.2

Research Relevant Secondary & Primary Data ........................................ 79

Summary of Results and Triangulation .......................................................... 89 5.1

Summary of Results: Secondary Data .................................................... 89

5.2

Summary of Results: Online Survey ....................................................... 92

5.3

Summary of Results: Semi-Structured Interviews ................................... 94

5.4

Triangulation of Findings ...................................................................... 96

6.

Limitations of the Research ........................................................................... 99

7.

Discussion and Conclusion .......................................................................... 101

8.

Recommendations ...................................................................................... 105

References .................................................................................................... XI Bibliography ............................................................................................ XXIII List of Appendices .................................................................................... XXVI

VI


List of Figures Figure 1 Integrating Marketing Communications to Build Brand Equity....................... 5 Figure 2 Impact of Brands on Business Success ....................................................... 6 Figure 3 Porter’s Generic Value Chain .................................................................... 14 Figure 4 Ratio of Customer Value .......................................................................... 15 Figure 5 Cortical Areas According to Brodmann ...................................................... 31 Figure 6 Components of the Marketing Mix ............................................................ 44 Figure 7 Product development cycle ...................................................................... 46 Figure 8 The Brain – Point of Sale ......................................................................... 53 Figure 9 Deductive Versus Inductive Approach to Research .................................... 59 Figure 10 Sampling Techniques ............................................................................. 67 Figure 11 Statements Evaluating Consumer Markets............................................... 76 Figure 12 Determinants of Success in Consumer Markets........................................ 77 Figure 13 KPIs for Business Success in Consumer Markets ...................................... 78 Figure 14 Assessing Neuroscientific Contributions to Consumer Research ................ 79 Figure 15 Current Use of Neuroscientific Insights ................................................... 80 Figure 16 Potential Use of Neuroscientific Insights ................................................. 80 Figure 17 Areas of Use of Neuroscientific Insights .................................................. 81 Figure 18 Additional Areas of Use of Neuroscientific Insights ................................... 81 Figure 19 Issues Limiting the Use of Neuroscience ................................................. 82 Figure 20 Neuroscience and Competitive Advantage ............................................... 83 Figure 21 Sources of Gaining Neuroscientific Insights ............................................. 84 Figure 22 Future Resources to Gain Customer Insight ............................................ 85 Figure 23 Additional Future Resources to Gain Customer Insight ............................. 85 Figure 24 Ratio of Online Survey Participating Companies ....................................... 86 Figure 25 Ratio of Size of Online Survey Participating Companies ............................ 87 Figure 26 Ratio Position Holders of Online Survey Participating Companies .............. 87

VII


List of Tables Table 1 The Evolution and Transformation of Customers ........................................ 18 Table 2 Complementary Research Results and Conclusion ...................................... 25 Table 3 Basic Brain Structure and Functions – The Forebrain .................................. 29 Table 4 Basic Brain Structure and Functions – The Midbrain ................................... 30 Table 5 Basic Brain Structure and Functions – The Hindbrain .................................. 30 Table 6 Functional Areas of the Brain .................................................................... 31 Table 7 Overview of neuroimaging techniques – electrical activity ........................... 33 Table 8 Overview of neuroimaging techniques – metabolic activity .......................... 34 Table 9 Overview of fMRI-studies related to marketing issues ................................. 37 Table 10 Brain Brand – Brand Equity Measures ...................................................... 42 Table 11 Mixed Methods Research – Five Major Purposes ....................................... 61 Table 12 BRANDZTOP 100 Most Valuable Global Brands 2011 ............................ 69 Table 13 Media Agency Germany Billings 2010 ....................................................... 70 Table 14 Advertising Agency Germany Billings 2010 ............................................... 71 Table 15 Annual Management Consulting Rankings 2010/2011 ............................... 72 Table 16 Administration of Primary Research - Online Survey Questionnaire ............ 74 Table 17 Administration of Primary Research - Semi-Structured Expert Interviews ... 75 Table 18 Triangulation of Research Findings .......................................................... 97

List of Illustrations Illustration 1 The Difference Between Product and Brand ......................................... 4 Illustration 2 Product Attraction Revealed by QEEG Brain Scan ................................ 24

VIII


List of Abbreviations Ad

Advertisement

a.m.

above mentioned

BA

Brodmann Area

B.C.

Before Christ

BDT

Behavioural Decision Theory

BOLD

Blood Oxygenation Level Dependent

CEO

Chief Executive Officer

CR

Consumer Research

DAX

Deutscher Aktien Index [German Stock-Exchange Index]

EEG

Electroencephalography

EP

Experienced Pleasantness

FFA

Fusiform Face Area

fMRI

Functional Magnetic Resonance Imaging

FMCG

Fast Moving Consumer Goods

GDP

Gross Domestic Product

GfK

Gesellschaft f端r Konsumforschung [Consumer Research Association]

HFU

Hochschule f端r Unternehmensf端hrung

IAT

Implicit Association Test

KPI

Key Performance Indicator

MEG

Magnet Encephalography

mOFC

Medial orbitofrontal cortex

MPFC

Medial Prefrontal Cortex

NAcc

Nucleus Accumbens

Op-Ed

Opinion and editorial

PET

Positron- Emission-Tomography

P&G

Procter & Gamble

PLC

Product Life Cycle

PoS

Point of Sale

pwc

PricewaterhouseCoopers

QEEG

Quantitative Electroencephalography

R&D

Research & Development

RECMA

Research Company Evaluating the Media Agency Industry

ROI

Return On Investment

SM

Somatic Marker

IX


SMH

Somatic Marker Hypothesis

UK

United Kingdom

VMPFC

Ventro Medial Prefrontal Cortex

WTP

Willingness to Pay

X


1. Introduction 1.1 Brief Outline of Chapters At this stage, a brief outline of the chapters is presented to guide the reader through the logical stages of the project. Chapter 1 (Introduction) provides a brief introduction of the development of consumer markets to shed light on the current challenges of consumer research. It further illustrates some of the prevalent issues of today’s marketers to sensitize the reader to the necessity of ameliorating the approach to getting better insight into consumer behaviour. It then outlines the three central theses, the deriving hypothesis and a resulting research question by means of which the author investigates whether maintaining competitive advantage in consumer markets depends on integrating neuroscientific insights in consumer research. It further defines the purpose of the project by illustrating the three central theses, of which each is covering a certain aspect of today’s marketing issues in order to provide a preferably comprehensive discussion. The chapter concludes with a brief summary of the research findings.

Chapter 2 (Literature Review) provides a comprehensive literature review starting with the importance of achieving competitive advantage within today’s challenging consumer markets. It also gives insight into the main approaches of traditional consumer research and their limitations to then provide a first glance on options to enhance traditional research methods by neuroscientific insights. As it is worth delivering basic insights on neuroscience and its theoretical background, insights on brain structure and brain imaging technologies are presented subsequently, enhanced with study examples enabling the reader to better understand the scientific impact of cognitive neuroscience and how it is supposed to contribute to traditional consumer research. In the following, the three main theses are presented and – by means of several neuroscientific studies – it is discussed whether neuroscientific insights can contribute to prevalent marketing issues. Moreover, current limitations of consumer neuroscience are indicated. The literature review ends with a brief summary of the main findings.

Chapter 3 (Research Philosophy & Design) illustrates the philosophical approach to the research being executed under the label pragmatism with a deductive approach. It further outlines the research design as being descriptive-explanatory, choosing paral-

lel mixed methods research to better investigate the underlying reasons for given 1


facts. Aspects with regard to reliability and validity are taken up and triangulation is introduced offering a cross-check of consistency of quantitative and qualitative data. Moreover, the choice of measuring instruments – online survey (quantitative) and semi-structured expert interviews (qualitative) – and sampling are being justified. In the end data collection and administration are illustrated.

Chapter 4 (Data Presentation and Analysis) at first introduces the corroboration of secondary and primary data findings with regard to competitive advantage in consumer markets to provide a sound basis for further analysis. In subsequence the chapter illustrates the online survey results by means of graphical representations of the research findings including relevant expert statements resulting from the semistructured expert interviews and secondary data findings where appropriate.

Chapter 5 (Summary of Results & Triangulation) starts with a summary of literature research findings followed by a summary of the online survey questionnaire results and both semi-structured expert interviews. By presenting the findings from the different data sources the author refers to the relevant theses and to the research question in each case, elaborating whether theses and research question are being supported or not. The chapter concludes with a triangulation of findings investigating whether the results from different data sources show consistency.

Chapter 6 (Limitations of the Research) outlines the constraints the author, being also the researcher, had to face conducting the research, and the efforts she has undertaken in order to comply with highest research standards. With reference to the different steps of conducting research – especially to sampling, data collection and data processing – it is illustrated what the author has done to avoid constraints compromising the research findings and where there are still issues limiting reliability and/or validity of the research.

Chapter 7 (Discussion and Conclusion) takes up the research results and discusses them in the light of all relevant facts which have been investigated. It highlights the results with regard to each thesis and the research question by taking a critical look at astonishing aspects resulting from online survey data and expert interviews. In subsequence, by relating these aspects to relevant literature findings, the author questions statements and provides counter-arguments where appropriate. The chapter concludes with a short description of the prevalent status consumer neuroscience enjoys

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in the academic and managerial world.

Chapter 8 (Recommendations) provides suggestions for further steps to be taken by companies in consumer markets especially outlining operational solutions for discovered issues limiting the use of consumer neuroscience in an economical environment. In subsequence the chapter refers to perspectives how to better appreciate insights resulting from traditional consumer research and from consumer neuroscience. The chapter concludes with concrete proposals for further research approaches which have arisen during the research project and which could not be clarified by means of the present study.

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1.2 Project Background Wilkie and Moore (2003)1 describe marketing arketing has evolved from a production and disdi tribution oriented approach to a customer oriented one alongside with tremendous societal, political and technological changes and achievements during the last century. century Within the last 100 0 years markets markets have evolved from seller markets to buyer markets, from national markets to international markets to becoming The Global Market which not only implies substantial economical changes but also an increasing ncreasing competitive environment. This is accompanied, inter alia, by more demanding consumers who want product offerings to possess the right value standard they are longing for. for As a consequence, especially companies in the challenging consumer market have not only to satisfy but to surpass consumers’ needs in order to maintain sustainable competicompet tive advantage. Likewise, Likewise the he consumer has evolved from being perceptive to being interactive, i.e. Prahalad and Ramaswamy (2001)2 state in the 21st Century the consumer is even involved in co-creating co new products. In line with this, the t marketingmix has evolved from 4Ps to 7Ps enhanced by people, process and physical evidence evi to cope with the various challenges the prevailing marketing environment reflects. Today, brands are calling for intimate attention. attention Products are sold – brands are bought. Hence nce products have evolved to brands. brands The difference between product and brand is pictured in illustration 1. Illustration 1 The Difference Between Product and Brand

Source: own design – adidas® adapted from sporteo.de3

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Wilkie, W.L., Moore, E.S., Scholarly Research in Marketing: Exploring the “4 Eras” of Thought DevelopDevelo ment, Journal of Public Policy & Marketing, 2003, Volume 22 (2), (pp. 116-146) 2 Prahalad,, C.K., Ramaswamy, V., (2001) Co-opting Customer Competence, in: Harvard Business Review on Customer Relationship Management (ed), Harvard Business School Publishing Corporation, Boston, MassaMass chusetts, 2001, (p. 4) 3 Sporteo.de porteo.de [Online] available from http://www.spoteo.de/pics/products/9/g_adidas-teamgeist.jpg teamgeist.jpg [accessed 15th January 2012]

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Kotler et al (2009)4 suggest by linking brands to people, places, events, experience, experience and the like, marketing communications help to establish brand equity which is considered as an important KPI indicating brand performance resulting from a sustainable consumer-brand-relationship. relationship. They suggest brand equity is achieved by sending conco sistent messages to the consumer as a well concerted process (figure 1)).

Figure 1 Integrating Marketing Communications to Build Brand Equity Equ

Source: Kotler et al (2009)5 Marketing Management c and Besides,, a recent study from PWC et al (2012)6 among the Top 100 companies members embers of the Trade Mark Association (GfK) in Germany reveals that brand equity is considered as one of the crucial elements contributing to sustainable business success (figure 2).

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Kotler et al, Marketing Management, Pearson Education Ltd., Harlow, UK, 2009,, ( p. 692) Ibid, (p. 693) 6 PricewaterhouseCoopers et al, Markenstudie 2012, [Brand Study 2012], [Online] Available from http://www.markenverband.de/ http://www.markenverband.de/publikationen/studien/Markenstudie2012.pdf [Accessed 5th April 2012] 5

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Figure 2 Impact of Brands on Business Success

Source: PricewaterhouseCoopers et al (2012)7 Brand Survey 2012

Hence companies wanting to be successful have to enhance brand equity continucontin ously. Still, Quartz and Asp (2005)8 alert brand equity stems from how consumers experience and perceive a brand rather than from pure financially financially driven intellectual property. Besides, according to Yankelovich Research (2007)9, advertising clutter is exploding resulting in an ordinary consumer being exposed to more than 5,000 ad messages per day. But simply overexposing the consumer to more and more marketing communicacommunic tion messages does not necessarily necessari help to raise brand engagement and increase sales figures. This means, means building brands that satisfy consumers’ needs and wants profitably presupposes to gain better insight into consumer behaviour.

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PricewaterhouseCoopers et al, Markenstudie 2012, [Brand Study 2012], [Online] Available from http://www.markenverband.de/publikationen/studien/Markenstudie2012.pdf www.markenverband.de/publikationen/studien/Markenstudie2012.pdf [Accessed 5th April 2012] 8 Quartz, S., Asp, A., Brain branding – brands on the brain, Social Cognitive Neuroscience Laboratory, CaliCal fornia Institute of Technology, USA, In: The ESOMAR Annual Annual Congress, Cannes, September 2005, (p. 1) 9 Story, L., Anywhere the eye can see, it’s likely to see an Ad, New York Times, January 15, 2007 [Online] Available from: http://www.nytimes.com/2007/01/15/business/media/15everywhere.html [Accessed 15th January 2012]

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1.2.1 Preliminary Scene Setting Drucker (2001: pp. 20 and 24)10 states “there is only one valid definition of business

purpose: to create a customer” adding that companies have to start with “the customer’s realities, his situation, his behavior, his expectations, and his values.” Especially in today’s mature markets in the consumer industry creating customer value is the key to achieving sustainable competitive advantage. The growing competitive environment is forcing marketers to get deeper insight into consumer buying behaviour in order to better investigate their actual needs and wants and motivations to buy. Moreover, due to shorter PLCs, it is more essential than ever to meet consumers’ requirements as there is not too much time to gain most profit out of a product nowadays.

Still, besides traditional consumer research methods are more sophisticated today, and ad expenditure is constantly growing, flop rates of consumer products are high – depending on the study at hand approx. 70% (Serviceplan: 2006)11 to 80% (Haig: 2011)12 of products launched fail within the first five years. At the same time, traditional consumer research has revealed its limitations – i.e. focus group and survey findings may be biased by several circumstances. Zaltman (2003)13 for instance describes that simply the sequence in which survey questions are posed can have a decisive impact on the answers provided. Reimann et al (2011: p. 611)14 state that the

“self-assessment measures commonly used in consumer research rely on the ability and willingness of the respondents to accurately report their attitudes or prior behaviors.” Moreover, insights from traditional consumer research do not seem to describe consumers’ needs to a full extent as they are focussing on the conscious aspects of decision-making. However, Lakoff and Johnson (1999: p. 13)15 state that approximately 95% of our mental activity takes place in the cognitive subconscious which is supposed to be the conceptual system in which all of our knowledge and beliefs are framed and which “functions like a ‘hidden hand’ that shapes how we conceptualise all

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Drucker, P, F., The Essential Drucker, HarperCollins Publishers, New York, 2001 See also: Serviceplan’s Press Release on the results of the 2006 study on Flop Rates on FMCGs in Germany [online] available from http://presse.serviceplan.de/uploads/tx_sppresse/301.pdf [Accessed 15th January 2012] 12 Haig, M., BRAND FAILURES The Truth About the 100 Biggest Branding Mistakes of All Time, 2nd Edition, Kogan Page, London, 2011, (p. 6) 13 Zaltman, G., HOW CUSTOMERS THINK Essential Insights into the Mind of the Market, Harvard Business School Press, Boston, Massachusetts, 2003, (p. 12) 14 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application, Psychology & Marketing, June 2011, Vol. 28 Issue 6 (pp. 608-637) 15 Lakoff, G., Johnson, M., PHILOSOPHY IN THE FLESH The Embodied Mind And Its Challenge To Western Thought, Basic Books, New York, 1999 11

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aspects of our experience.” In line with this, Zaltman (2003: pp. 16-17)16 complains most of the research findings such as “demographic data, purchase intent, and attrib-

ute preferences”, only cover surface-level information about consumers suggesting “without knowing consumers’ hidden thoughts and feelings and the forces behind them – marketers can’t accurately anticipate consumers’ responses ... .” Furthermore, as a study from Sethuraman et al (2010)17 on advertising elasticity reveals, it is doubtful whether ubiquitous advertising reaches consumers as the study suggests “there

has been a decline of advertising elasticity over time” (Sethuraman et al 2010: p. 1)18 meanwhile ad exposure has extensively increased.

It becomes obvious that exploring economic decision-making with traditional selfassessment measures neither reflects the entire basis of human mental activity, nor is reliable due to the many biases which can occur. This raises the question how to explore what kind of marketing and communications really do elicit brand awareness, brand recall, brand preference, and brand loyalty, and how to fully explore the mental events which motivate consumers to choose one brand over the other.

Neurobiological findings and the relevant brain imaging technologies have revealed that physiological aspects and somatic variables should also be considered as crucial determinants in economic decision-making. Hubert (2010)19 points to the arbitrariness of set boundaries between psychological and physiological categories and urges for a redefinition of the concept of emotion. Damasio (1994)20 has described studies with patients suffering from brain defects which show that well-reasoned decisions depend on the ability to intersect reasoning/decision-making with emotion/feeling and the receipt of bodily states. As economic decision-making has long been considered erroneously as a well-reasoned rational cognitive process of a so-called homo

oeconomicus Kenning and Plassmann (2005: p. 344)21 suggest, from a neuroscientific viewpoint, its counterpart was the “homo neurobiologicus whose behaviour and social

and economic nature are the result of neurobiology.”

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Zaltman, G., HOW CUSTOMERS THINK Essential Insights into the Mind of the Market, Harvard Business School Press, Boston, Massachusetts, 2003 17 Sethuraman et al, How Well Does Advertising Work? Generalizations from Meta-analysis of Brand Advertising Elasticities, Journal of Marketing Research, Postprint 2010, American Marketing Association (pp. 1-38) 18 Ibid 19 Hubert, M., Does neuroeconomics give an impetus to economic and consumer research?, Journal of Economic Psychology, October 2010, Vol. 31 Issue 5, (p. 812) 20 Damasio, A., Descartes’ Error: Emotion, Reason and the Human Brain, 1994, Revised Edition, Vintage Random House, London, 2006, (p. 70) 21 Kenning, P., Plassmann, H., NeuroEconomics: An overview from an economic perspective, Brain Research Bulletin 67, 2005, (pp. 343–354)

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Perrachione and Perrachione (2008)22 define cognitive neuroscience as a branch of neuroscience which explores the neural mechanisms underlying complex cognitive processes such as reasoning, decision-making, emotion and memory. Thus, neuroscientific imaging technologies (i.e. fMRI) shall help to investigate subconscious processes like integrating emotions into decision-making. In line with this, Reimann et al (2011: p. 611)23 emphasise “since fMRI does not rely on verbal information from the

respondent, it circumnavigates cognitive biases.” As a result, Hubert and Kenning (2008: p. 274)24 argue “this may in turn help to improve companies’ actions, for ex-

ample, marketing responses that are based on a better satisfaction of unconscious emotional consumer needs.”

22 Perrachione, T., K., Perrachione, J., R., Brains and brands: Developing mutually informative research in neuroscience and marketing, Journal of Consumer Behaviour, July-October 2008, No. 7, (p. 304) 23 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application,

Psychology & Marketing, June 2011, Vol. 28 Issue 6, (pp. 608-637) Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (pp. 272-292) 24

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1.2.2 Theses, Resulting Hypotheses & Research Question Cervantes et al (2008: p. 1)25 get to the heart of the issue saying “nowadays, the

consumer represents the market’s only ‘superpower’.” Hence today creating customer value is the key to achieving sustainable competitive advantage. So it becomes obvious that consumer researchers have to acknowledge the paradigm shift resulting from recent neurobiological findings directly leading to theses 1 to 3, the deriving hypothesis and the research question:

Thesis 1: As salient brands are the winners of today’s competition, companies that want their brands being successful have to attract consumers’ emotions to elicit a sustainable consumer-brand-relationship. Neuroscientific insights shed light on how consumers’ emotions respond to brands thus helping to enhance brand equity.

Thesis 2: Insights from neuroscience can help to achieve a holistic approach regarding consumers’ mental activities and responses concerning the marketing-mix thus providing marketers with better clues for brand positioning.

Thesis 3: Traditional consumer research is a multidisciplinary discipline and marketing and advertising rely on its diverse approaches and the corresponding theories. Neuroscientific insights can help to see if long held assumptions hold true or if they have to be adjusted to better approach consumer insight.

The deriving hypothesis is: Without including neuroscientific insights into marketing and consumer research, companies in the consumer market will lose competitive advantage.

The resulting research question is: Is using neuroscience in consumer research a precondition for companies in the consumer market to maintain sustainable competitive advantage?

25 Cervantes et al, The secrets of neuromarketing – reading consumers’ minds, In: The ESOMAR Latin America Conference, Mexico City, May 2008, European Association of Communications Agencies

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1.3 Project Purpose Despite the sophisticated and multidisciplinary approach of today’s traditional consumer research Schneider and Hall (2011)26 state, approximately 75% of consumer and retail products do not earn US$ 7.5 million during their first year, and not even 3% of them exceed US$ 50 million first-year sales being considered as a benchmark for a successful product launch. Further to AdvertisingAge (2011)27, referring to Kantar Media data, alone P&G – the biggest US advertiser – spent 3.1 billion US$ on advertising which equals almost 2.4% of total US ad expenditure of US$ 131.1 billion in 2010. Thus, depending on the competitiveness and magnitude of a company, product flops do not only affect a business’ financial resources, but also can have a decisive impact on its competitive advantage. Moreover, JP Morgan’s (2009)28 figures on advertising and marketing emphasise high economic relevance as ad expenditure – depending on the definition – equals about 1% to 3% of the US GDP (average spending is 2.1% since 1950) which – as the world’s largest market – accounts for approx. 45% of global ad expenditure.

On the basis of theses 1 to 3 the research target is to investigate if neuroscientific insights can contribute to valuable marketing and consumer research insights regarded as a precondition for a company’s sustainable economic success. Thesis 1 is directed to the point how to increase brand engagement and shall investigate if neuroscientific insights help to address consumers’ emotions more purposeful which in turn is supposed to enhance brand equity. Thesis 2 postulates the added value of neuroscience to the marketing-mix. Thus, the research focuses on investigating how insights with regard to the Ps support a holistic consumer understanding being considered as crucial for proper brand positioning. Thesis 3 assumes that neuroscientific insights have the capability to question theoretical constructs acknowledged by traditional consumer research and therewith help to adapt assumptions on consumer behaviour to eventually ameliorate consumer understanding.

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Schneider, J., Hall, J., Why Most Product Launches Fail, Harvard Business Review, April 2011, Vol. 89, Issue 4 (p. 21) AdvertisingAge, U.S. Ad Spending Grew 6.5% in 2010 as Auto Surged and Pharma Hit a Low, March 17, 2011, [Online] Available from http://adage.com/article/mediaworks/u-s-ad-spending-grew-6-5-2010-autorose-pharma-fell/149436/ [Accessed 15th January 2012] 28 JP Morgan, North America Equity Research, Advertising & Marketing Services, Advertising 101: A Primer with a Focus on Macro Trends, 02. April 2009, (pp. 9 and 11) [Online] Available from http://s3.amazonaws.com/zanran_storage/www.adweek.com/ContentPages/110487574.pdf [Accessed 15th January 2012] 27

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By means of theses 1-3 – developed to investigate different aspects of marketing and consumer research – the purpose of the project is to verify or falsify the assumption that today’s marketers and researchers in the consumer market have to include recent, state-of-the-art research such as neuroscientific findings to maintain competitive advantage. Although Kotler et al (2009)29 emphasise that consumer markets and business markets have a lot in common (i.e. customer value is paramount), there are a lot of differences in attracting them. Discussing them here would go beyond the scope of the project. As a consequence, the research project is focused on the consumer market.

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Kotler et al, Marketing Management, Pearson Education Ltd., Harlow, UK, 2009, ( pp. 268-272)

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1.4 The Results of the Project Research results from secondary and primary data suggest that consumer neuroscience is considered to being vital for maintaining competitive advantage in the consumer market. Whereas secondary data especially reveal in detail the many options to ameliorate the approach to consumers’ mental states in the different economic research contexts (thesis 1-3), primary data findings predominantly confirm that the use of consumer neuroscience is already in practice and that the insights are also appreciated from a managerial viewpoint. However, survey findings also reveal that the economic benefit is still somewhat unclear for managers acting in the business environment of consumer markets. Moreover, and to the surprise of the author, the interviewees make a clear distinction between the integration of basic neuroscientific insights, and the use of neuroscientific brain imaging experiments in daily business. Whereas the first is unambiguously considered as a crucial precondition for maintaining competitive advantage, the latter is rather regarded to be left to the research efforts of academic scientists.

Going into detail, findings show consistency regarding thesis 1 in so far secondary and primary data confirm the contribution of consumer neuroscience to enhance the understanding of consumers’ emotions in a socio-economical context – being defined as a precondition for eventually enhancing brand equity. With reference to thesis 2 – considering neuroscientific insights in the light of the various communication approaches of the marketing-mix – secondary, and also survey data appreciate the many starting points enhancing communication with reference to the Ps by means of neuroscientific imaging studies, whereas experts rather prefer to rely on basic neuroscientific research. Coming to thesis 3 secondary data provide evidence that new insights from neuroscience have already challenged erroneously believed theoretical constructs of consumer researchers thus confirming that new approaches to the consumer are required. Also the interviewees approve that theoretical constructs of traditional consumer research have to constantly being questioned by means of neuroscience.

All in all, the research results provide a decent understanding of the actual situation regarding consumer neuroscience and its appreciation within the academic and the managerial world. Moreover, the research adds value to the discussion in so far it also identifies necessary starting points for further investigations. . 13


2. Literature Review 2.1 Achieving Competitive Advantage The role of the consumer has constantly evolved within the past 25 years. Marketing has gone from an understanding to sell products to consumers to the much more advanced idea of involving them into product development and innovation in order to create a sustainable consumer-brand-relationship. consumer Porter (1985)30 states competitive advantage results from the value a company is able to create for its buyers which does not exceed the costs of creating it. He suggests the generic value chain (figure 3) as a strategic approach adding that “differences

among competitor value chains are a key source of competitive advantage� (Porter 1985: p. 36).31 Figure 3 Porter’s Generic Value Chain

Source: Porter (1985)32 Competitive Advantage

This view has been brought up from the viewpoint of strategic management and ini volves that superior execution of targeted parts of the value chain will automatically lead to creating competitive advantage. However, as the customer is considered to be at the very heart of competitive advantage, it lacks the notion of unconscious aspects

30

Porter, M., E., Competitive itive Advantage, (1985), First Free Press Export Edition, Free Press, New York, 2004 (p. 3) 31 Ibid (p. 36) 32 Ibid (p. 37)

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of consumers’ mental activities. It is rather directed to consumers’ conscious percepperce tions of product value and induces Christopher (1996: p. 58)33 to state customer custome value can be achieved by “improving the perceived benefits and/or reducing the total costs

of ownership” resulting in a simple ratio (figure 4). Figure 4 Ratio of Customer Value

Source: Christopher (1996)34 From brand values to customer value This correlates with Porter (1980: p. 121)35 stating it is important to “redefine the way

the buyer thinks about the product’s function” suggesting “widening the basis of buybu ers’ choice requires a combination of effective marketing marketing on this basis and product development that supports the story convincingly.” However, this implies the assumpassum tion that buying decisions only rely on theoretical constructs i.e. the well-reasoned well rational thinking of a homo oeconomicus. Christopher (1996)36 even suggests that consumers prefer tangible benefits rather than emotionally based intangible benefits, the latter being considered as overestimated by marketers in the last quarter of the 20th Century. However,, recent neurobiological findings encourage encourage Hubert (2010)37 to emphasise that buying decisions also embrace physiological aspects and somatic varivar ables.

While the strategic impact of ameliorating the value chain cannot be denied, it is doubtful whether improving tangible aspects (in this case considered ered as rational-based rational benefits such as utility) utility i.e. availability and function,, eventually lead to customer value. If we consider Apple® for example, whose customers – referring to Trojanovski (2011)38 – were patiently waiting in long queues for the new iPhone 4S, even facing problems with activating their devices, it can be assumed that in this case neither 33

Christopher, M., From brand values to customer value, Journal of Marketing Practice: Applied Marketing Science, 1996, Vol. 2 No. 1, (pp. (p 55-66) 34 Ibid, (p. 58) 35 Porter, M., E., Competitive Strategy, (1980), First Free Press Export Edition, Free Press, New York, 2004 36 Christopher, M., From brand values to customer value, Journal of Marketing Practice: Applied Marketing Science, 1996, Vol. 2 No. 1, (p. 60) 37 Hubert, M., Does neuroeconomics give an impetus to economic and consumer research?, Journal of Economic Psychology, October 2010, Vol. 31 Issue 5, (p. 812) 38 Troianovski, A., Sprint Jumps Into iPhone Frenzy, THE WALLSTREET JOURNAL, October 15, 2011, [Online] Available from http://online.wsj.com/article/SB10001424052970204002304576629413133310144.html [Accessed 24th January 2012]

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availability, nor function arouses customer value. But how then to approach competitive advantage in today’s challenging consumer markets? P&G (2012)39 – the leading US consumer goods manufacturer – i.e. defines “consumer knowledge; innovation;

brand- building; go-to-market capabilities and scale” as critical to winning in the consumer products industry. This goes in line with Chandy and Tellis (2000: p. 4)40 suggesting “customer knowledge, customer franchise, and market power” are some of the ingredients for successful radical innovations serving consumers’ needs to a full extent. Accordingly, Huston and Sakkab (2006: p. 3)41 cite P&G’s CEO, A.G. Lafley, explaining that P&G, with its connect and develop innovation programme, attempts to achieving “a clear sense of consumer’s needs”. In addition, matching consumers’ needs and wants is accepted as extremely important in today’s mature consumer markets with constantly shortening PLCs. Kotler et al (2009: p. 492)42 emphasise

“speeding up innovation time is essential in an age of shortening product life cycles” adding success predominantly derives from adapting quickly to market changes and managing innovations successfully, eventually resulting in a product’s dominant perception – which today means a salient brand. Although Porter (1985: p. xvii)43 states competitive advantage arises “from many

sources, and shows how all advantage can be connected to specific activities” it is still customer value which is considered as the centrepiece of importance. Hence competitive advantage derives from the ability how a company really understands what the customer values. Considering all this it becomes obvious that consumer research plays a crucial role in achieving customer insight eventually leading to sustainable competitive advantage. The understanding so far is that neuroscience can contribute decisively to enhance customer insight by integrating knowledge on mental states which do not reflect sheer rational thinking, but also unconscious states of mental, emotional and bodily states which finally contribute to decision-making.

39 Procter & Gamble, Company Strategy – Strategic Focus, [Online] Available from http://www.pg.com/en_US/investors/company_strategy.shtml [Accessed 21st January 2012] 40 Chandy, R.K., Tellis, G.J., The Incumbent’s Curse? Incumbency, Size, and Radical Product Innovation, Journal of Marketing Research, July 2000, Vol. 64, (pp. 1-17) 41 Huston, L, Sakkab, N., Inside Procter & Gamble’s New Model for Innovation, Harvard Business Review, March 2006, (p. 1-8) 42 Kotler et al, Marketing Management, Pearson Education Ltd., Harlow, UK, 2009 43 Porter, M., E., Competitive Advantage, (1985), First Free Press Export Edition, Free Press, New York, 2004

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2.2 The Traditional Approach to Consumer Research (CR) Already with the emerging complexity of the growing mass markets in the 1950ties management science – i.e. marketing – started to incorporate qualitative and behavioural sciences to enhance empirical research methods. The approaches of management science and behavioural science appreciated their basic understanding of scientific methods and their underlying disciplines which resulted in a trans-disciplinary approach towards the prevailing research questions in CR. Moreover, with the raise of computer technology and the reliance on mathematics and statistics, marketers were able to significantly enhance their scientific research methods (Wilkie and Moore: 2003)44. As a matter of fact, Simonson et al (2001: p. 251)45 state “consumer behav-

iour is too complex to be meaningfully captured in a single model.” Hence, traditional consumer research has become a multidisciplinary academic discipline including psychology, sociology, (behavioural) economics, communications, anthropology, and the like, to gain insight into consumers’ buying behaviour and decision-making processes with different approaches (i.e. socio-demographics, cognitive topics, typologies, behavioural aspects i.e. conditioning and learning, information processing and communication models).

Parallel to this, as illustrated in table 1, the role of the consumer has constantly evolved from being considered as a simple statistics in the early 1970ties to being accepted as a vivid partner and co-creator of products beyond 2000 (Prahalad and Ramaswamy: 2001)46.

44

Wilkie, W., L., Moore, E. S., Scholarly Research in Marketing: Exploring the “4 Eras” of Thought Development, Journal of Public Policy & Marketing, 2003, Volume 22 (2), (pp. 125-126) 45 Simonson et al, CONSUMER RESEARCH: In Search of Identity, Annual Review of Psychology 2001, No. 52, (pp. 249-275) Prahalad, C.K., Ramaswamy, V., (2001) Co-opting Customer Competence, in: Harvard Business Review on Customer Relationship Management (ed), Harvard Business School Publishing Corporation, Boston, Massachusetts, 2001, (pp. 3-4) 46

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Table 1 The Evolution and Transformation of Customers Cu

Source: Prahalad and Ramaswamy (2001)47 Co-opting opting Consumer Competence

These developments imply that CR has constantly undergone (and and still undergoes) undergoes multidisciplinary influences correlating with the respective predominant academic rer search foci of the time. A study from Simonson et al (2001)48 reveals that prevalent social topics in the 1970s and 1980s (i.e. age, gender, generation, nationality, educaeduc tion, social class, and so forth) have undergone a decline when researchers in psyps chology started focussing on the more cognitive aspects of decision making such as cognitive elaboration, variety seeking, and preconscious processing. However, with the cultural ural and ethnic diversity in consumer markets, markets arising through globalisation and migration, and with deeper insights into gender differences, parts of the social topics experienced a kind of ‘revival’ in the late 1980s.

47

Prahalad, C.K., Ramaswamy, V., (2001) Co-opting Co Customer Competence, in: Harvard Business Review on Customer Relationship Management (ed), Harvard Business School Publishing Corporation, Boston, Massachusetts, 2001, (p. 4) 48 Simonson et al, Consumer Research: In Search of Identity, Annual Review of Psychology 2001, No. 52, (pp. 249–275)

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As consumer researchers in marketing are especially interested in aspects of brand judgement and choice, research findings of Behavioural Decision Theory (BDT) have subsequently become of special interest, as decision rules and heuristics of decisionmaking are considered to being crucial for judgements and purchasing decisions (Simonson et al: 2001)49, (Tversky and Kahneman: 1974)50. Within BDT then, the socalled cold aspects of consumer behaviour i.e. beliefs, attitude formation, and so forth, have become less relevant when BDT researchers started studying the so-called

hot aspects i.e. arousal, regret, conflict – all emotional aspects started to being also considered as decisive in consumer decision-making. Bettman (1993: p. 8)51 already states with the hot aspects consumer research has to also consider “the effects of

invoking autobiographical memories via marketing stimuli... .” This correlates with Damasio’s somatic marker hypothesis (SMH) considering autobiographical memories as important for initiating so-called gut feelings, which are said to have a strong influence on decision-making in so far they force attention on negative or positive decision results of the past and thus “provide an automated detection of the scenario compo-

nents which are more likely to be relevant” for future decisions (Damasio 1994: pp. 174-175)52. Still Damasio (1994: p. 260)53, as a seminal Professor of Neuroscience, Neurology and Psychology who has gained detailed neurological insights of the contribution of different brain areas to decision-making, states “to understand in a satisfac-

tory manner the brain that fabricates human mind and human behaviour, it is necessary to take into account its social and cultural context.” It is widely acknowledged that socio-demographic and psychographic aspects, insights from BDT, and so forth, contribute to improving consumer understanding. Hence, explaining them would go beyond the scope of the project. However, Simonson et al (2001: p. 267)54 alert as CR is “such a broad area in which the central topics are

shared with other fields and disciplines, it is particularly susceptible to division and disagreement regarding key research topics and how research should be conducted.”

49

Simonson et al, Consumer Research: In Search of Identity, Annual Review of Psychology 2001, No. 52, (pp. 249–275) 50 Tversky, A., Kahneman, D., Judgement under Uncertainty: Heuristics and Biases, Science, New Series, September 1974, Vol. 185, No. 4157, (pp. 1124-1131) 51 Bettman, J.R., FELLOW'S AWARD SPEECH The Decision Maker Who Came In from the Cold, Advances in Consumer Research, 1993, Volume 20, No. 1, (pp. 7-11) 52 Damasio, A., Descartes’ Error: Emotion, Reason and the Human Brain, 1994, Revised Edition, Vintage Random House, London, 2006 53 Ibid 54 Simonson et al, Consumer Research: In Search of Identity, Annual Review of Psychology 2001, No. 52, (pp. 249–275)

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Respectively, Simonson et al (2001)55 point to the two-fold approach of CR i.e. the

positivist approach which is aimed at theory testing and the issue-driven research which investigates issues of interest in their own right alerting, both areas should coexist and even cooperate to yield maximum consumer insight. Thus, it becomes clear that researchers do need to be open-minded and have to integrate insights from different scientific fields to eventually gain a holistic understanding of consumer behaviour – especially as we are far beyond the ages of mass marketing so that the consumer has to be tackled on a more individual basis.

Anyhow, what all these approaches have in common is that they rely on theoretical constructs what induces Hubert and Kenning (2008: p. 273)56 to argue “classical con-

sumer research has seen the human organism figuratively as a ‘black box’, into which investigators could not gain direct insights. Instead, they had to use theoretical constructs in order to explain human behaviour.” Hence they suggest that “with the help of advanced techniques of neurology, which are applied in the field of consumer neuroscience, a more direct view into the ‘black box’ of the organism should be feasible” (Hubert and Kenning 2008: p. 272)57.

55

Simonson et al, Consumer Research: In Search of Identity, Annual Review of Psychology 2001, No. 52, (265-267) 56 Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (pp. 272-292) 57 Ibid

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2.2.1 Limitations of Traditional Consumer Research While traditional consumer research has various data collection systems, quantitative research methods and tools, as well as qualitative and observational methods at its hand, Zaltman (1997: p. 424)58 urges to “rethink basic assumptions about thought

and behaviour that underlie existing research methods” to focus more on emotions. Notably he complains that there is still a bias towards reason although the importance of emotions in decision-making is widely acknowledged. Though in the meantime the focus towards emotions and affective processes has inevitably increased within CR, traditional research methods such as interviews, focus groups, and observations lack bias-free insight on consumer behaviour for several reasons. Hence Zaltman (1997: p. 426)59 citing LeDoux (1996: p. 32) saying “we have to be very careful when we use

verbal reports based on introspective analyses of one's own mind as scientific data” highlights one of today’s main issues in consumer research. Besides, Camerer et al (2005)60 suggest humans’ impossibility to access affective processes (which predominantly occur in the subconscious) leads to overestimating the contribution of cognitive processes in decision-making. These cognitive processes however are subject to self-perception and social control. Hence Camerer et al (2005)61 point to the fact that people often misinterpret introspection and even deny to be biased. I.e. they report the observance that job applications from WhiteAmericans are by 50% more likely to result in an interview than from AfricanAmericans. Such biases are often denied by people being interviewed because of political incorrectness and clearly point to the ‘focus group dilemma’ where people often tend to say things to either meet group expectations or to please interviewers. Hence Kjaergaard (2008)62 cites Professor Gemma Calvert of Bath University in the UK in his article seeing problems with focus groups in so far “People affect each other – and

they affect each other’s answers” adding “Perhaps you get the answer you would like to hear – but it is not necessarily the truth. Perhaps people just say what they believe they think, or perhaps they find it unpleasant to say what they really think.”

58 Zaltman, G., Rethinking Market Research: Putting People Back In, Journal of Marketing Research, November 1997, Vol. 34, (pp. 424-437) 59 Ibid 60 Camerer et al, Neuroeconomics: How Neuroscience Can Inform Economics, Journal of Economic Literature, March 2005, Vol. XLIII, (p. 37) 61 Ibid (p. 38) 62 Kjaergaard, I., ADVERTISING TO THE BRAIN, Focus Denmark 04/2008, Ministry of Foreign Affairs of Denmark, [Online] Available from http://www.netpublikationer.dk/um/9229/html/chapter09.htm [Accessed 22nd March 2012]

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That biases occur in answering survey questionnaires is vividly demonstrated in a study carried out by Professor Calvert being published by Martin Lindstrom (2008)63 in his book buyology. Calvert combined traditional quantitative research questionnaires with an fMRI study showing the test persons’ actual brain activation in order to investigate, if warnings on cigarette packages affect smokers’ behaviour. Saying first, it is widely assumed that warnings on cigarette packages induce certain avoidance of nicotine by nicotine-addicted persons. But while the interviewees thought they were prevented from smoking by these warnings and answered the questionnaire accordingly, the fMRI results draw a completely different picture, namely that instead the ‘craving spot’ (nucleus accumbens) in the brain was attracted which resulted in encouraging smokers to light-up (Lindstrom: 2008)64. Hence the questionnaire results draw a completely different picture compared to the brain results, Calvert comments in Kjaergard’s (2008)65 corresponding article “it is not enough just to ask people, we must

also ask the brain.” Already Nelson (2002)66 points to the fact that today’s consumer decision-making results from a mixture of media intervention, academia, and pressure groups – all having increased by far within the last years. But as decision-making depends on various interwoven processes depending on many internal and external influences, consumer research needs to gain better insight which processes do affect what kind of action. Hence, besides actions are taken on the basis of neuronal states (internal implications) they are also embedded in the socio-cultural context of consumers’ life (external implications). A study from Wells and Petty (1980)67 which pretended to test headphones in effect wanted to investigate the implications of vertical and horizontal head movements on preference. They instructed seventy-two students to either move their heads vertically or horizontally while being exposed to a radio broadcast. The study revealed that those with the vertical head movement agreed more with the editorial content than those with horizontal head movement. Hence they concluded this bias probably occurs because in Western countries vertical head movement is culturally associated with acceptance. 63

Lindstrom, M. , buyology Truth and Lies about why we Buy, Random House Inc., New York, 2008, (pp. 12-15) 64 Ibid 65 Kjaergaard, I., ADVERTISING TO THE BRAIN, Focus Denmark 04/2008, Ministry of Foreign Affairs of Denmark, [Online] Available from http://www.netpublikationer.dk/um/9229/html/chapter09.htm [Accessed 22nd March 2012] 66 Nelson, W., All Power to the Consumer? Complexity and Choice in Consumer’s Lives, Journal of Consumer Behaviour, Dec. 2002, Vol. 2 Issue 2 (p. 190) 67 Wells, G.L., Petty, R.E., The Effects of Overt Head Movements on Persuasion: Compatibility and Incompatibility of Resources, Basic and Applied Social Psychology, 1980, 1 (3), (pp. 219-230)

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The examples show how behaviour is biased either by the implications of social desirability, socio-cultural context, and the implication that most of brain activity which contributes to decision-making is taking place in the brain’s ‘black box’ – the inaccessible subconscious. All in all, as decisions depend on the interrelation of cognitive processing and affect processes (which predominantly occur subconsciously), this induces the question if – with today’s knowledge of brain functioning and the revealed limitations of traditional CR – it should not be considered to also explore the brain to get real insight on consumer behaviour.

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2.2.2 Complementary Research Options To avoid possible biases during consumer research experiments and to reduce flawed conclusions from study outcomes McPhee and Laybourne (2007)68 suggest the synergetic use of qualitative research and neuroscience. They described an ethnographic field experiment (observation, in-depth in interviews) combined with neuroscience roscience (brain scans) in a study taking two Essex girls shopping. shopping The girls, Nicki and Tracy, being equipped with QEEG sensors and eye-cam eye glasses,, were instructed to shop in a mall being exposed to the researchers’ ‘three-dimensional’ investigation. While W shopping around the two girls were observed, being brain-scanned brain in parallel, to having an inin depth interview afterwards. Interestingly, a brain scan in one of the shops shows show Nicki’s high attraction towards a leather jacket (shown by the histogram’s warm colours inducing high brain activation – illustration 2), while observation and in-depth in interview suggest a different picture in so far that Nicky shows and verbalises verbalise a negative response towards the product after having recognised Tracy’s facial disapproval. disapprov Whereas traditional research methods (observation and interview) reveal a negative attitude towards the product, QEEG brain scans scan in contrast reveal a high attraction.

Illustration 2 Product Attraction Revealed by QEEG Brain Scan

Source: McPhee & Laybourne (2007)69 VENI VIDI VICI Methodological Synergy

The results of the different research approaches, approach summarised in table 2, clearly suggest that brain imaging can add value to situations which at first sight provide a seemingly clear picture of a test person’s attitude and feelings. feelings

68

McPhee, N., Laybourne, P., VENI VIDI VICI Methodological Synergy, ESOMAR WORLD RESEARCH PAPER, PAPER Qualitative 2007, Part 3 / Hybrid Methods, 11/2007, (pp. 1-23) 1 69 Ibid (p. 18)

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Table 2 Complementary Research Results and Conclusion

Source: McPhee & Laybourne (2007)70 VENI VIDI VICI Methodological Synergy

In effect “what Nicky ultimately says and does is not a true reflection of how she felt

at the time” (McPhee and Laybourne 2007: p. 20)71. Hence McPhee and Leybourne (2007: (2007 p. 21)72 suggest giving up the “compartmenta compartmental-

ised techniques” within CR clearly opting for a fusion of traditional methodologies with new insights from neuroscience. This is supported by Lee et al (2007: p. 2 203)73 suggesting the collaboration of research fields in a “non-judgemental judgemental spirit” spirit could enhance consumer insight significantly. Besides, McPhee and Laybourne (2007: p. 6)74 complain a sometimes superficial attitude in marketing’s consumer research departdepar ments towards rds research execution i.e. “About bout how and against what ‘scientific stansta

dards’ the analysiss is undertaken” adding “You would not get the same degree of lax thinking or analysis applied to law, accountancy or architecture.” architecture Still, as neuroscience and the involved brain imaging tools are very complex, complex Kenning and Plassmann (2005: p. 344)75 alert the neuroscientific approach to “economic economic modelling requires a

basic understanding of the applied neuroscientific methods ... .”

70

Ibid, (p. 20) McPhee, N., Laybourne, P., VENI VIDI VICI Methodological Synergy, ESOMAR WORLD RESEARCH PAPER, Qualitative 2007, Part 3 / Hybrid Methods, 11/2007, (pp. 1-23) 1 72 Ibid, (p. 21) 73 Lee et al, What is ‘neuromarketing’? A discussion and agenda for future research, International Journal of Psychology 2007, No. 63, (pp. 199-204) 199 74 McPhee, N., Laybourne, P., VENI VIDI VICI Methodological Synergy, ESOMAR WORLD RESEARCH PAPER, PA Qualitative 2007, Part 3 / Hybrid Methods, 11/2007, (pp. 1-23) 75 Kenning, P., Plassmann, H., NeuroEconomics: An overview from an economic perspective, Brain Research Bulletin 67, 2005, (pp. 343–354) 354) 71

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2.3 Neuroscience – Theoretical Background The functioning of the brain has always been of interest. To introduce some philosophical statements, Bear et al (2007: pp. 5-7)76 refer to Hippocrates (460-379 B.C.) who considered the brain as the “seat of the intelligence”, whereas Aristotle (384-322 B.C.) was of the opinion that the heart was the centre of intellect allocating the brain a simple radiator function for cooling down the seething heart. Descartes (1637: p. 16)77 then, with his famous saying “I think therefore I am”, was of the opinion that the brain indeed controls human behaviour, but only adds human mental capabilities to the mind residing outside the brain. Damasio (1994: p. 249)78 however, critiqued this in his seminal book, Descartes‘ Error, arguing this implied the notion of “the abys-

sal separation between body and mind.” Namely his neurological studies with patients suffering from brain damage support his idea that “there appears to be a collection of

systems in the human brain consistently dedicated to the goal-oriented thinking process we call reasoning, and to the response selection we call decision making, with a special emphasis on the personal and social domain. This same collection of systems is also involved in emotion and feeling, and is partly dedicated to processing body signals.” (Damasio 1994: p. 70)79. Damasio is unambiguously being supported by Zaltman (2003: p. xi)80 who calls for a paradigm shift in consumer research stating

“the most troubling consequence of the existing paradigm has been the artificial disconnection of mind, body, brain, and society.”

Whereas in former times, philosophers, physicians, biologists, chemists, and psychologists rather developed their ideas about brain functioning in isolation, Bear et al (2007: p. 4)81 labelled it a neuroscience revolution when these scientists realised that interdisciplinary cooperation could increase their understanding of the brain significantly, leading to the foundation of the ‘Society of Neuroscience’. Hence neuroscience in itself can be called a relatively young science. Today, the science is characterized by a reductionist approach. This implies that the several scientific approximations to the broad discipline are divided into different branches enabling the researcher to carry out systematic experimental analysis on a certain area of interest. 76

Bear et al, NEUROSCIENCE Exploring the Brain, 3rd Edition, Lippincott Williams & Wilkins, Baltimore, 2007 Descartes, R., Discourse on Method and Meditations on First Philosophy, (1637), Translated by Haldane, E., S., Digireads.com Publishing, Stilwell, Kansas, USA, 2005, Part IV 78 Damasio, A., Descartes’ Error: Emotion, Reason and the Human Brain, 1994, Revised Edition, Vintage Random House, London, 2006 79 Ibid 80 Zaltman, G., HOW CUSTOMERS THINK Essential Insights into the Mind of the Market, Harvard Business School Press, Boston, Massachusetts, 2003 81 Bear et al, NEUROSCIENCE Exploring the Brain, 3rd Edition, Lippincott Williams & Wilkins, Baltimore, 2007 77

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Bear et al (2007: p. 13)82 state “in ascending order of complexity, these are molecu-

lar, cellular, systems, behavioural and cognitive.” Especially the last two have become of crucial interest to economists and to marketing and CR over the last few years, as cognitive neuroscience investigates the neural mechanisms underlying the higher levels of mental activity (i.e. self-awareness and the like) involved in human decisionmaking. Hubert and Kenning (2008)83 get to the heart of the difference between economic and neurological research explaining that whereas economists try to understand human behaviour through observational data and theoretical constructs (i.e. preference and utility), neuroscience tries to investigate the underlying physiological aspects and somatic variables leading to certain behaviour and bodily states. Hence to investigate economically relevant behaviour, the disciplines of economics and neuroscience have merged to what is sometimes also being labelled neuroeconomics. Cognitive neuroscience, as a branch of neuroscience, tries to understand the mechanisms complex cognitive processes such as reasoning and decision-making, emotion and memory, learning, and the like, rest upon. These are all aspects which become crucial when investigating consumer preferences and choices. Reimann et al (2011: p. 610)84 point to a further term consumer neuroscience defining it as the research which investigates especially the “effects of advertising, products, pricing, branding, sales and

consumer choice.”

Since the acquaintance to a broader public neuroscience and neuroscientific brain imaging technologies are also subsumed under the label neuromarketing. As this term is sometimes used rather inattentively in the op-ed pages of newspapers and magazines – such as in Wells’ (2003)85 “In Search of the Buy Button”, or Blakeslee’s (2004)86 “If Your Brain Has a ‘Buy Button’, What Pushes It?”, Ariely and Berns (2010: p. 291)87 complain that cognitive processes are too multi factorial to be reduced to a single area of activation suggesting not to leave the subject to “the op-ed page of the

82

Bear et al, NEUROSCIENCE Exploring the Brain, 3rd Edition, Lippincott Williams & Wilkins, Baltimore, 2007 Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (pp. 272-273) 84 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application, Psychology & Marketing, June 2011, Vol. 28 Issue 6, (pp. 608-637) 85 Wells, M., In Search of the Buy Button, Forbes Magazine, January 09, 2003 [Online] Available from http://www.forbes.com/forbes/2003/0901/062_print.html [Accessed 5th February 2012] 86 Blakeslee, S., If Your Brain Has a ‘Buy Button’, What Pushes It?, The New York Times, October 19, 2004, [Online] Available from http://www.nytimes.com/2004/10/19/science/19neuro.html?_r=2&position=&pagewanted=print&position [Accessed 5th February 2012] 87 Ariely, D., Berns, G., S., Neuromarketing: the hope and hype of neuroimaging in business, Nature – Nature Reviews Neuroscience, April 2010, Vol. 11, (pp. 286, 291) 83

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New York Times.” They are being supported by Hubert and Kenning (2008)88 and Hubert (2010)89 alerting the use of words like ‘buy button’ led to an oversimplification of the academic discussion and probably to unfulfilled expectations from companies and media in practice. Hence this paper prefers to follow the explanation of consumer neuroscience following Hubert’s (2010: p. 813)90 suggestion it is the “new research

area that uses neuroscientific methods and findings to better understand the (neuro-) physiological fundamentals of consumer behaviour.”

88

Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (p. 274) 89 Hubert, M., Does neuroeconomics give an impetus to economic and consumer research?, Journal of Economic Psychology, October 2010, Vol. 31 Issue 5, (p. 815) 90 Ibid, (pp. 812-817)

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2.3.1 Overview of Brain Structure Bear et al (2007: p.. 210)91 simplistically introduce the brain is being “organised like a

patchwork quilt” in which different areas are assigned to fulfil certain functions. BasiBas cally the brain can be divided into in three main larger areas – the cerebrum, the brain stem and the cerebellum. It is worth to provide a short snapshot of the anatomy of the brain as to provide comprehension what is exactly being explored with neuroscineurosc entific experiments of the living brain, and to create an understanding how the results can be interpreted subsequently. This basic understanding of brain anatomy is propr vided in table 3, 4 and 5.

Table 3 Basic Brain Structure and Functions – The Forebrain

Source: own design adapted from Bear et al (2007)92 NEUROSCIENCE Exploring the

Brain

91 92

Bear et al, NEUROSCIENCE Exploring the Brain, 3rd Edition, Lippincott Williams & Wilkins, Baltimore, 2007 Ibid, (pp. 184-186)

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Table 4 Basic Brain Structure and Functions – The Midbrain

Source: own design adapted from Bear et al (2007)93 NEUROSCIENCE Exploring the

Brain

Table 5 Basic Brain Structure and Functions – The Hindbrain

Source: own design adapted from Bear et al (2007)94 NEUROSCIENCE Exploring the

Brain

93

Bear et al, NEUROSCIENCE Exploring the Brain, 3rd Edition, Lippincott Williams & Wilkins, Baltimore, 2007, (pp. 187-188) 94 Ibid, (pp. 189-190; 190; 262, 474, 477)

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For consumer researchers the most interesting part of the brain is the cerebral cortex which is the “seat of perceptions, conscious awareness, cognition and voluntary aca

tions� (Bear et al 2007: p. 185).95 Basing on cytoarchitectonic studies, Brodmann has created eated a map of the brain containing 52 so-called so Brodmann Areas already in 1906, illustrated in figure 5.. The relevant functions assigned to the BAs are listed in table 6. Figure 5 Cortical Areas According to Brodmann

Source: University of Michigan (2012)96 The Human Brain Table 6 Functional Areas of the Brain

Source: University of Michigan (2012)97 The Human Brain

95

Bear et al, NEUROSCIENCE Exploring the Brain, 3rd Edition, Lippincott Williams & Wilkins, Baltimore, Baltim 2007 96 University of Michigan, The Human Brain, [Online] Available from http://www.umich.edu/~cogneuro/jpg/Brodmann.html [Accessed 20th February 2012] 97 Ibid

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Kenning et al (2007a)98 state Brodmann’s classification of brain areas is one of the best-known brain maps – although with slight modifications to date i.e. by Talairach and Tournoux’ (1988)99 Stereostatic Atlas of the Human Brain which, to Nowinski et al (2003: p. 50),100 is “the most frequently used coordinate system in human brain map-

ping.” This section can only provide the reader with a coarse overview of the anatomy of brain areas and does not reflect the complexity of our central nervous system.

98 Kenning, et al, Consumer Neuroscience – Implikationen neurowissenschaftlicher Forschung für das Marketing [Consumer Neuroscience: Implications of Neuroscientific Research for Marketing], Marketing ZFP, 29,

Issue 1, 2007a, (pp. 58, 60) 99 Talairach, J., Tournoux, P., Co-Planar Stereotaxic Atlas of the Human Brain: 3-D Dimensional Proportional System: An Approach to Cerebral Imaging, Translated by Rayport, M., Thieme Medical Publishers, New York, 1988 100 Nowinski et al, The Cerefy Neuroradiology Atlas: a Talairach–Tournoux atlas-based tool for analysis of neuroimages available over the Internet, NeuroImage 20, 2003, Elsevier Inc. (pp. 50-57)

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2.3.2 Brain Imaging Technologies As described, the brain is divided into different areas which contribute with different functions to human mental and bodily activity. Although Bear et al (2007)101 acknowledge the division of the brain into functional areas (i.e. the visual cortex for sight) sight has many merits they admit the difficulty to understand how the complex overall system really works.

Today, advanced neuroscientific brain imaging technologies are used to explore the different cognitive and emotional processes within the human brain while while test persons are being exposed to certain stimuli or situations under research. The imaging techtec nologies record the different centres of stimulation within the brain by making use of two main different methods. One technique focuses on measuring electromagnetic electr

activity (table 7), ), while the other focuses on changes of cerebral blood flow or metabolism (table 8).

Table 7 Overview of neuroimaging techniques – electrical activity

Source: Kenning et al (2007b)102 Applications ns of functional magnetic resonance imagima

ing for marketing research

101

Bear et al, NEUROSCIENCE Exploring the Brain, 3rd Edition, Lippincott Williams & Wilkins, Baltimore, 2007, (p. 206) 102 Kenning et al, Applications of functional magnetic resonance imaging for marketing research, Emerald Qualitative Market Research: An International Journal, 2007b, 2007 Vol. 10, No. 2 (p. 138)

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EEG measures the electrical activity in the brain by means of electrodes placed on the scalp which recognise changes in the electrical fields. The voltage fluctuations on the scalp indicate cate brain activity generated by active neurons in different areas. The neune ronal activity shows which brain areas are involved in mental activities. MEG likewise measures electrical activity by means of revealing changes in magnetic fields induced by brain activity, but allows the researcher to investigate deeper brain areas than possible with EEG.

Table 8 Overview of neuroimaging techniques – metabolic activity

Source: Kenning et al (2007b)103 Applications of functional magnetic resonance imagima

ing for marketing research

FMRI measures the metabolic activity in the brain by taking advantage of the magma netic properties of haemoglobin (the oxygen carrying molecule in the blood). It is understood that increased activity in certain certain brain areas goes along with changes of the cerebral blood flow i.e. increased perfusion of brain tissue. Hence fMRI scans can exactly localise mental activity of brain areas also in deeper regions. PET is an invainv sive method whereby radioactive positrons positrons are injected or inhaled. By means of their radiation they can detect the metabolic changes within the brain evoked by the relerel vant neurotransmitters. Due to its radioactive properties its application is restricted.

103

Kenning et al, Applications of functional magnetic resonance imaging for marketing research, Emerald Qualitative Market Research: An International Journal, 2007b, 2007 Vol. 10, No. 2 (p. 138)

34


Stoll et al (2008a)104 emphasise the good spatial resolution of both fMRI and PET, whereas EEG and MEG have very good temporal resolution. Hence brain imaging methods have advantages and disadvantages resulting in the necessity to carefully determine the adequate technology for the relevant experiment. Thus Kenning and Plassmann (2005)105 point to the importance of understanding of brain imaging technologies in accordance with the relevant subject under research.

104

Stoll et al, Consumer Neuroscience und Neuromarketing – der Blick ins Kundenhirn, [Consumer Neuroscience and Neuromarketing – the view into the customer’s brain], Marketing Review St. Gallen, 6/2008a, (p. 35) 105 Kenning, P., Plassmann, H., NeuroEconomics: An overview from an economic perspective, Brain Research Bulletin 67, 2005, (p. 344)

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2.3.3 Neuroscientific Findings and Applications in Marketing FMRI studies have already revealed interesting insights in marketing and consumer research. Erk et al (2002)106, with their study on car preferences, examined the attraction of sports cars versus limousines and small cars. Their fMRI scans reveal that sports cars evoke most activity in the reward centre of the brain. As rewards trigger positive emotions, they suggest this can enforce goal-directed behaviour. To put that in practice, compare an ad with a young couple sitting in a sports car (signalling wealth and status, triggering reward and positive emotions) recommending a new car insurance, to an ad just showing this couple in a small car. The assumption is that the positive triggers evoked by the sports car are more likely to enforce a purchase. Hence neuroscientific insights can have a direct impact on the advertising industry. Moreover, test persons in the study compared the headlights of cars to eyes of a human face. Likewise fMRI scans have revealed the activation of the FFA in the brain being responsible for face recognition. As Aharon et al (2001)107 show with their fMRI study, reward centres are also activated in males viewing beautiful female faces, suggesting “it is possible that the brain circuitry implicated in reward function underlying

motivated behaviour is activated by the social signals contained in beautiful faces” (Aharon et al 2001: p. 537)108. If this holds true, activating reward centres by purposeful product design would become another powerful tool for marketers.

Another vivid example which might encourage marketers to rely on neuroscientific insights is the so-called Pepsi-Coke sip-test whereby McClure et al (2004)109 investigated the influence of brand image on consumer perception during a taste experiment with Pepsi® and Coke®. Whereas their blind-taste experiment reveals no big difference of perception of the two brands, given the choice, participants chose Coke over Pepsi. As, in the latter case, the corresponding fMRI scans reveal a strong involvement of the hippocampus (responsible for memory), McClure et al (2004: p. 385)110 suggest “cultural information biases preference decisions through the dorsolateral

region of the prefrontal cortex, with the hippocampus engaged to recall the associated

106

Erk et al, Cultural objects modulate reward circuitry, NeuroReport, December 2002, Vol. 13 No. 18, (pp. 2499-2503) 107 Aharon et al, Beautiful Faces Have Variable Reward Value: fMRI and Behavioral Evidence, Neuron, November 2001, Vol. 32, (pp. 537-551) 108 Ibid 109 McClure et al, Neural Correlates of Behavioral Preference for Culturally Familiar Drinks, Neuron, October 2004, Vol. 44, (pp. 379-387) 110 Ibid, (pp. 379-387)

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information.� Hence McClure et al (2004: p. 380)111 state “there are visual images and marketing messages that have insinuated themselves into the nervous systems of humans that consume the drinks� suggesting brand preference can override taste perception. As creating brand preference is one of the main aims of marketers, Walvis (2008)112 state it is important to find out whether there are underlying principles which can help marketers to create the right messages towards brand preference.

To provide the reader with further insight on the contributions of neuroscience to marketing and consumer research at this stage, a rough overview of some relevant neuroscientific studies and results is depicted in table 9.

Table 9 Overview of fMRI-studies studies related to marketing issues

Source: Kenning et al (2007b)113 Applications of functional magnetic resonance imagima

ing for marketing research 111

McClure et al, Neural Correlates of Behavioral Preference for Culturally Familiar Drinks, Neuron, October 2004, Vol. 44, (pp. 379-387) 112 Walvis, T.H., Three laws ws of branding: Neuroscientific foundations of effective brand building, Journal of Brand Management, December 2008, Vol. 16, No. 3, (p. 180) 113 Kenning et al, Applications of functional magnetic resonance imaging for marketing research, Emerald Qualitative Market Research: An International Journal, 2007b, 2007 Vol. 10, No. 2 (p. 145)

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Continuation Table 9 Overview of fMRI-studies fMRI studies related to marketing issues

Source: Kenning et al (2007b)114 Applications of functional magnetic resonance imagima

ing for marketing research

114

Kenning et al, Applications of functional magnetic resonance imaging for marketing research, Emerald Qualitative Market Research: An International Journal, 2007b, 2007 Vol. 10, No. 2 (p. 145)

38


Continuation Table 9 Overview of fMRI-studies fMRI studies related to marketing issues

Source: Kenning et al (2007b)115 Applications of functional magnetic resonance imagima

ing for marketing research

115

Kenning et al, Applications of functional magnetic resonance imaging for marketing research, Emerald Qualitative Market Research: An International Journal, 2007b, 2007 Vol. 10, No. 2 (p. 146)

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2.4 Options for Neuroscientific Contributions to CR There is no doubt that, to a great extent, buying decisions are affected by unconscious emotions (Hubert and Kenning 2008: p. 283)116, (Camerer et al 2005: p. 11)117, (Perrachione and Perrachione 2008: pp. 312-313)118 worth being explored with the option of neuroscientific input. But as in economy output (here: economic benefit resulting from neuroscientific research) always has to outperform input (here: high costs for tools and labour)119, there is a need to investigate what particular advantages can result from neuroscience supporting the ultimate goal – a company’s competitive advantage. This is elaborated on the basis of the subsequent theses:

Thesis 1: As salient brands are the winners of today’s competition, companies that want their brands being successful have to attract consumers’ emotions to elicit a sustainable consumer-brand-relationship. Neuroscientific insights shed light on how consumers’ emotions respond to brands thus helping to enhance brand equity.

The aim to understand emotions from a company perspective is not an end in itself but a means to elicit conversion rates in terms of buying behaviour. Gobé (2001: p. xiv)120 suggests positive brand perception – as a precondition – develops to the extent how a brand “engages consumers on the level of the senses and emotions ... .” Although there is common understanding that emotions ‘fuel’ decision-making, there is difference with regard to the approach towards emotions within the research departments and the academic field. I.e. Penn, from Conquest Research, UK, (2007: p. 7)121 suggests metaphoric-based questionnaires instead of text-based ones to approach

brand engagement explaining “metaphors provide a ‘window’ on emotion.” Penn (2008: p. 1)122 further argues there is no convincing evidence that neuroscientific imaging “can tell us something about brands and marketing communication that con-

ventional research cannot.” 116

Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (pp. 272-292) 117 Camerer et al, Neuroeconomics: How Neuroscience Can Inform Economics, Journal of Economic Literature, March 2005, Vol. XLIII, (pp. 9-64) 118 Perrachione, T.K., Perrachione, J.R., Brains and brands: Developing mutually informative research in neuroscience and marketing, Journal of Consumer Behaviour, July-October 2008, No. 7, (pp. 303-318) 119 For further information on costs please see also: Kenning et al, Applications of functional magnetic resonance imaging for market research, Emerald Qualitative Market Research: An International Journal, 2007b, Vol. 10, No. 2, (p. 147) 120 Gobé, M., Emotional Branding: the new paradigm for connecting brands to people, Allworth Press, Allworth Communications, New York, 2001 121 Penn, D., Beyond neuroscience: engagement and metaphor, Conquest Research Ltd., UK, In: The ESOMAR Annual Congress, Berlin, September 2007, (pp. 1-10) 122 Penn, D., Beyond neuroscience – whatever happened to neuromarketing? Admap Magazine, January 2008, Issue 490, (pp. 1-4)

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However, it is worth being emphasised that neuroscience is not aimed at simply providing a map of the brain but – given different tasks – to gain understanding of the brain and explicitly, what different parts are activated and how they do interact in circuitry (Camerer et al :2005)123. Hence to assess consumers’ emotions effectively presupposes to gain explicit knowledge of the complex subconscious and the underlying principles of decision-making. When it comes to the subconscious it is been suggested that neuroscientific insights contribute significantly to understand the hidden drivers behind overt decision-making. Damasio (1994: p. 213)124 argues our decisions are shaped by both, the world we interact with, and the biases inherent in our organism, i.e. “our preferences for gain over loss, for reward over punishment, for low risk

over high risk.” With his SMH he suggests that so-called somatic markers (i.e. gut feelings tagged to favourable or unfavourable feelings of the past) subconsciously contribute to future decision-making. The Gambling Experiments illustrate the impact of somatic markers on decision-making under conditions of reward (gain), punishment (loss) and uncertainty – conditions as if in real life (Damasio: 1994)125, Bechara et al (2005)126. Quartz and Asp (2005)127 summarise, contemporary neuroscience considers emotions as a measure of reward, and anticipatory emotions as an estimate of expected reward. What are the implications for consumer research then?

Linking neuroscience with economy basically implies that brands can be seen as ‘predictive rewards’. At this stage think back at Erk et al (2002)128, who, with their fMRI study on car preferences, revealed that sports cars evoke most activity in the reward

centre of the brain. Or McClure et al (2004)129 who demonstrated with their fMRI study (Pepsi-Coke sip-test) that brand image can override taste perception.

123 Camerer et al, Neuroeconomics: How Neuroscience Can Inform Economics, Journal of Economic Literature, March 2005, Vol. XLIII, (p. 14) 124 Damasio, A., Descartes’ Error: Emotion, Reason and the Human Brain, 1994, Revised Edition, Vintage Random House, London, 2006 125 Damasio, A., Descartes’ Error: Emotion, Reason and the Human Brain, 1994, Revised Edition, Vintage Random House, London, 2006, (pp. 212-222) 126 Bechara et al, The Iowa Gambling Task and the somatic marker hypothesis: some questions and answers, Trends in Cognitive Sciences, April 2005, Vol. 9, No. 4, (p. 159-162) 127 Quartz, S., Asp, A., Brain branding – brands on the brain, Social Cognitive Neuroscience Laboratory, California Institute of Technology, USA, In: The ESOMAR Annual Congress, Cannes, September 2005, (p. 3) 128 Erk et al, Cultural objects modulate reward circuitry, NeuroReport, December 2002, Vol. 13 No. 18, (pp. 2499-2503) 129 McClure et al, Neural Correlates of Behavioral Preference for Culturally Familiar Drinks, Neuron, October 2004, Vol. 44, (pp. 379-387)

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In line with this, Quartz and Asp (2005: p. 3)130 suggest “the success of a brand will

depend upon the kind and strength of anticipatory emotions it creates.” Considering this, Quartz and Asp (2005: p. 4)131 propose, prevalent brand equity measures should be adjusted to “emotion-based “emotion based brand equity measures that relate more directly to

consumer behaviour and other measures of brand performance.” They developed a three-stage stage cascading process which includes the findings from neuroscience (i.e. SMH) as depicted in table 10. 1 Table 10 Brain Brand – Brand Equity Measures

Source: own design adapted from Quartz and Asp (200 (2005)132 Brain branding – brands

on the brain Moreover, Esch and Möll (2009)133, with their fMRI study, report that strong brands activate brain areas related to positive emotions, emotions whereas neutral or weak brands elicit negative emotions within consumers’ brains. They even suggest that Opel’s marketing investments in product design and communications were waste of money as Opel®, with changing messages, did not follow a congruent approach roach towards the consumer.. In their view, view a consistent reward message to the consumer is being considered as crucial to contribute to emotional long-term long conditioning towards a brand (Esch and Möll: 2009)134.

130

Quartz, S., Asp, A., Brain branding – brands on the brain, Social Cognitive Neuroscience Laboratory, California Institute of Technology, USA, In: The ESOMAR Annual Congress, Congre , Cannes, September 2005, (pp. 1-13) 131 Ibid 132 Ibid (p. 4) 133 Esch, F.R., Möll, T., Ich fühle, also bin – Markenemotionen machen den Unterschied, [I feel, therefore I am – emotions towards brands make the difference], Marketing Review St. Gallen, April 2009, (pp. 22-26) 134 Ibid (p. 25)

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Hence Esch and Möll (2009: p. 25)135 support Quartz and Asp’s conclusions in so far they suggest “Brain Based Brand Equity” confirms the actual value of a brand – from customer perspective.

Thus, by means neuroscientific insights, fMRI studies, and by acknowledging emotionbased brand equity measures, consumer researchers and marketers are able to investigate if and to what extent the different brain areas elicit responses towards a brand and how they do interact – being considered as crucial when it comes to marketing communications.

135

Esch, F.R., Möll, T., Ich fühle, also bin – Markenemotionen machen den Unterschied, [I feel, therefore I am – emotions towards brands make the difference], Marketing Review St. Gallen, April 2009, (pp. 22-26)

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Thesis 2: Insights from neuroscience can help to achieve a holistic approach regardregar ing consumers’ mental activities activit es and responses concerning the marketing-mix, marketing thus providing marketers with better clues for brand positioning. positioning

Before neuroscientific contributions are investigated in how far they add value to ameam liorating the marketing--mix,, it is important to note that we are not talking about prodpro ucts anymore – we are talking about brands acting as ‘reward predictors’ to enhance buying behaviour. Moreover, More brands also act as ‘simplifiers’ to short-cut cut complex decidec sion-making making processes in an environment with constant information overload (Esch and Möll: 2009)136. In today’s competitive environment with hardly differenced market offerings, private labels, me-too too offerings and shortening PLCs, Rademacher and Koschel (2006: p. 1)137 suggest marketers do “need holistic approaches that are able

to capture the complexity of human actions.” The marketing-mix mix (figure 6) – as the classical tool-box box for operational marketing ma – enables a company to communicate customer benefit by means of the different Ps. Figure 6 Components of the Marketing Mix

Source: Kotler et al (2009)138 Marketing Management

136

Esch, F.R., Möll, T., Ich fühle, also bin – Markenemotionen machen den Unterschied, [I feel, therefore I am – emotions towards brands make the difference], Marketing Review St. Gallen, April 2009, (p. 23) 137 Rademacher and Koschel, Coming to terms with emotions, Ipsos Qualitative, litative, Germany, In: The ESOMAR Qualitative Research, Athens, October 2006, (pp. (p 1-10) 138 Kotler et al, Marketing Management, Pearson Education Ltd., Harlow, UK, 2009, (p. 17)

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Hence, well understood, all messages transported by the Ps are perfectly composed and consistently concerted – contributing to convert a product into a valuable brand. If we stick to the Ps, when it comes to the product, already Sirgy (1982: p. 287)139 cites Tucker (1957: p. 139) saying “There has long been an implicit concept that con-

sumers can be defined in terms of either the products they acquire or use, or in terms of the meanings products have for them or their attitudes towards products.” Erk et al (2002)140, with their fMRI study on car preferences, support that saying reward mechanisms are activated in relation to the social dominance and rank they elicit. Quartz and Asp (2005)141 add that brands are closely related to self-perception in so far they help people to enhance their social identity.

Packaging and design in this sense play a crucial role in brand perception as they vividly underline the perceived value of a brand and trigger status-relevant emotions. Stoll et al (2008b)142, with their fMRI study on packaging, reveal that attractive packages elicit different neural activation within the brain than unattractive packages – i.e. attractive packages lead to increased activation in reward processing areas, whereas unattractive packages activate brain areas related to aversive stimuli. Hubert and Kenning (2008: p. 275)143 complement: “Assuming that there is a relation between

product design and purchase decision, we can hypothesize that activity changes in the reward system of the brain induced by an attractive product design can partly be applied in order to predict purchasing behavior.” To put that in marketing practice, Ariely and Berns (2010: p. 286)144 suggest a prod-

uct development cycle (figure 7) by means of fMRI “which can be used as part of the design process itself.” Hence consumers’ neural responses could be used to improve products from consumer perspective, thus helping to reduce expensive product flops.

139

Sirgy, M. J., Self-Concept in Consumer Behavior: A Critical Review, Journal of Consumer Research December 1982, 9, (pp. 287-300) 140 Erk et al, Cultural objects modulate reward circuitry, NeuroReport, December 2002, Vol. 13 No. 18, (p. 2499) 141 Quartz, S., Asp, A., Brain branding – brands on the brain, Social Cognitive Neuroscience Laboratory, California Institute of Technology, USA, In: The ESOMAR Annual Congress, Cannes, September 2005, (p. 5) 142 Stoll et al, What they see is what they get? An fMRI-study on neural correlates of attractive packaging, Journal of Consumer Behaviour, July-October 2008b, No. 7, (p. 342) 143 Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (pp. 272-292) 144 Ariely, D., Berns, G., S., Neuromarketing: the hope and hype of neuroimaging in business, Nature – Nature Reviews Neuroscience, April 2010, Vol. 11, (p. 286)

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Figure 7 Product development cycle

neuroima Source: Ariely and Berns (2010)145 Neuromarketing: the hope and hype of neuroimaging in business

The product development cycle does not only allow pre-design pre design application in order to adjust product features in accordance with consumers’ responses on time, but also includes pre- and post-design design applications i.e. to test the impact of ad campaigns.

Given the fact that companies spend huge amounts of money on R&D and ad camca paigns – alone P&G (2011)146 spent 2,001 million USD on R&D, D, and another 9,315 million USD on resulting advertising ad campaigns, which adds up to 11,316 million USD, USD accounting for nearly 17% of total operating expenses in 2011 – it is worthwhile to think about optimizing research and marketing efforts by means of the integration of neuroscientific insights enabling companies to better position their brands. brands

145

Ariely, D., Berns, G., S., Neuromarketing: the hope and hype of neuroimaging in business, Nature – Nature Reviews Neuroscience, April 2010, 201 Vol. 11, (p. 286) 146 Procter & Gamble, Annual Report 2011, (pp. 52-56), [Online] Available from http://annualreport.pg.com/annualreport2011/_files/pdf/PG_2011_AnnualReport.pdf [Accessed [Acces 16th April 2012]

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As the price of a product is directly related to a company’s profit, pricing is especially important in mature markets where countless products are competing for consumer preference. Findings suggest that people often cannot recall prices for products (Hubert and Kenning: 2008)147 but – influenced by marketing – develop a sense of value for them (Poundstone: 2010)148. BDT researchers Kahneman and Tversky (1974)149 describe when it comes to decision-making, people use heuristics to overcome limited knowledge in uncertain situations. They termed this effect anchoring and

adjustment explaining anchors serve as starting points being adjusted by an individual to come to purposeful estimates. In fact, anchoring is already used as an initial marketing-tool at the PoS, when consumers enter a shop considering the initial price as a benchmark for the evaluation of other prices. Without doubt, this may help to obscure price sensitivity to a certain extent but does this provide insight on consumers’ actual ‘willingness to pay’ (WTP)? An fMRI study from Knutson et al (2007)150 supports the idea that WTP can be examined. The experiment consisted of three stages: 1. Product presentation, 2. Price presentation, 3. Selection task. FMRI scans measured three main areas involved during the stages: 1. the nucleus accumbens (NAcc) indicating product preference (anticipation of gains), 2. the medial prefrontal cortex (MPFC) for estimation of the difference between WTP and displayed price (processing of gains and losses), and 3. the activation of the insula (anticipation of pain) in case of excessive prices (no purchase) or its deactivation in case of WTP matched/reduced prices (purchase). This induces Knutson et al (2007: p. 148)151 to say “Preference may lead to purchasing, but only if

prices are right.” Interestingly, the study revealed that “Activity from each of these regions independently predicted immediately subsequent purchases ... .” (Knutson et al (2007: p. 147)152. The results suggest that consumers’ WTP can be determined by scanning brain activity. Hence fMRI studies could be of help in calibrating prices to the extent that they are most profitable for a company and minimum painful for the consumer, thus reaching an optimal ‘level of acceptance’ for both sides.

147

Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (p. 281) Poundstone, W., Priceless: The Myth for Fair Value (and How to Take Advantage of It), Hill and Wang, New York, 2010, (p. 9) 149 Tversky, A., Kahneman, D., Judgement under Uncertainty: Heuristics and Biases, Science, New Series, September 1974, Vol. 185, No. 4157, (pp. 1128) 150 Knutson et al, Neural Predictors of Purchase, Neuron 53 (1), January 2007, (pp. 147-156) 151 Ibid 152 Ibid 148

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However, pricing is not only decisive for companies’ profitability calculations. Prices also have an important psychological meaning to the consumer as they implicitly suggest quality, ‘affordable luxury’, indicate a premium segment or just offer a bargain. In either way, prices elicit certain images related to a product and thus determine product positioning. A recent fMRI study from Plassmann et al (2008)153 demonstrates that price knowledge can influence experienced pleasantness (EP) being considered as a ‘learning signal’ for future behaviour by determining utility (gain). During a sampling, participants had to evaluate the flavour of different wines being aware of the respective prices. Participants’ activation of the medial orbitofrontal cortex (mOFC) – an indicator for EP – increased significantly in correlation with the price increases. Presenting identical wines with higher prices hence has led to higher product evaluation. Accordingly, Plassmann et al (2008: p. 1052)154 state, as EP depends on nonintrinsic characteristics (i.e. price), it is an “important task for future research to de-

velop a more complete characterization of the range of marketing actions that can influence neural computation of EP” – with reference to branding and advertising.

Keeping in mind the prevalent advertising clutter it is difficult for a product to stand out from the mass of competing products today. Hence promotion (here: advertising) has to be purposefully designed to shape consumers’ mental representations (consumer perceived brand equity), and to influence buying behaviour (increase sales). Findings from several neuroscientific studies (Erk et al 2002: p. 2499)155, (Esch and Möll 2009: p. 25)156 suggest ads eliciting emotions by attracting areas of reward are more likely to influence purchase behaviour. In fact, studies from Ambler et al (2000)157 and McGeuens et al (2011)158 reveal that emotional ads in general outperform non-emotional ads with regard to attitude towards the ad and towards the brand. Moreover, the MEG study of Ambler et al (2000)159 suggests, affective ads are better remembered than cognitive ads proposing, affective ads enhancing recall are more likely to increase brand choice. 153 Plassmann et al, Marketing actions can modulate neural representations of experienced pleasantness, PNAS Proceedings of the National Academy of Sciences of the USA, January 2008, Vol. 105, No. 3, (pp. 1050-1054) 154 Ibid, (pp. 1050-1054) 155 Erk et al, Cultural objects modulate reward circuitry, NeuroReport, December 2002, Vol. 13 No. 18, (pp. 2499-2503) 156 Esch, F.R., Möll, T., Ich fühle, also bin – Markenemotionen machen den Unterschied, [I feel, therefore I am – emotions towards brands make the difference], Marketing Review St. Gallen, April 2009, (pp. 22-26) 157 Ambler et al, Brands on the Brain: Neuro-Images of Advertising, Business Strategy Review, 2000, Vol. 11, Issue 3, (pp. 17-30) 158 Geuens et al, Emotional advertising: Revisiting the role of product category, Journal of Business Research, 2011, (pp. 418-426) 159 Ambler et al, Brands on the Brain: Neuro-Images of Advertising, Business Strategy Review, 2000, Vol. 11, Issue 3, (p. 21)

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Besides, given the fact that companies spend huge amounts on celebrity advertising, it might be worthwhile to explore how celebrity exposure, in connection with a product, affects the neural correlates underlying memory, attitude formation, and decisionmaking. A fMRI study from Klucharev et al (2008)160, investigating the persuasive effects of expert power on memory and attitudes, states that celebrities – although being well remembered – only add value to persuasion in case their perceived expertise is congruent with the product (i.e. André Agassi can enhance purchase for sports shoes but not for financial products). Stallen et al (2010)161 investigated the neural correlates underlying the effect of fame on product memory, attitude, and purchase intention for shoes, comparing responses elicited by celebrities and non-famous females on female study participants. In contrast to Klucharev et al (2008)162, Stallen et

al (2010)163 neither realised a positive effect from celebrity endorsement on attitude formation, nor did the study reveal that celebrity expertise led to increased purchase intention. Analysing their fMRI results, Stallen et al (2010)164 argue, neural activation in reward-related areas (here: the mOFC in encoding subjective liking of stimuli) does not stem from rewarding (here: attractive faces, as the study design used attractive females for both, famous and non-famous females), but rather from learning associations between neutral (product) and valenced stimuli (celebrity).

Still, there is room for objections with regard to the study design as Stallen et al (2010)165 do not provide any plausible justification why celebrities should have a more trustworthy expertise for shoes than normal women. For shoes, shouldn’t they have used celebrities with expertise (i.e. fashion designers) in order to ensure comparability to the study of Klucharev et al? Interestingly, Stallen et al (2010)166 found an increase of purchase intention for those shoes which were considered not to be owned by the endorsers (both: famous and non-famous) what induces them to assume, products have to be associated with the possibility to be owned by ‘normal’ females instead of physically above-average attractive endorsers.

160 Klucharev et al, Brain mechanisms of persuasion: how ‘expert power’ modulates memory and attitudes, SCAN, 2008, Vol. 3, Issue 4, (p. 355) 161 Stallen et al, Celebrities and shoes on the female brain: The neural correlates of product evaluation in the context of fame, Journal of Economic Psychology, 2010, Issue 31, (pp. 802-811) 162 Klucharev et al, Brain mechanisms of persuasion: how ‘expert power’ modulates memory and attitudes, SCAN, 2008, Vol. 3, Issue 4, (p. 361) 163 Stallen et al, Celebrities and shoes on the female brain: The neural correlates of product evaluation in the context of fame, Journal of Economic Psychology, 2010, Issue 31, (p. 809) 164 Ibid, (p. 809) 165 Ibid, (pp. 802-811) 166 Ibid, (p. 810)

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Anyhow, Peter Daboll – CEO of ACE Metrics, which carried out an empiric study on celebrity endorsement in the US in 2010 – was cited in an AdAge Article (2011)167 that

“fewer than 12% of ads using celebrities exceeded a 10% lift, and one-fifth of celebrity ads had a negative impact on advertising effectiveness.” Further to ACE Metrics (2010)168, in 2010, 15% of ads in the US used celebrity endorsement resulting in a total spending of approximately US$50 billion.

The assumption from consumer research and marketing scholars that celebrity endorsement helps enhancing sales, the contradicting ACE Metrics study, and the slightly diverging results from the above mentioned fMRI studies contribute to the fact that the value of celebrity endorsement has to be further investigated – especially as companies pay large fees for it. It is suggested that consumer neuroscience can enhance consumer research as it focuses on a deeper understanding of the involved brain areas. All in all, the results so far suggest, neuroscientific insights can contribute to a holistic consumer understanding, thus enabling consumer research and marketing to enhance brand positioning.

167

Daboll, P., Celebrities in Advertising Are Almost Always a Big Waste of Money – Study Finds That Big Names Don't Pay Big Dividends, AdvertisingAge, January 12, 2011, [Online] Available from

http://adage.com/article/cmo-strategy/celebrities-ads-lead-greater-sales/148174/ [Accessed 25th April 2012] 168 ACEmetrix, Celebrity Advertisments: Exposing A Myth Of Advertising Effectiveness, Study 2010, [Online] Available from http://mktg.acemetrix.com/acton/fs/blocks/showLandingPage/a/563/p/p-001d/t/page/fm/0 [Accessed 25th April 2012]

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Thesis 3: Traditional consumer research is a multidisciplinary discipline, and marketing and advertising rely on its diverse approaches and the relevant theories. Neuroscientific insights can help to see if long held assumptions still hold true or if they have to be adjusted to better approach consumer insight.

Marketing and advertising have long relied on the assumption that consumers’ buying decisions result from a relevant-set of brands residing in consumers’ minds (i.e. brandi - brandn in mind means: brandi - brandn under purchasing consideration). The long held assumption was, the higher the rank a brand adopts within the relevant-set, the more likely the purchase probability (Hauser and Wernerfelt: 1989)169. Hence advertising efforts resulted in a) achieving unaided brand awareness (as a precondition to becoming part of the relevant-set) and b) in shifting up a brand in the ranking position within the relevant-set (in order to increase the likelihood of a purchase). As simply achieving unaided brand awareness does not automatically result in the inclusion into the consumers’ relevant-set (Silk and Urban: 1978)170, Hauser and Wernerfelt (1989)171 suggested the relevant-set/response model which indicates the ratio between advertising and response (here: actual take-up of a brand into the relevant-set) to measure ad effectiveness.

However, recent neuroscientific findings suggest there is no ranking within the consumer’s brain. Instead, Deppe et al (2005: p. 171)172 revealed “For products mainly

distinguishable by brand information, …, a nonlinear winner-take-all effect for a participant’s favourite brand... .” During their fMRI experiment Deppe et al (2005)173 measured brain activity while participants had to choose between sensory nearly identical consumer goods – for them unknowingly classified as target brand (market leader) or diverse brand (competing brand) and randomly presented in pairs for binary decision-making. The aim was to identify the underlying cortical processes during decision-making in correlation with brand information, and to investigate whether decision-making is influenced by implicit memory retrievals. Interestingly, the measured brain activity revealed a reduced activation of areas associated with working 169

Hauser, J., R., Wernerfelt, B., The Competitive Implications of Relevant-Set / Response Analysis, Journal of Marketing Research, November 1989, Vol. 26, (pp. 393-394) 170 Silk, A.J., Urban, G.L., Pre-Test-Market Evaluation of New Packaged Goods: A Model and Measurement Methodology, Journal of Marketing Research, May 1978, Vol. 15, No. 2, (pp. 171-191) 171 Hauser, J., R., Wernerfelt, B., The Competitive Implications of Relevant-Set / Response Analysis, Journal of Marketing Research, November 1989, Vol. 26, (pp. 393-394) 172 Deppe et al, Nonlinear Responses Within the Medial Prefrontal Cortex Reveal When Specific Implicit Information Influences Economic Decision Making, Journal of Neuroimaging, April 2005, Vol. 15, No. 2, (pp. 171-182) 173 Ibid, (pp. 171-182)

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memory, and a simultaneously increased activation in areas involved in emotion processing (i.e. the VMPFC, responsible for integrating emotions into decision-making)

only if the target brand was also the participant’s favourite brand (Deppe et al: 2005)174. This goes in line with Damasio’s (1994)175 findings, that the VMPFC is vital for efficient and advantageous decision-making. Deppe et al (2005)176 argue this supports the idea of the integration of implicit memory retrievals acting as somatic markers (connecting information from the past to either reward or punishment for future decision-making) evoked by the favourite brand. As the absence of a favourite brand did not reveal a strong emotional integration into decision-making, Deppe et al (2005: p. 180)177 suggest “This winner-take-all effect rejects our original hypothesis of a cor-

tical representation of a ranking list as the underlying decision criterion.” The implications for marketing and advertising are two-fold: First of all, advertising efforts should not aim at enhancing the rank within the relevant-set, but to enhance emotional involvement – i.e. directed to evolving brands into favourite brands. Secondly, as also suggested by Esch and Möll (2009)178, and Quartz and Asp (2005)179, measuring ad effectiveness and brand equity should be reconsidered to focusing more on brain based emotions as a KPI for consumer decision-making.

As the ROI of marketing and advertising efforts has serious impact on business success and as companies spend huge amounts on advertising, these neuroscientific insights are valuable insights to enhance marketing efforts, thus helping to maintain competitive advantage.

174 Deppe et al, Nonlinear Responses Within the Medial Prefrontal Cortex Reveal When Specific Implicit Information Influences Economic Decision Making, Journal of Neuroimaging, April 2005, Vol. 15, No. 2, (p.

180) Damasio, A., Descartes’ Error: Emotion, Reason and the Human Brain, Revised Edition, Vintage Random House, London, 2006, (pp. 32-33) 176 Deppe et al, Nonlinear Responses Within the Medial Prefrontal Cortex Reveal When Specific Implicit Information Influences Economic Decision Making, Journal of Neuroimaging, April 2005, Vol. 15, No. 2, (p. 180) 177 Ibid, (pp. 171-182) 178 Esch, F.R., Möll, T., Ich fühle, also bin – Markenemotionen machen den Unterschied, [I feel, therefore I am – emotions towards brands make the difference], Marketing Review St. Gallen, April 2009, (p. 25) 179 Quartz, S., Asp, A., Brain branding – brands on the brain, Social Cognitive Neuroscience Laboratory, California Institute of Technology, USA, In: The ESOMAR Annual Congress, Cannes, September 2005, (p. 4) 175

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2.5 Limitations of the Neuroscientific Approach Besides the various advantageous insights consumer neuroscience delivers, deliver actually there is a hype with regard to ‘neuromarketing’ with the effect that neuromarketing agencies are popping up like mushrooms from the soil, proclaiming the brain to be the real al PoS (red pepper: 2012)180, what has already induced The Lancet Neurology (2004: p. 71)181 to provocatively state whether neuroscientists could be blamed if trying to sell their latest knowledge to “the highest bidder”.

Figure 8 The Brain – Point of Sale

Source: http://redpepper.de/page/neuromarketing182 Hence Plassmann et al (2007: p. 170)183 point to the danger that “advertisers and the

public might ignore neurobiological and technical restrictions and treat initial results as indisputable truth” suggesting to carefully discuss study outcomes to avoid any misuse in advertising research.

180

red pepper Gesellschaft für neurowissenschaftliche Markenverankerung mbH [red pepper corporation for neuroscientific brand anchoring], [Online] Available Availa from http://redpepper.de/page/neuromarketing [Accessed 1st May 2012] 181 THE LANCET Neurology, Neuromarketing: beyond branding, February 2004, Vol. 3, Issue 2, (p. 71), [Online] Available from http://download.thelancet.com/pdfs/journals/laneur/PIIS1474442203006434.pdf [Accessed 1st May 2012] 182 red pepper Gesellschaft für neurowissenschaftliche Markenverankerung mbH mbH [red pepper corporation for neuroscientific brand anchoring], [Online] Available from http://redpepper.de/page/neuromarketing [Accessed 1st May 2012] 183 Plassmann et al, What can advertisers learn from neuroscience?, International Journal Of Advertising, May 2007, Vol. 26, Issue 2, (pp. 151-175) 151

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Perrachione and Perrachione (2008: p. 314)184 alert, there is also the danger of a

“neuroscience effect” which makes scientific outcomes more believable only because they are put in a neuronal context. This had been investigated by Weisberg et al (2008: p. 470)185 who found in their study that even scientists considered irrelevant neuroscientific information as relevant just because of the “seductive appeal” of neuroscience. In addition, Kenning et al (2007b)186 argue, medical investigations in neuroscience need a relatively simple study design compared to the complex design real-world marketing environments require. Reimann et al (2011)187 further mention technical restrictions of fMRI – i.e. its comparatively slow temporal resolution – entailing that marketing stimuli could elicit by far quicker reactions than measurable by fMRI. Facing the technical restrictions Kenning and Plassmann (2005: p. 344)188 suggest the neuroscientific approach to economic modelling requires “a basic understanding of the ap-

plied neuroscientific methods such as functional imaging of the brain.” Moreover, Hubert and Kenning (2008)189 add fMRI studies rely on the assumption that a) the actual information on typical brain areas under investigation is valid, and b) that no measuring biases occur due to noise contamination of fMRIs or participants’ movements during experiments. Besides the technical situation, neuroscientific brain imaging could lead to biased results due to the unrealistic ‘laboratory effect’ which does not reflect complex real-world scenarios in which decisions are normally made (Plassmann et al: 2007)190. Reimann et al (2011)191 also mention the risk of reverse inference. Normally, a given task is investigated with regard to brain activity in order to shed light on the role of a specific brain region in brain function. They suggest to infer that a specific brain func-

tion is based on an identified brain region (i.e. the amygdala) could be fallacious, as 184 Perrachione, T., K., Perrachione, J., R., Brains and brands: Developing mutually informative research in neuroscience and marketing, Journal of Consumer Behaviour, July-October 2008, No. 7, (pp. 303-318) 185 Weisberg et al, The Seductive Allure of Neuroscience Explanations, Journal of Cognitive Neuroscience,

2008, Vol. 20, Issue 3, (pp. 470-477) Kenning et al, Applications of functional magnetic resonance imaging for market research, Emerald Qualitative Market Research: An International Journal, 2007b, Vol. 10, No. 2 (p. 147) 187 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application, Psychology & Marketing, June 2011, Vol. 28 Issue 6 (p. 613) 188 Kenning, P., Plassmann, H., NeuroEconomics: An overview from an economic perspective, Brain Research Bulletin 67, 2005, (pp. 343-354) 189 Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (p. 288) 190 Plassmann et al, What can advertisers learn from neuroscience?, International Journal Of Advertising, May 2007, Vol. 26, Issue 2, (p. 169) 191 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application, Psychology & Marketing, June 2011, Vol. 28 Issue 6 (p. 612) 186

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brain regions can have various functions (i.e. the amygdala is involved in indicating anxiety, but also in learning). These are only some technical and medical issues which should lead to a cautious utilisation of neuroscientific insights signalling that the science still has to evolve. Besides, Hubert and Kenning (2008)192 mention ethical issues which have already arisen within society being afraid, neuroscientific imaging technologies could ‘read’ consumers minds to eventually manipulate by subsequent advertising. Articles like Blakeslee’s (2004)193 citing Gary Ruskin of Commercial Alert saying “At its best, neu-

romarketing would make advertising more effective. At its worst, neuromarketing could make propaganda more effective... .” directly point to such ethical objections. As the topic is discussed relatively undifferentiated in the op-ed press (Ariely and Berns: 2010)194 companies making use of brain imaging technologies could face image problems unless the use was not communicated properly to the public.

Finally, from an economic perspective, neuroscientific brain imaging technologies are relatively expensive. In fact, purchase costs of a state-of-the-art MRI are about US$1 million and annual maintenance costs make up another US$100.000 - US$300.000 (Ariely and Berns: 2010)195. Reimann et al (2011)196 in addition refer to the current research expenses indicating study designs need a lot of repetitions before results can be considered as reliable and Kenning et al (2007b)197 mention costs of scanning of about 300-400 Euro which equals US$ 400-500 per person and hour. Still, there is the option of cooperating with universities, i.e. by sponsoring research departments, what is already in progress. Lee et al (2006)198 i.e. mention that the University of Wales (Bangor) already cooperates with many companies – among them well-known consumer goods companies like Unilever®.

192

Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (p. 288) 193 Blakeslee, S., If Your Brain Has a ‘Buy Button’, What Pushes It?, The New York Times, October 19, 2004, [Online] Available from http://www.nytimes.com/2004/10/19/science/19neuro.html?_r=2&position=&pagewanted=print&position [Accessed 5th February 2012] 194 Ariely, D., Berns, G., S., Neuromarketing: the hope and hype of neuroimaging in business, Nature – Nature Reviews Neuroscience, April 2010, Vol. 11, (p. 291) 195 Ibid, (p. 288) 196 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application, Psychology & Marketing, June 2011, Vol. 28 Issue 6 (p. 613) 197 Kenning et al, Applications of functional magnetic resonance imaging for marketing research, Emerald Qualitative Market Research: An International Journal, 2007b, Vol. 10, No. 2 (p. 147) 198 Lee, N., Broderick, A., J., Chamberlain, L, What is ‘neuromarketing’? A discussion and agenda for future research, International Journal of Psychology, 2007, No. 63, (p. 200)

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That said companies that want to make use of consumer neuroscience should keep in mind it is a new science which still has its limitations besides the many advantageous insights it has already offered and it is supposed to offer to eventually contribute to better consumer understanding.

To avoid any cost intense misinterpretations or premature conclusions and to ensure high scientific standards and up-to-date knowledge-exchange between scientists it suggested to rather counting on co-operations with universities than to rely on neuromarketing agencies.

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2.6 Literature Review – Conclusions What are the implications for contemporary consumer research then? Damasio (1994)199 argues that decision-making is influenced by the external world as well as by internal subconscious emotion-processing. As far as the external world is concerned, traditional consumer research has common standards (i.e. socio-demographics, psychographics, BDT, etc.) that uncover relevant consumer insight. Still, the brain is being considered as a ‘black-box’ (Hubert and Kenning: 2008)200. The discussion shows that insights from traditional CR can be biased by several reasons i.e. wrong introspection (Camerer et al: 2005)201, (Kjaergard: 2008)202, or just by the sequence in which questions are posed (Zaltman: 2003)203. It is suggested that brain-imaging technologies can circumnavigate these cognitive biases (Reimann et al: 2011)204. Moreover, the understanding of the internal world presupposes an understanding of the subconscious aspects of decision-making (Lakoff and Johnson: 1999)205.

The results from literature review suggest that neuroscience can serve as a pathway to a new understanding of the brain and the resulting decision-making processes (Hubert 2010: p. 813)206. With these new insights researchers can also adapt their qualitative research techniques (McPhee and Laybourne: 2007)207. Anyhow, as McPhee and Leybourne (2007)208 and Lee et al (2007)209 suggest, convergence between the different research departments should be maintained and cooperation of the science departments should be enhanced. This should enable companies to rely on valuable consumer insight to eventually maintain competitive advantage.

199

Damasio, A., Descartes’ Error: Emotion, Reason and the Human Brain, 1994, Revised Edition, Vintage Random House, London, 2006, (p. 213) 200 Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (p. 272) 201 Camerer et al, Neuroeconomics: How Neuroscience Can Inform Economics, Journal of Economic Literature, March 2005, Vol. XLIII, (p. 38) 202 Kjaergaard, I., ADVERTISING TO THE BRAIN, Focus Denmark 04/2008, Ministry of Foreign Affairs of Denmark, [Online] Available from http://www.netpublikationer.dk/um/9229/html/chapter09.htm [Accessed 22nd March 2012] 203 Zaltman, G., HOW CUSTOMERS THINK Essential Insights into the Mind of the Market, Harvard Business School Press, Boston, Massachusetts, 2003, (p. 12) 204 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application, Psychology & Marketing, June 2011, Vol. 28 Issue 6, (p. 611) 205 Lakoff, G., Johnson, M., PHILOSOPHY IN THE FLESH The Embodied Mind And Its Challenge To Western Thought, Basic Books, New York, 1999, (p. 13) 206 Hubert, M., Does neuroeconomics give an impetus to economic and consumer research?, Journal of Economic Psychology, October 2010, Vol. 31 Issue 5, (p. 813) 207 McPhee, N., Laybourne, P., VENI VIDI VICI Methodological Synergy, ESOMAR WORLD RESEARCH PAPER, Qualitative 2007, Part 3 / Hybrid Methods, 11/2007, (p. 21) 208 Ibid, (p. 21) 209 Lee et al, What is ‘neuromarketing’? A discussion and agenda for future research, International Journal of Psychology 2007, No. 63, (p.203)

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3. Research Philosophy and Design 3.1 Philosophical and Strategic Approach Saunders et al (2009)210 suggest research includes the researcher being aware of his personal belief system of the world. Hence the researcher’s philosophical understanding induces the way how knowledge is being defined and how it is being acquired. As the project investigates how neuroscientific insights can add value to consumer research, and whether their use might become a precondition to maintain competitive advantage for companies in consumer markets, the research contains both: a number of scientific implications on the topic of neuroscience, and an applied approach addressing the managerial aims in a given economical context.

As knowledge about natural sciences (i.e. neuroscience) is so fundamental, it should be gained by using ‘objective facts’ leading to reliable theories and should neither be affected by researchers’ individual interpretations nor by societal, political or religious motives. Regarding natural sciences the author prefers a positivist approach, that is, strictly using methodologies which analyse phenomena free from biases resulting from researchers’ ways of conducting research (Gill and Johnson: 2010)211 so that other researchers, carrying out the same investigations under similar circumstances, should gain similar results. Since in the context of this project the research also considers social phenomena and human beings judging and interpreting scientific data, a critical

realist view seems to be rather realistic to contextualise the findings. As Dobson (2002)212 says “Our knowledge of reality is a result of social conditioning and, thus,

cannot be understood independently of the social actors involved in the knowledge derivation process.”

Merging scientific and applied approaches in this project, the research philosophy can be labelled pragmatism in the sense (Saunders et al: 2009)213 discuss it – that is, being guided by the research question and an achievable aim in the real socio-economic world rather than by a philosophical position towards research. 210 Saunders et al, Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 (p. 108) 211 Gill, J., Johnson, P., Research Methods for Managers, 4th Edition, SAGE Publications, London, 2010, (pp. 193-195) 212 Dobson, P.J., Critical realism and information systems research: why bother with philosophy?, Information Research, January 2002, Vol. 7, No. 2, [Online] Available from http://informationr.net/ir/72/paper124.html [Accessed 13th May 2012] 213 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 (p. 109)

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Being clear about the research philosophy it is important to determine the research r strategy – hence theory testing involves a completely different approximation to rer search than theory building as illustrated in figure 9.

Figure 9 Deductive ctive Versus Inductive Approach to Research

Source: de Vaus (2001)214 Research Design in Social Research

The extent to which the research is conducted corresponds with a deductive approach in which the approximation to the topic starts with a theory followed by corresponding theses, a hypothesis, and a research question being deduced. Still, Bryman and Bell (2007)215 suggest being deductive is no clear exclusion of inductive elements and vice versa. This is especially noteworthy as deductive reasoning rather attempts to investiinvest gate what actually occurs, occurs whereas inductive reasoning refers to an understanding of the why of given phenomena (Saunders et al: 2009)216 which is relevant when it comes to o the interpretation of findings.

214

de Vaus, D., Research Design in Social Research, SAGE Publications, London, 2001,( p. 6) 6 Bryman, A., Bell, E., business research methods, 2nd Edition, Oxford University Press, New York, 2007, (p. 14) 216 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009,, (p. 126) 215

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3.2 Research Design Given that two basic aspects have to be investigated – on the one hand whether neuroscientific insights can provide valuable insights to consumer research, and on the other hand whether their use is a precondition to maintain competitive advantage – it is not only important to assess neuroscientific state-of-the-art insights (scientific approach) but also to portray the actual situation in consumer markets (applied approach). Portraying the actual situation in the sense Saunders et al (2009)217 comprehend it, means being descriptive. To not only provide an overview of what is being the prevalent situation, the research uses the descriptive elements as a precursor to synthesise ideas and findings which is being defined as descriptive-explanatory (Saunders et al: 2009)218.

To further enhance the approach to the research question the author chooses parallel

mixed methods research – that is, using quantitative data (online survey) and qualitative data (semi-structured expert interviews) in parallel. This not only to rule out a

method effect which derives from the fact that “Results will be affected by the techniques and procedures used” (Saunders et al 2009: p 154)219. Besides, quantitative data is rather devoted to what questions whereas qualitative data also address the

why and how questions which might lead to useful inferences enhancing the research findings. Although mixed methods research is more time consuming and Saunders et

al (2009)220 alert using mixed methods also raises the risk of unanticipated outcomes, Johnson and Onwuegbuzie (2004)221 unambiguously support mixed methods research as it offers the possibility to benefit from the strengths of each method by simultaneously minimising its respective weaknesses. They argue “Taking a mixed position al-

lows researchers to mix and match design components that offer the best chance of answering their specific research questions” (Johnson and Onwuegbuzie 2004: p. 15)222. Moreover they refer to the point that mixed methods research especially suits for practicing researchers. In sum, Johnson and Onwuegbuzie (2004)223 state five major favourable purposes for conducting mixed methods research (table 11).

217

Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009, (p. 140) 218 Ibid, (p. 140) 219 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 220 Ibid, (p. 154) 221 Johnson, R.B., Onwuegbuzie, A.J., Mixed Methods Research: A Research Paradigm Whose Time Has Come, Educational Researcher, October 2004, Vol. 33, No. 7, (pp. 14-15) 222 Ibid 223 Ibid, (pp. 21-22)

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Table 11 Mixed Methods Research – Five Major Purposes

Source: own design adapted from Johnson and Onwuegbuzie (2004)224 Mixed Meth-

ods Research: A Research Paradigm Whose Time Has Come Especially for small sample market research Bock and Sergeant (2002)225 emphasise the researcher’s obligation to maintain ethical responsibility by informing whether relevant research criteria (i.e. reliability and validity) are achieved in the case their defined principles (Bock Bock and Sergeant: Sergeant 2002)226 are not being met.

224

Johnson, R.B., Onwuegbuzie, A.J., Mixed Methods Research: A Research Paradigm Whose Time Has Come, Educational Researcher, October 2004, Vol. 33, No. 7, (pp. 21-22) 21 225 Bock, T., Sergeant, J., Small sample market research, International Journal of Market Research, 2002, Vol. 44, Quarter 2,(p. 243) 226 Ibid2, (p. 241)

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3.2.1 Reliability Golafshani (2003)227 recapitulates quantitative research assures reliability if data collection and measurement techniques of a research project result in consistent findings over time and are replicable with the same method by other researchers. However, Golafshani (2003)228 argues as qualitative research refers to the purpose of under-

standing (whereas quantitative research is rather devoted to explaining) the notion of reliability is better discussed by using the term dependability. This corresponds with Onwuegbuzie and Johnson (2006)229, and Guba and Lincoln (1989)230, using the term

dependability in the sense that it includes changes in methodological approaches because of maturing reconstructions – i.e. in qualitative research it is definitely desirable that design and construction of a research matures in a trackable manner over time. Reliability is closely related to validity as it is prerequisite for validity inducing if a research lacks reliability it cannot be valid either (Bryman and Bell: 2007)231. Since both research departments aim at conducting research in a manner that ensures minimising sources of impairments, and taking into account that the prevalent project predominantly relies on quantitative research, the author refers to the quantitative standards regarding reliability and validity.

227 Golafshani, N., Understanding Reliability and Validity in Qualitative Research, The Qualitative Report, December 2003, Vol. 8, No. 4, (p. 601) 228 Ibid, (p. 599) 229 Onwuegbuzie, A.J., Johnson, R.B., The Validity Issue in Mixed Research, RESEARCH IN THE SCHOOLS, 2006, Vol. 13, No. 1, (p. 49) 230 Guba, E.G., Lincoln Y.S., Fourth Generation Evaluation, Sage Publications, London, UK, 1989, (p. 242) 231 Bryman, A., Bell, E., business research methods, 2nd Edition, Oxford University Press, New York, 2007, (p. 168)

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3.2.2 Validity To assess validity in quantitative research, data collection methods truly have to measure what they intend to measure (Golafshani: 2003)232. Whereas internal validity presumes that research findings base on the researcher’s interventions and not on any weakness in the research design (Saunders et al: 2009)233, external validity results from the generalisability of research findings, i.e. they are also applicable in other research settings (Bryman and Bell: 2007)234. Conducting research implies a lot of challenges with regard to validity, i.e. proper research design, data collection, data analysis, and data interpretation – and proper data integration is an additional issue in mixed methods research (Onwuegbuzie, and Johnson: 2006)235. I.e. referring to sam-

ple integration legitimation Onwuegbuzie and Johnson (2006: p. 56)236 state being able to construct meta-inferences the researcher has to ensure that exactly the same target group is involved in quantitative and qualitative research. With regard to external validity Saunders et al (2009)237 suggest external validity is no issue as long as researchers do not claim that their results in a given context are generalisable to others. To enhance internal validity the findings from qualitative and quantitative research shall be cross-checked by means of triangulation which – according to Bryman and Bell (2007)238, and (Golafshani: 2003)239 – is supposed to improving confidence in findings by ensuring convergence from different measurement techniques and sources.

232 Golafshani, N., Understanding Reliability and Validity in Qualitative Research, The Qualitative Report, December 2003, Vol. 8, No. 4, (p. 599) 233 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009, (p. 143) 234 Bryman, A., Bell, E., business research methods, 2nd Edition, Oxford University Press, New York, 2007, (p. 43) 235 Onwuegbuzie, A.J., Johnson, R.B., The Validity Issue in Mixed Research, RESEARCH IN THE SCHOOLS, 2006, Vol. 13, No. 1, (pp. 48-63) 236 Ibid 237 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009, (p. 158) 238 Bryman, A., Bell, E., business research methods, 2nd Edition, Oxford University Press, New York, 2007 (pp. 412-413 and 646-647) 239 Golafshani, N., Understanding Reliability and Validity in Qualitative Research, The Qualitative Report, December 2003, Vol. 8, No. 4, (p. 604)

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3.3 Measuring Instruments So far the research has discussed market relevant aspects and neuroscientific insights on the basis of secondary data (i.e. specialist books, peer-reviewed journals, studies and surveys, topic-relevant websites and articles). To assess the research question in the prevalent economical context, primary data is essential. Referring to the deductive approach survey strategy (Saunders et al: 2009)240 seems to be appropriate assessing relevant respondents via standardised online questionnaire, thus serving the

descriptive-explanatory research. Besides, and given the constraints that the research has to be done by the author (i.e. capacity, budget, and resources), online questionnaires are considered to be economical, can be sent to a larger audience and are relatively easy to administer. Moreover, they are accepted within business and management and allow the collection of standardised data which can be analysed on the basis of analysis software subsequently (Saunders et al: 2009)241. Data collection can be easily executed by means of online survey software tools – such as EFS Survey by QuestBack (2012)242 which is used for free for this project as it is made available by the University of Wales’ partner HFU.

Still, as structured questionnaires rather refer to what questions and the research also wants to address the why questions to uncover more specific and unknown aspects, qualitative data should enhance findings. For so doing Bryman and Bell (2007)243 suggest semi-structured interviews as they leave – in contrast to structured interviews – more leeway to react to new aspects. Saunders et al (2009: p. 323)244, referring to Bryman (2006)245, support that saying using semi-structured interviews may serve as a suitable measure to “validate findings from questionnaires”. These are considered as convincing arguments to enhance the present research by means of qualitative data.

240

Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 (pp. 144 and 362) 241 Ibid, (p. 144) 242 QuestBack AG, EFS Survey 2012, [Online] Available from http://www.questback.de/loesungen/marktforschung/online-befragung.html [Accessed 15th March 2012] 243 Bryman, A., Bell, E., business research methods, 2nd Edition, Oxford University Press, New York, 2007 (pp. 473-479) 244 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 245 Bryman, A., (ed.), Mixed methods research: Volume 1, SAGE Publications, London, 2006 (pp. XXV-LII)

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3.3.1 Online Survey The survey consists of an introductory email written in English and German – the appropriate language version to be selected in the later administration process to attain the recipients in their relevant language (Appendix I). The email includes a link directly connecting to the bilingual questionnaire (Appendix II), and an email reminder also bilingually composed (Appendix III). Utmost care was taken to maintain ethical standards (Saunders et al: 2009)246. Creditability and confidence are established by clearly disclosing the research purpose, the reason for the research (MBA degree to be achieved at the University of Wales), including the assurance that ethical research standards are maintained and confidentiality and anonymity are ensured. To overcome lack of perceived value in answering the questionnaire it is offered to make the findings available as per request (see Appendix I). To further enhance the response rate the questionnaire itself and the questions are carefully and understandable designed (Appendix IV). As Saunders et al (2009)247 emphasise the questionnaire design does not only affect the response rate but also reliability and validity, utmost care was taken not to undermine both by technically ruling out the possibility to fill in the questionnaire twice, phrasing the questions value-free, constructing them in a manner enabling consistent understanding and interpretation (Saunders et al: 2009)248, and by clear wording using familiar expressions understandable to access the research-relevant meaning. Moreover, the translation process was carefully executed ensuring the same meaning in both languages (Saunders et al: 2009)249.

Still, as the research is taken by self-administered questionnaire via email, it cannot be ruled out that it has not been completed by the respondents themselves (reliability).

246

Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 (pp. 170-185) 247 Ibid, (p. 362) 248 Ibid, (p. 373) 249 Ibid, (pp. 383-385)

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3.3.2 Semi-Structured Expert Interviews Semi-structured interviews were likewise carefully prepared. Creditability, ethical standards and confidence are being established in the same way as done with the survey questionnaire. Moreover, as suggested by Saunders et al (2009)250, a Consent

Form (Appendix V) was supplied to the interviewees in advance accompanied by a set of guiding questions (Appendix VI) enabling them to being prepared for the interview. To encourage the interviewees to provide enlightening answers on the one hand, and to ensure maximum reliability and validity on the other, the questions from the online survey were simply being reconstructed into open questions. Interviewing competence was being achieved by attentive literature review in advance (i.e. Saunders et al: 2009251; Schnell et al: 2011)252.

250

Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 (pp. 190-193) 251 Schnell, R., Hill, P.B., Esser, E., Methoden der empirischen Sozialforschung, 9. Auflage, [Methods of Empirical Social Research, 9th Edition], Oldenbourg Verlag, M端nchen, 2011 (pp. 257-259) 252 Ibid, (pp. 315-323; 378-381)

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3.4 Sampling, Administration and Data Collection 3.4.1 Sampling The applied approach to answer the prevalent research question and to verify/falsify the relevant theses presumes to investigate the actual situation in consumer markets. Schnell et al (2011)253 argue to properly execute xecute empiric research the target popula-

tion, to which the research findings are to be applied later, later has to be defined in ada vance. Moreover, as illustrated in figure 10,, researchers have a potpourri of sampling techniques at hand.

Figure 10 Sampling Techniques

Source: Saunders et al (2009)254 Research Methods for Business Students

Hence, defining the target population and the sampling technique(s) constitutes ana other challenge for a researcher facing constraints with regard to budget, capacity, and access to data.

253

Schnell, R., Hill, P.B., Esser, ser, E., Methoden der empirischen Sozialforschung, 9. Auflage, [Methods of Empirical Social Research, 9th Edition], Oldenbourg Verlag, M端nchen, 2011 (pp. 257-259) 257 259) 254 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 (p. 213)

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For the present research, defining the target group, means selecting senior position holders in a) companies dealing in the consumer market, b) advertising/media agencies doing advertising/media and research for them, and c) consulting companies advising them in the relevant areas. As companies acting in consumer markets often employ agencies and consultants for media, marketing and advertising-related questions, they should be included into the research.

Keeping the size of the consumer market in mind, it is almost impossible for the researcher to approach complete market coverage. However, the target group could be limited by focussing on a special sector (i.e. FMCG). Still, it would not be possible for the researcher to get data from all relevant companies in the FMCG sector, not to speak from the agencies/consultancies working for them. Hence sampling techniques have to be considered. As can be seen from the decision tree (figure 10) – a researcher has to decide initially whether to use probability or non-probability sampling. Saunders et al (2009)255 state probability sampling – in contrast to non-probability sampling – implies that each object (respondent) has an equal chance to being selected from the target population (random selection). As random selection presupposes that the researcher can access the randomly selected objects subsequently, there is no point in executing random selection for the researcher facing constraints regarding data accessibility.

Hence the researcher has adopted a pragmatic approach regarding the research philosophy she also adopts a pragmatic approach with regard to the sampling technique(s). Saunders et al (2009: p. 237)256 state purposive sampling (one technique of non-probability sampling) is suitable to “select cases that will best enable you to an-

swer your research question(s) and to meet your objectives.” However, they alert these samples are not statistical representative for the target population (Saunders et

al: (2009)257.

255

Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 (p. 213) 256 Ibid, (pp. 237-239) 257 Ibid, (p. 239)

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To keep biases in selecting an appropriate sample for the online survey to an absolute minimum,, the sampling frame for companies in the consumer industry is taken from Millward Brown’s (2011)258 BRANDZ TOP 100 Most Valuable Global Brands 2011 study (table 12).

Table 12 BRANDZTOP 100 Most Valuable Global Brands 2011

Source: Millward Brown (2011)259 BRANDZ TOP 100 Most Valuable Global Brands

2011 It is argued that the TOP 100 Most Valuable Global Brands 2011 predominantly owe their success to sophisticated marketing and consumer research of the relevant comco panies. Hence sampling criteria imply a) TOP brand (inducing sophisticated marketing and brand d management) b) globally acting companies (ensuring minimum company size) c) companies belonging to the consumer market (dedicated to the study delimidelim tation).

258

Millward Brown, BRANDZ  TOP 100 Most Valuable Global Brands 2011, [Online] Available from http://www.millwardbrown.com/Libraries/Optimor_BrandZ_Files/2011_BrandZ_Top100_Report.sflb.ashx http://www.millwardbrown.com/Libraries/Optimor_BrandZ_Files/2011_BrandZ_Top100_R eport.sflb.ashx [Accessed 9th May 2012] 259 Ibid

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To access senior position holders within the media agency sector the sampling frame consists off agencies ranked by RECMA in 2010 (table ( 13)) according to their billings in Germany (Absatzwirtschaft: 2011)260

Table 13 Media Agency Germany Billings 2010

Source: Absatzwirtschaft (2010)261 Agency Ranking grows with two digits according to

RECMA

260

Absatzwirtschaft, Agentur-Ranking Agentur– Mediageschäft wächst laut Recma zweistellig, [Agency Ranking grows with two digits according to RECMA [Research Company Evaluating the Media Agency Industry], October 4, 2010, [Online] Available from http://www.absatzwirtschaft.de/content/communication/news/mediageschaeft http://www.absatzwirtschaft.de/content/communication/news/mediageschaeft-waechst-laut laut-recmazweistellig;74988;0 [Accessed 9th May 2012] 261 Ibid

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The sampling frame for advertising ad agencies (table 14) is selected from the ranking of the Top 30 in Germany 2011 according to their billings (HORIZONT: 2012)262. Table 14 Advertising Agency Germany Billings Bi 2010

Source: HORIZONT (2012)263 Top 30 communication companies in Germany 2011

262

HORIZONT, Top 30 Kommunikationsdienstleister in Deutschland 2011, [Top 30 communication communica companies in Germany 2011], December ember 2011, [Online] Available from http://www.horizontstats.de/statistik/daten/studie/168621/um http://www.horizontstats.de/statistik/daten/studie/168621/umfrage/top-30-kommunikationsagenturen kommunikationsagenturen-indeutschland/ [Accessed 9th May 2012] 263 Ibid

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Finally, to access a sample frame for f consultants (table 15) the researcher uses Firmconsulting’s Annual Management Consulting Rankings – 2010/2011 (2011)264.

Table 15 Annual Management Consulting Rankings R 2010/2011

Source: Firmsconsulting (2011)265 Annual Management Consulting Rankings –

2010/2011

264 Firmsconsulting, Annual Management Consulting Rankings – 2010/2011, February 16, 2011, [Online] Available from http://firmsconsulting.com/2011/02/16/annual-management-consulting-rankings http://firmsconsulting.com/2011/02/16/annual rankings-20102011/ [Accessed 9th May 2012] 265 Ibid

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After the selection of the appropriate senior position holders within the respective sampling frames including their email addresses on the internet, 81 objects were identified. As mentioned earlier, the selection of objects within the sampling frames could not be executed randomly as it was not possible for the researcher to assess all the relevant contact details on the internet. In so far statistical relevance cannot be deduced from the resulting findings (Schnell et al 2011)266. Being aware that the sample size is relatively small, and to enlarge the sample size, the researcher has decided to encourage the objects to forward the email including the link to the online survey to those objects within their network, who correspond to the sampling frames (snowball

sampling).

The selection of interviewees bases on the BRANDZ and the RECMA study and on their expertise and – for sample integration legitimation reasons (Onwuegbuzie and Johnson: 2006)267 – belong to the same target group as the sample frames selected for the online survey (i.e. Head of Global Research, FMCG; Research Director, International Media Agency). It is argued that their expertise stems from being a top position holder, and having at least published articles in peer-reviewed journals.

266 Schnell, R., Hill, P.B., Esser, E., Methoden der empirischen Sozialforschung, 9. Auflage, [Methods of Empirical Social Research, 9th Edition], Oldenbourg Verlag, München, 2011, (p. 462) 267 Onwuegbuzie, A.J., Johnson, R.B., The Validity Issue in Mixed Research, RESEARCH IN THE SCHOOLS, 2006, Vol. 13, No. 1, (p. 56)

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3.4.2 Administration and Data Collection Further to the preparation, careful administration and execution of the online survey was executed in accordance with a strict timetable foreseeing a duration of 10 days from the start to the end of the survey (table 16) allowing immediate intervention ensuring participation of the selected respondents (day 1/FOLLOW UP 1) and enhancenhan ing the response rate by means of an email reminder (day 7/FOLLOW UP 2). Table 16 Administration of Primary Research - Online Survey Questionnaire

Source: own design

Due to snowball sampling the final participation rate cannot be deduced educed from the initial sampling frame (81 selected objects). Still, the total number of participants is 26 of which 3 only clicked through the questionnaire without responding. Anyhow, 23 participants filled in the questionnaire and 20 of them finalised it.

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As depicted in table 17, 1 administration and execution of semi-structured structured expert interviews have been executed with the same accuracy as with the online survey to achieve maximum standards with regard to reliability, validity, and to eventually stick to ethical research standards.

Table 17 Administration of Primary Research - Semi-Structured Expert Interviews

Source: own design

As the extensive literature review focuses on the scientific implications of neuroscineurosc ence to consumer research there is the need to also assess the applied approach by investigating the managerial approximation to the topic from an economically driven viewpoint. Hence the two neuroscientists neuroscientis were ere excluded from being interviewed.

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4. Data Presentation and Analysis 4.1 Introduction The research question presupposes that competitive advantage is appreciated to being crucial for a company’s sustainable economic success. Along with this it is expected that present and future market conditions evolve in so far that competitive environments in consumer markets become more and more challenging so that company excellence (here: assessing best consumer insight by means of integrating neuroscientific insights) becomes one precondition for maintaining competitive advantage. This is confirmed by literature research (i.e. Chapter 2.1 and 2.4). The initial assumptions have also been queried by means of primary data collection in order to see whether primary data support the idea which was already confirmed by literature research. Hence the first three questions in both, online questionnaire and semistructured expert interviews, are not dedicated to the prevalent topic of neuroscientific contribution to consumer research, but also to investigate whether secondary data findings are shared by managers and thus are being confirmed in the prevalent economical context. The results (figure 11, 12, 13) are presented as an initial start to show that similar market understanding between scholars and economy exists. As can be seen in Q1 (figure 11), by providing their degree of consent with five determined statements, the majority of survey participants agree with the fact that consumer markets become more challenging in the coming years. Figure 11 Statements Evaluating Consumer Markets

Source: own design

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Interestingly both interviewees state competition has already reached 100% since the last ten years, one of them adding especially “in the FMCG sector competition is al-

ready murderous”. Besides, the majority of survey participants and both interviewees consider innovations as a KPI for business success – the FMCG expert emphasising

“Still, in our company, 40% of the turnover results from new products.” Regarding the evaluation of potential determinants for market success (Q2, figure 12) the survey participants’ view is that especially clear positioning and branding will considerably increase, followed by advertising and promotion. Figure 12 Determinants of Success in Consumer Markets

Source: own design

Not being provided with a pre-selection of aspects, one interviewee clearly considers

emotional branding as a precondition for success and thinks that all other determinants will remain stable, whereas the other interviewee considers “listening to the

customer-voice as the measure of all things.”

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Given the chance to rank potential KPIs as to the survey participants’ importance in Q3, strong brand equity clearly dominates followed by successful product innovations,

enhancement of customer satisfaction and increasing relative market share (figure 13). Interestingly, this goes exactly in line with P&G’s (2012)268 strategic focus.

Figure 13 KPIs for Business Success in Consumer Markets

Source: own design

Unaided, one expert clearly suggests emotional branding as KPI, whereas the other interviewee highlights “the indispensible willingness to deal with consumers’ view-

points” and “a governed process allowing a company a constant critical enquiry whether this is the case.”

All in all, secondary and primary data support the idea that the prevalent market conditions in consumer markets are highly competitive and that especially branding, innovations, and customer insight serve as a precondition for gaining competitive advantage. It is the author’s view that this similar understanding is prerequisite to further evaluate the results of the research question on a sound basis. 268 Procter & Gamble, Company Strategy – Strategic Focus, [Online] Available from http://www.pg.com/en_US/investors/company_strategy.shtml [Accessed 21st January 2012]

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4.2 Research Relevant Secondary & Primary Data Literature research reveals the many starting points for CR to integrate consumer neuroscience into its research repertoire – i.e. McPhee and Leybourne (2007)269, methodological synergy; Quartz and Asp (2005)270, emotion-based brand equity measures; and Ariely and Berns’ (2010)271 product development cycle (Chapter 2.2.2 and 2.4). Being asked to evaluate options for possible neuroscientific applications in Q4 (figure 14), survey participants clearly opt for their use especially during the product development process (approx. 48%), and for testing the effect of ad campaigns (approx. 43%). And still approx. 29% consider brain-based brand equity measures as important. Figure 14 Assessing Neuroscientific Contributions to Consumer Research

Source: own design

In contrast, both interviewees argue neuroscientific imaging methods are by far too expensive to be used by CR in daily business. Both argue basic research on consumer neuroscience delivers sufficient insight to be appreciated in an economical context and point to the importance to keep up with the latest findings of consumer neuroscience but not with brain imaging methods done by companies themselves.

269

McPhee, N., Laybourne, P., VENI VIDI VICI Methodological Synergy, ESOMAR WORLD RESEARCH PAPER, Qualitative 2007, Part 3 / Hybrid Methods, 11/2007, (p. 21) 270 Quartz, S., Asp, A., Brain branding – brands on the brain, Social Cognitive Neuroscience Laboratory, California Institute of Technology, USA, In: The ESOMAR Annual Congress, Cannes, September 2005, (p. 4) 271 Ariely, D., Berns, G., S., Neuromarketing: the hope and hype of neuroimaging in business, Nature – Nature Reviews Neuroscience, April 2010, Vol. 11, (p. 286)

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Both experts have experienced consumer neuroscience applied in CR by cooperating with scientists of different universities. Besides acknowledging the value of neuroscientific insights they argue that their prevalent tools – one using IAT (pre- and postdesign application) and the other a tool measuring the persuasion value of marketing campaigns to estimate the behavioural effect on sales (post-design application) – are proof and economical, delivering sufficient consumer insight (apart from the potpourri of research methods traditional CR provides) and, with reference to reach, are empirically sound. Still, with special reference to McPhee and Laybourne’s (2007)272 study (Chapter 2.2.2) one expert acknowledges “As a complementary research neuroscien-

tific brain imaging features could be interesting as they can provide insight on the reasons for behaviour.”

As can be seen from Q5 (figure 15), 60% of the survey participants report that they already apply neuroscientific insights and being asked about future planning in Q6, only 14% clearly refrain from using it (figure 16).

Figure 15 Current Use of Neuroscientific Insights

Source: own design

Figure 16 Potential Use of Neuroscientific Insights

Source: own design

Being asked in Q7 (figure 17, 18) in which areas neuroscientific insights are applied, in varying intensity 80% of the survey participants especially have experience with testing and evaluating ad campaigns, and with the use in the product development process (60%).

272 McPhee, N., Laybourne, P., VENI VIDI VICI Methodological Synergy, ESOMAR WORLD RESEARCH PAPER, Qualitative 2007, Part 3 / Hybrid Methods, 11/2007, (pp. 1-23)

80


Figure 17 Areas of Use of Neuroscientific Insights

Source: own design

Prompted to fill in other possible usages 75% of the respondents who answered completed the question with other applications in varying degrees (figure 18). Figure 18 Additional Areas of Use of Neuroscientific Insights

Source: own design

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As far as limitations are concerned (Q8, figure 19), 35% of online participants especially consider costs of neuroscientific imaging technologies as an issue, followed by the difficulty for companies to access relevant knowledge resources. Interestingly, the issue of empirical evidence due to small sample sizes is estimated unequally but does not seem to have such particular importance as it has for one of the experts. Figure 19 Issues Limiting the Use of Neuroscience

Source: own design

Both experts also consider costs as the biggest issue. Additionally both mention the

‘laboratory effect’ (i.e. ‘non-biotic’ situation and noise-contamination) and that neuroscientific imaging methods (i.e. fMRI) cannot reproduce the diverse marketing settings in which consumer decision-making takes place. Other reservations with respect to neuroscientific brain imaging tools result from different understandings: Whereas one expert predominantly focuses on the issue that study sizes are by far too small to gain empirical evidence, the other expert rather focuses on the ethical aspect saying “Our

company decided to communicate rather transparent than suggesting the impression that we have to put the consumer into a ‘tube’ in order to get insight.” These main issues – among others – have also been revealed by literature research (Chapter 2.5) suggesting a cautious and professional approach regarding neuroscientific experimental settings and their transference into real-world economical settings.

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Literature review suggests consumer neuroscience helps getting a better understanding of consumers’ subconscious and the underlying motivations to buy. Hence many possible applications for its use are being demonstrated with several studies (Chapter 2.3.3.). Being asked in Q9 (figure 20) if refraining from using neuroscientific insights leads to competitive disadvantage, online survey participants’ responses are mixed. Whereas 40% are not sure, with 15% the percentage of those who tend to agree is similar to those who tend to disagree. However, agreement (20%) is twice as high as disagreement (10%).

Figure 20 Neuroscience and Competitive Advantage

Source: own design

In contrast, both experts have the clear and single view that neglecting consumer neuroscience leads to competitive disadvantage as consumer insight is considered as prerequisite for competitive advantage. Although one expert states that “DAX compa-

nies are not the Fraunhofer Institute” he unambiguously votes for the use of insights being acquired by basic neuroscientific research.

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When it comes to the decision which resources have to be used to acquire neuroscientific insights (Q10, figure 21), online survey respondents are divided into two camps – the ones who suggest the cooperation with universities (55%) and those who suggest relying on neuromarketing agencies (45%).

Figure 21 Sources of Gaining Neuroscientific Insights

Source: own design

Both experts clearly opt for the cooperation with universities whereas one interviewee unambiguously supports what literature research has also revealed – the hype of neuromarketing leads to the danger that neuromarketing agencies “with self-designed

tools” pretend to promise what they cannot keep or what leads to results which are “misleading as they rely on questionable research approaches.”

Being asked on which research options CR should rely in future (Q11, figure 22, 23), the picture of online participants’ opinions is diverse. Figure 22 shows that the most common research methods are appreciated in varying extents. Most respondents clearly opt for panel data, followed by personal interviews as the main instruments. Still, neuroscientific insights are selected by 20% to be considered to a large extent.

84


Figure 22 Future Resources to Gain Customer Insight

Source: own design

Those participants who opted for other use in Q11 (figure 12 ‘other’), were being prompted to fill in possible options as shown in figure 23. Figure 23 Additional Future Resources to Gain Customer Insight

Source: own design 85


These insights suggest that research methods are more diverse than expected and that researchers really take advantage of several research methods. The compartmental difficulties as depicted by Simonson et al (2001)273, and McPhee and Laybourne (2007)274 do not seem to constrain research in daily business.

Demographic data from the survey participants show that the target group has been met. Although it is not likely, it cannot be excluded to 100% that the questionnaires have not been filled in by the respondents themselves (reliability). According to Q12 (figure 24), respondents can be subdivided into three compartments – agencies (65%), participants belonging to companies active in consumer markets (30%), and consultancies (5%). Figure 24 Ratio of Online Survey Participating Companies

Source: own design

The 65% of respondents who replied from agencies (Q12, figure 24) predominantly belong to the compartment which states that their companies have less than 250 employees (Q13, figure 25). Hence it is assumed that although the most agencies belong to large and global networks, some respondents rather refer to their subsidiary in their relevant home country when it comes to a specification.

273 Simonson et al, Consumer Research: In Search of Identity, Annual Review of Psychology 2001, No. 52, (p. 267) 274 McPhee, N., Laybourne, P., VENI VIDI VICI Methodological Synergy, ESOMAR WORLD RESEARCH PAPER, Qualitative 2007, Part 3 / Hybrid Methods, 11/2007, (p. 21)

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Figure 25 Ratio of Size of Online Survey Participating Companies

Source: own design

Also the answers to Q14 demonstrate that the targeted response group (senior position holders) has been met (figure 26). This is considered as being important hence it is assumed that senior position holders are more likely to have unbiased information about the real intentions and proceedings of their companies’ strategies.

Figure 26 Ratio Position Holders of Online Survey Participating Companies

Source: own design

Primary online survey data result from responses of 23 participants of which 20 finalised the questionnaire. The problem of item non-response (reliability) is primarily not

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being considered as crucial issue as the survey questions have been designed to being interpreted consistently (Saunders et al: 2009)275 and as the questionnaire does not contain sensitive questions. Hence refusal in answering the survey questions does not seem to be systematic and thus does not necessarily lead to biased results (de Vaus: 2001)276. Moreover, statistical inferences cannot be deduced from the resulting findings due to non-probability sampling (de Vaus: 2001)277, (Schnell et al 2011)278. Hence under the prevalent circumstances the study does not claim to be generalisable (external validity).

Online survey data analysis (descriptive statistics) as well as the generation of charts has been executed by using Microsoft Excel.

275

Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009, (p. 373) 276 de Vaus, D., Research Design in Social Research, SAGE Publications, London, 2001,( pp. 147-148) 277 Ibid,( p. 90) 278 Schnell, R., Hill, P.B., Esser, E., Methoden der empirischen Sozialforschung, 9. Auflage, [Methods of Empirical Social Research, 9th Edition], Oldenbourg Verlag, M端nchen, 2011, (p. 462)

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5. Summary of Results and Triangulation 5.1 Summary of Results: Secondary Data Literature review suggests that from a scientific point of view consumer neuroscience should be integrated into CR in order to reduce flawed outcomes from biased research findings (Zaltman: 2003)279, (Camerer et al: 2005)280, (Reimann et al: 2011)281. It is further argued that flop rates of 70% (Serviceplan: 2006)282 or 80% (Haig: 2011)283 can significantly constrain economic success in consumer markets and therewith competitive advantage. Moreover, considering JP Morgan’s (2009)284 and AdvertisingAge’s (2011)285 figures on the amount spent on advertising only in the US, economic relevance is high. Clear options for using consumer neuroscience and possible utility for economy are provided (Hubert and Kenning: 2008)286. This is demonstrated and confirmed by several scientific studies (Chapter 2.4) which show that:

a) brand equity can be enhanced by emotional branding considering neuroscientific insights (Quartz and Asp: 2005)287, (Esch and Möll: 2009: p. 25)288 (thesis 1),

279

Zaltman, G., HOW CUSTOMERS THINK Essential Insights into the Mind of the Market, Harvard Business School Press, Boston, Massachusetts, 2003, (pp. 16-17) 280 Camerer et al, Neuroeconomics: How Neuroscience Can Inform Economics, Journal of Economic Literature, March 2005, Vol. XLIII, (p. 37) 281 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application, Psychology & Marketing, June 2011, Vol. 28 Issue 6, (p. 611) 282 See also: Serviceplan’s Press Release on the results of the 2006 study on Flop Rates on FMCGs in Germany [online] available from http://presse.serviceplan.de/uploads/tx_sppresse/301.pdf [Accessed 15th January 2012] 283 Haig, M., BRAND FAILURES The Truth About the 100 Biggest Branding Mistakes of All Time, 2nd Edition, Kogan Page, London, 2011, (p. 6) 284 JP Morgan, North America Equity Research, Advertising & Marketing Services, Advertising 101: A Primer with a Focus on Macro Trends, 02. April 2009, (pp. 9 and 11) [Online] Available from http://s3.amazonaws.com/zanran_storage/www.adweek.com/ContentPages/110487574.pdf [Accessed 15th January 2012] 285 AdvertisingAge, U.S. Ad Spending Grew 6.5% in 2010 as Auto Surged and Pharma Hit a Low, March 17, 2011, [Online] Available from http://adage.com/article/mediaworks/u-s-ad-spending-grew-6-5-2010-autorose-pharma-fell/149436/ [Accessed 15th January 2012] 286 Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (p. 274) 287 Quartz, S., Asp, A., Brain branding – brands on the brain, Social Cognitive Neuroscience Laboratory, California Institute of Technology, USA, In: The ESOMAR Annual Congress, Cannes, September 2005, (pp. 1-13) 288 Esch, F.R., Möll, T., Ich fühle, also bin – Markenemotionen machen den Unterschied, [I feel, therefore I am – emotions towards brands make the difference], Marketing Review St. Gallen, April 2009, (p. 25)

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b) neuroscience with its diverse approaches to ameliorate the application of the marketing-mix offers possibilities for a holistic access to consumers’ emotions and motivations to buy (Erk et al: 2002)289, (Hubert and Kenning: 2008)290, Plassmann et al (2008)291, McGeuens et al (2011)292 (thesis 2), and

c) neuroscientific insights can help to reveal that long held assumptions – i.e. the relevant-set model (Silk and Urban: 1978)293, (Hauser and Wernerfelt: 1989)294 – do not hold true and that the new insights require changes in approaching consumers’ mental states (Deppe et al (2005: p. 171)295, (Kenning and Plassmann: 2005)296, (the-

sis 3). All in all, theses 1 to 3 have been confirmed by scholars and scientists so far. Still there are serious issues limiting the application of neuroscientific brain imaging technologies ranking from ethical issues, ‘laboratory effect’, to technical restrictions (Chapter 2.5) inducing Kenning and Plassmann (2005: p. 344)297 to state “Appreciating con-

tributions of neuroscience to economic modelling requires a basic understanding of the applied neuroscientific methods ... .” Costs are another issue as the investment for equipment, maintenance and scanning is high (Ariely and Berns: 2010)298, (Reimann

et al: 2011)299, (Kenning et al: 2007b)300 – although this could be reduced by cooperating with Universities.

289

Erk et al, Cultural objects modulate reward circuitry, NeuroReport, December 2002, Vol. 13 No. 18, (pp. 2499-2503) 290 Hubert, M., Kenning, P., A current overview of consumer neuroscience, Journal of Consumer Behaviour, July-October 2008, Vol. 7, Issue 4/5, (p. 275) 291 Plassmann et al, Marketing actions can modulate neural representations of experienced pleasantness, PNAS Proceedings of the National Academy of Sciences of the USA, January 2008, Vol. 105, No. 3, (pp. 1050-1054) 292 Geuens et al, Emotional advertising: Revisiting the role of product category, Journal of Business Research, 2011, (pp. 418-426) 293 Silk, A.J., Urban, G.L., Pre-Test-Market Evaluation of New Packaged Goods: A Model and Measurement Methodology, Journal of Marketing Research, May 1978, Vol. 15, No. 2, (pp. 171-191) 294 Hauser, J., R., Wernerfelt, B., The Competitive Implications of Relevant-Set / Response Analysis, Journal of Marketing Research, November 1989, Vol. 26, (pp. 393-394) 295 Deppe et al, Nonlinear Responses Within the Medial Prefrontal Cortex Reveal When Specific Implicit Information Influences Economic Decision Making, Journal of Neuroimaging, April 2005, Vol. 15, No. 2, (pp. 171-182) 296 Kenning, P., Plassmann, H., NeuroEconomics: An overview from an economic perspective, Brain Research Bulletin 67, 2005, (p. 352) 297 Kenning, P., Plassmann, H., NeuroEconomics: An overview from an economic perspective, Brain Research Bulletin 67, 2005, (pp. 343–354) 298 Ariely, D., Berns, G., S., Neuromarketing: the hope and hype of neuroimaging in business, Nature – Nature Reviews Neuroscience, April 2010, Vol. 11, (p. 288) 299 Reimann et al, Functional Magnetic Resonance Imaging in Consumer Research: A Review and Application, Psychology & Marketing, June 2011, Vol. 28 Issue 6 (p. 613) 300 Kenning et al, Applications of functional magnetic resonance imaging for marketing research, Emerald Qualitative Market Research: An International Journal, 2007b, Vol. 10, No. 2 (p. 147)

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Besides, high flop rates, exorbitant spending on advertising (AdvertisingAge: 2011)301and constantly declining ad elasticity (Sethuraman et al: 2010)302, and, i.e. the doubtful success of celebrity endorsement (ACE Metrics: 2010)303, suggest the conclusion that a lot of marketing budget is burned up by companies in the consumer market. Hence the opportunities consumer neuroscience provides in return can open up interesting perspectives if they are integrated efficiently and effectively into companies’ consumer research. Whether this leads to competitive advantage in the sense Porter (1985)304 defines it has to be proved by each company itself weighing input and output so that financial efforts are worthwhile. But as literature review reveals, there is room for improvement – and, as suggested, by using consumer neuroscience to maintain competitive advantage (research question).

301

AdvertisingAge, U.S. Ad Spending Grew 6.5% in 2010 as Auto Surged and Pharma Hit a Low, March 17, 2011, [Online] Available from http://adage.com/article/mediaworks/u-s-ad-spending-grew-6-5-2010-autorose-pharma-fell/149436/ [Accessed 15th January 2012] 302 Sethuraman et al, How Well Does Advertising Work? Generalizations from Meta-analysis of Brand Advertising Elasticities, Journal of Marketing Research, Postprint 2010, American Marketing Association (pp. 1-38) 303 ACEmetrix, Celebrity Advertisments: Exposing A Myth Of Advertising Effectiveness, Study 2010, [Online] Available from http://mktg.acemetrix.com/acton/fs/blocks/showLandingPage/a/563/p/p-001d/t/page/fm/0 [Accessed 25th April 2012] 304 Porter, M., E., Competitive Advantage, (1985), First Free Press Export Edition, Free Press, New York, 2004 (p. 3)

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5.2 Summary of Results: Online Survey A look at the online survey participants’ responses provides insight into the managerial evaluation regarding consumer neuroscience and its contribution to competitive advantage. Approx. 52% of online survey participants acknowledge the increasing importance of clear positioning and branding as a precondition for market success followed by advertising and promotion (approx. 30%) – see Q2, figure 12. Accordingly, in Q4 (figure 14) nearly 29% explicitly consider brain-based brand equity / emotional

branding measures (another 29% tend to agree), testing of ad campaigns (approx. 43% agree plus approx. 43% who tend to agree) and the product development proc-

ess itself (approx. 48% explicitly and nearly 29% tend to agree) as the most important areas for the application of consumer neuroscience. Hence it can be assumed that the answers to Q2 and Q4 implicitly suggest from a managerial viewpoint that the challenging market environment in consumer markets presupposes that consumer neuroscience is considered to play a vital role in contributing to eliciting and measuring brand equity (thesis 1).

Besides, 60% of the participants already make use of neuroscientific insights (Q5, figure 15) and, as a closer look at Q7 (figure 17 and 18) shows, replies are congruent with the answers to the preceding questions Q2 and Q4 in so far that consumer neuroscience is already in use especially in the a.m. areas – even though in varying degrees. Hence considering the answers to Q7 there is agreement that emotional branding, advertising and product development – all components of the marketing-mix – can be enhanced by also relying on consumer neuroscience (thesis 2).

From the vantage point of the present, the author unfortunately has not integrated a question how far managers think consumer neuroscience can contribute to new insights leading to the adjustment of established theories (i.e. relevant-set model) and the necessary marketing responses to them (thesis 3). It would have been interesting to know whether latest academic findings have already reached researchers’ knowledge in daily business.

Considering the responses regarding the prevalent issues concerning the application of neuroscientific brain imaging technologies (Q8, figure 19), 35% of managers are of the opinion that costs exceed the value it can contribute. Hence, being asked whether neglecting neuroscientific insights in consumer research leads to competitive disadvantage (Q9, figure 20) there is no clear picture from a managerial viewpoint. Al-

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though 20% agree, and another 15% tend to agree, with 40% being not sure there is great uncertainty on this point. However, having another look at Q11 (figure 22 and 23), all survey participants support the idea that companies should rely on neuroscientific contribution to CR within the potpourri of consumer research methods – although to a varying extent.

All in all, among the survey participants there is a rather common consent that consumer neuroscience is useful to enhance consumer insight and thus eventually contributes to economic success. But whether it is a precondition to maintaining competitive advantage in the consumer market has not been unambiguously affirmed by the online survey respondents (research question).

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5.3 Summary of Results: Semi-Structured Interviews Analysing the expert interviews delivers a more differentiated picture: With reference to thesis 1, both experts appreciate that neuroscientific insights add considerable value to understand consumers’ emotions – one expert especially referring to Damasio’s SMH (Damasio: 1994)305, the other saying “knowledge has profited a lot from

neuroscience as in some sense it allows a revival of basic psychological theories about life and behaviour” – especially referring to publications from Hans-Georg Häusel (Limbic® Types)306 and Christian Scheier307.

While both experts unambiguously acknowledge that consumer insight is prerequisite for maintaining competitive advantage and therefore explicitly appreciate the importance of neuroscience for CR, both make a clear distinction between relying on basic neuroscientific research findings and the applied approach, using neuroscientific brain imaging technologies in an economic decision-making context. This is underpinned by both experts explicitly affirming the interview question Q8 “In your view, will compa-

nies that do not rely on neuroscientific insights suffer from competitive disadvantages in the future?” In this context, one expert emphasises “There is almost a genetically obligation to inform yourself about customers and markets” adding “The huge enterprises can effort a kind of extravagance with regard to their research budgets. Our Company still has to divide the research budget carefully. Still, we are young, curious and ready to achieve new knowledge but we do not necessarily have to produce this knowledge by ourselves.” Both experts integrate neuroscientific basic research findings into their repertoire but consider traditional research methods as sufficient and empirically sound to achieve adequate customer insight in daily business. Besides one expert argues that the methods actually used in CR have evolved in so far that i.e. in quantitative interviews biases through ‘social desirability’ could be neglected as these interviews are carried out online in the meantime – referring to IAT (Implicit Association Test) via online panel mentioning its other advantage was reach (empirical evidence).

305

Damasio, A., Descartes’ Error: Emotion, Reason and the Human Brain, 1994, Revised Edition, Vintage Random House, London, 2006, (pp. 173-201) 306 Gruppe Nymphenburg Consult AG, Limbic®: Das innovative und einzigartige NeuromarketingInstrumentarium, [Limbic®: The innovative and unique neuromarketing instrument], [Online] Available from http://www.nymphenburg.de/limbic.html [Accessed 30th May 2012] 307 decode Marketingberatung GmbH, Publikationen, [Publications], [Online] Available from http://www.decode-online.de/publikationen/ [Accessed 30th May 2012]

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[Note by the author: Further to Project Implicit® (2011)308 IAT is used to eliminate biased results of the so-called “unwilling-unable distinction” measuring “implicit attitudes

and beliefs that people are either unwilling or unable to report.” The underlying assumption is the earlier the response, the lesser it is biased by cognition. Still, a study of Blanton et al (2009)309 reassessing exemplary IAT studies from McConnell and Leibold (2001)310 and Ziegert and Hanges (2005)311 demonstrates that IAT scores could not predict behaviour as “the results were not robust when the impact of rather reli-

ability, statistical specifications, and/or outliers were taken into account... .” (Blanton et al: (2009)312.]

Hence both experts agree with thesis 2 in so far neuroscientific insights play an indispensible role in assessing consumers’ emotions and motivations to buy. Still, concrete responses towards the marketing-mix in the daily business context rather derive from traditional research methods (including IAT). The experts’ willingness to keep up with latest neuroscientific findings and the statement “Basic [neuroscientific] research is

important and has already revealed interesting insights ... which are relevant and being considered in prevalent consumer research.” suggests the fact that neuroscience is considered as an important tool to constantly review established theories (the-

sis 3).

In sum, both experts clearly consider the inclusion of neuroscientific insights into CR as a precondition to maintaining competitive advantage. But with reference to the discussed limitations of consumer neuroscience there is a preference to rely on basic research findings provided by the academic field (research question).

308 IAT Corporation, Project Implicit® 2011, [Online] Available from https://implicit.harvard.edu/implicit/demo/background/index.jsp [Accessed 31st May 2012) 309 Blanton et al, Strong Claims and Weak Evidence: Reassessing the Predictive Validity of IAT, Journal of Applied Psychology, 2009, Volume 3, (pp. 567-582) 310 McConnell, A.R., Leibold, J.M., Relations among the Implicit Association Test, discriminatory behavior, and explicit measures of racial attitudes, Journal of Experimental Social Psychology, 2001, Vol. 37, (pp. 435-442) 311 Ziegert, J.C., Hanges, P.J. Employment discrimination: The role of implicit attitudes, motivation, and a climate of racial bias, Journal of Applied Psychology, 2005, Vol. 90, No. 3, (pp. 553-562) 312 Blanton et al, Strong Claims and Weak Evidence: Reassessing the Predictive Validity of IAT, Journal of Applied Psychology, 2009, Volume 3, (p. 567)

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5.4 Triangulation of Findings Contextualising qualitative and quantitative data – i.e. methodological triangulation –

“offers the prospect of enhanced confidence” (Bryman)313 in research findings, and to “fit together the insights provided by qualitative and quantitative research into a workable solution” (Johnson and Onwuegbuzie 2004: p. 16)314. Moreover, as Olsen (2004: p. 1)315 argues, it “is not aimed merely at validation but at deepening and wid-

ening one’s understanding.”

With reference to table 11 (Chapter 3.2) in table 18 the author illustrates the findings from different data sources to see whether they show consistency regarding thesis 1-

3 and the research question and whether triangulation provides enhanced understanding by pointing to additional aspects worth being considered.

313

Bryman, A., Triangulation, [Online] Available from http://www.mydelphi.eu/uploads/brand%20and%20person%20judjements.pdf [Accessed 30th May 2012] 314 Johnson, R.B., Onwuegbuzie, A.J., Mixed Methods Research: A Research Paradigm Whose Time Has Come, Educational Researcher, October 2004, Vol. 33, No. 7, (pp. 14-26) 315 Olsen, W., Triangulation in Social Research: Qualitative and Quantitative Methods Can Really Be Mixed, FINAL VERSION. Forthcoming as a Chapter in Developments in Sociology, ed. M Holborn, Causeway Press, Ormskirk, 2004 [Online] Available from http://research.apc.org/images/5/54/Triangulation.pdf [Accessed 30th May 2012]

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Table 18 Triangulation of Research Findings

Source: own design

As can be seen, table 18 1 shows broad consensus among the data sources concerning

thesis 1. More important, this convergence shows that there is agreement between the academic field and the managers acting in a given economical context. TriangulatTriangula ing the results concerning thesis 2 there is an interesting divergence between the results of literature review, online survey and semi-structured semi ctured expert interviews. While literature review and online survey corroborate thesis 2 both experts indicate that – with reference to the amelioration of marketing-mix marketing approaches – integrating basic neuroscientific research findings into consumer research seems to be sufficient to maintain competitive advantage. Both make a clear distinction between using basic neuroscientific insights and the use of neuroscientific brain imaging technologies by companies in daily research business. While this does not necessarily demonstrate

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complementarity, it has led the author to reflect her research question in so far she has not differentiated between the active use of neuroscientific brain imaging experiments by companies themselves and relying on basic neuroscientific research insights in a broader sense. For evaluating the study outcome it is necessary to examine on which assumption the online survey results base on. In doing this, there is evidence that survey participants also refer to the active use of neuroscientific brain experiments in a given economical context which is underpinned by the answers to Q4 and Q7 showing active, case-related replies concerning the use of consumer neuroscience. Looking at the data concerning thesis 3 there is corroboration between literature review and expert interview data. As online survey participants have not been explicitly asked, and survey data analysis does not allow implicit assumptions, triangulation does not include online survey data in this case. With reference to the research ques-

tion there is corroboration between literature review and expert interview data. With an approval of 35% (Q9: agree / tend to agree) and further 40% being not sure online survey data show partial corroboration.

Altogether, triangulation shows that there is great convergence between the data findings from all sources which leads to the assumption that theses 1-3 and the re-

search question as well have been verified.

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6. Limitations of the Research The author has executed all research steps as accurately as possible to comply with the highest scientific standards and to minimise common constraints compromising research findings. Still, the fact that the author is also the researcher imposes budget, capacity and resource constraints which cause limitations of the research having to be considered when evaluating the research findings:

Sampling: As the researcher uses non-probability sampling, the study findings cannot be generalised and thus have no statistical representativeness (external validity) for the target population (Saunders et al: 2009)316, (de Vaus: 2001)317. Additionally, due to capacity and resource constraints, the sample size is very small which entails that subgroups within the sample frames are not represented sufficiently (de Vaus: 2001)318 – i.e. figure 24 (Q12 of the online survey) shows that only a percentage of 5% of total respondents account for consultancies, compared to 30% belonging to the consumer market and 65% coming from agencies. The use of snowball sampling to enhance responses implies the risk of participation by respondents which do not exactly fit into the selected sample frames (see Chapter 3.4.1.) which could affect reliability.

Data collection: To avoid data collection errors in the sense Bryman and Bell (2007)319 and Saunders et al (2009)320 define it, utmost care was taken not to undermine reliability and validity with regard to the preparation and execution of quantitative and qualitative research (see also Chapter 3.3.1, 3.3.2 and 3.4.2). Although there is occurrence of non-response and item non-response the author is of the opinion that this does not lead to biased results in so far they are not evaluated as being systematic (de Vaus: 2001)321.

316

Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009 (p. 239) de Vaus, D., Research Design in Social Research, SAGE Publications, London, 2001,( p. 90) 318 Ibid, ( p. 143) 319 Bryman, A., Bell, E., business research methods, 2nd Edition, Oxford University Press, New York, 2007, (p. 204) 320 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009, (p. 362) 321 de Vaus, D., Research Design in Social Research, SAGE Publications, London, 2001,( pp. 147-148) 317

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Data processing: Using EFS Survey by QuestBack (2012)322 implies the automatic coding of answers and thus rules out individual coding errors. Online survey data have been exported into Microsoft Excel used for descriptive statistics – i.e. summarising the patterns of the sample – being cross-checked before generating respective charts.

In order to ensure internal validity the author has triangulated the findings from secondary and primary data sources. The results from triangulation lead to the conclusion that findings “can be attributed to the interventions rather than flaws of ... research

design.” (Saunders et al: 2009)323

322 QuestBack AG, EFS Survey 2012, [Online] Available from http://www.questback.de/loesungen/marktforschung/online-befragung.html [Accessed 15th March 2012] 323 Saunders, M., Lewis, P., Thornhill, A., Research Methods for Business Students, 5th Edition, Pearson Education, Harlow, UK, 2009, (p. 143)

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7. Discussion and Conclusion The research has started with the hypothesis without including neuroscientific insights

into marketing and consumer research, companies in the consumer market will lose competitive advantage. By investigating the three central theses and the resulting research question by means of intense literature review, an online survey and semistructured expert interviews – the research project has examined that the hypothesis is substantial.

We have learned from the academic perspective consumer neuroscience offers valuable approaches to cope with the ‘inaccessible subconscious’ of consumers’ brains. Of course, traditional consumer research has many ways of investigating what the consumer wants: panel data, focus group findings, interviews, etc., but scientific authors are quite unanimous that especially neuroscience delivers the necessary consumer insight to enhance competitive advantage. These neuroscientific insights – especially focussing on emotions contributing subconsciously to consumer decision-making – are also appreciated by online participants and interviewees as well (thesis 1).

That scholars are not judging from an ivory tower but with justification is also proved by the exorbitant budget which is spent on marketing and advertising in the consumer market, and which is still resulting in high flop rates and in the decline of advertising elasticity. In line with this, online survey data demonstrate that the demand of managers in daily research for new perspectives resulting from neuroscience has been recognised, and they further prove that the integration of consumer neuroscience into consumer research has well advanced. Interestingly, although being used actively in consumer research, neuroscientific insights are not undoubtedly recognised as a means of maintaining competitive advantage by all online survey participants. This is astonishing and could be an interesting starting point for further investigation as the use of consumer neuroscience in a daily business context is indeed appreciated by 100% of the online participants (Q11, figure 22) but only 35% of them affirm it is a means of maintaining competitive advantage in the sense Porter (1985)324 defines it, another 40% of them being not sure (Q9, figure 20). Besides, the interviewees explicitly and unambiguously consider neuroscientific insights as a precondition for maintaining competitive advantage in consumer markets. However, they prefer to predominantly rely on traditional CR methods being enhanced by basic neuroscientific 324 Porter, M., E., Competitive Advantage, (1985), First Free Press Export Edition, Free Press, New York, 2004 (p. 3)

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research findings (research question).

The interviewee’s clear distinction between using basic neuroscientific research and the use of neuroscientific brain imaging studies in a daily business context enriches the study outcome in so far it is interesting to question whether online survey data referring to competitive advantage (Q9, figure 20) would have delivered a more unanimous result if this clear distinction had been made within the questionnaire. As stated, online participants have not unambiguously supported that the value consumer neuroscience provides exceeds the investment it requires – hence generates competitive advantage as Porter defines it. Here, costs could play an essential role for the varying results as they are seen as a crucial issue limiting the use of neuroscientific brain imaging technologies in a daily business context by 80% of the survey participants (Q8, figure 19). If that was the reason it would be useful to further pursue co-operations between universities and companies to generate economic efficiency – as already practiced in business (Lee et al: 2006)325.

Also, it is astonishing to hear both experts saying concrete responses to the marketing-mix are predominantly the result of traditional CR methods. Given the fact that in 2010, 15% of ads in the US used celebrity endorsement – equalling a total spending of approximately US$50 billion – and bearing in mind their doubtful success (see Chapter 2.4, pp. 47-49), wouldn’t it make sense to test ‘celebrity effects’ with brain imaging experiments circumnavigating cognitive biases instead of only relying on traditional CR methods enhanced by basic neuroscientific findings before rolling out huge and expensive ad campaigns? Especially as neuroscientists have demonstrated several reasons accounting for biases resulting from traditional CR methods (i.e. consumers’ statements within focus groups and interviews) – ranking from the impossibility to access one’s subconscious to consumers’ wrong introspection concerning their behaviour (see Chapter 2.2.1). Hence biases cannot be simply excluded by carrying out research via online panels and IATs as suggested by one interviewee. Might be that biases through ‘social desirability’ thus can be reduced but, as extensively discussed in the literature review, biases are too multi factorial to be eliminated by simply replacing face-to-face interviews / focus groups by online panel procedures. Even the IAT, which shall serve as a method to circumnavigate cognitive biases, as mentioned by

325 Lee, N., Broderick, A., J., Chamberlain, L, What is ‘neuromarketing’? A discussion and agenda for future research, International Journal of Psychology, 2007, No. 63, (p. 200)

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one expert, is being considered to lack reliability and validity (Blanton et al: 2009)326. Hence, although IATs (used in online panels) can guarantee reach, and therewith the required empirical evidence, results are rather questionable. Still, taking basic neuroscientific knowledge into consideration when approaching the consumer with the marketing-mix (leaving companies’ case-related neuroscientific experiments aside), is considered as a crucial precondition to maintaining competitive advantage by both experts. In this context one expert only questions whether this knowledge had to be generated by companies themselves. Online participants however clearly appreciate the use of neuroscientific brain imaging experiments – especially when it comes to marketing-mix related aspects such as emotional branding, advertising and product development (thesis 2).

In addition, as studies have demonstrated, there is continuous progress in achieving new knowledge of consumer decision-making resulting from consumer neuroscience questioning long believed theoretical constructs (i.e. relevant-set model). This does not only support the necessity for companies in the consumer market to integrate recent basic neuroscientific findings into their research repertoire – as affirmed by both experts – it also demonstrates, that long believed theoretical constructs need to be challenged continuously. To the present knowledge these necessary insights on consumer behaviour can be delivered by consumer neuroscience (thesis 3).

All in all, neuroscience indeed has contributed to a new understanding of the human brain and thus delivers valuable insights on consumers’ mental states in a socioeconomical context. Hence its contribution to achieving valuable knowledge regarding decision-making processes and consumer buying behaviour cannot be denied. The research shows that the consumer industry is adopting the instruments provided by neuroscience and that the theses 1-3 are being verified from academic and managerial viewpoint. The deriving hypothesis and the research question have been confirmed by scholars and experts as well. However, with a lot of general positive credits the economical benefit in day to day research still remains somewhat unclear to marketing professionals.

326 Blanton et al, Strong Claims and Weak Evidence: Reassessing the Predictive Validity of IAT, Journal of Applied Psychology, 2009, Volume 3, (pp. 567-582)

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Although the research does not claim to be representative it helps to shed light on the discussion that consumer neuroscience can contribute to competitive advantage in the interplay between the challenging market situation, the academic field, and the managers acting in the consumer market in a daily business context. Hence it pictures the prevalent situation it can serve as a starting point for further investigations how to ameliorate the contribution of consumer neuroscience to maintaining competitive advantage in the challenging environment of the consumer market.

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8. Recommendations As repeatedly outlined the author is rather a pragmatist preferring practical solutions in order to cope with the real-world scenarios given in a prevalent economical context. This implies being informed about the relevant implications which are necessary to know for decision-making allowing justified arguments for further procedures. Hence contextualising the relevant outcomes of the different data sources of the research project (secondary and primary data) the author recommends to take advantage of neuroscientific insights in consumer market research’s day-to-day business by actively dealing with the constraints consumer neuroscience is still facing. Digging deeper into the limitations and their implications demonstrates that operational solutions to solve these issues are already at hand:

Costs: As one expert admits 40% of turnover in his company result from product innovations, and keeping in mind high flop rates and shrinking ad elasticity, it is surprising that costs for neuroscientific brain imaging technologies are considered to being that much an issue. Especially in light of the fact that studies not necessarily had to be executed by companies themselves, but also by universities being engaged on occasion and having the knowledge and necessary equipment at hand. Leaving apart whether other limitations also have an influence, for a start the author thinks cooperation with universities and clear case-related cost-benefit-calculations could help companies to identify whether investments in neuroscientific brain imaging studies can be considered as rewarding in the respective cases.

Ethics: The outcry within media insinuating Orwellian scenarios blaming neuroscientific research to open the door for consumer manipulation and political propaganda by providing the key to a so-called ‘buy-button’ within our brains (Blakeslee: 2004)327 entails that companies fear damage to their image when using neuroscientific brain imaging technologies – as also indicated by one of the interviewees. Apart from the fact that literature review has revealed that decision-making is by far too complex to being the result of only one spot within the consumer’s brain, it is suggested that companies, actively practicing neuroscientific research by means of brain imaging studies, should transparently communicate their aspirations and investigations so that

327 Blakeslee, S., If Your Brain Has a ‘Buy Button’, What Pushes It?, The New York Times, October 19, 2004, [Online] Available from http://www.nytimes.com/2004/10/19/science/19neuro.html?_r=2&position=&pagewanted=print&position [Accessed 5th February 2012]

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consumers and public get a more differentiated view of the application of consumer neuroscience.

Technological restrictions: In order to cope with the challenging experimental settings and the limitations of the respective brain imaging technologies for certain studies it is recommended to withstand the ‘seductive appeal’ of neuromarketing and to only assess neuroscientific insights when the given academic context is sound and proof, and when experiments are said to promise additional insight which traditional consumer research methods cannot not deliver. It is further recommended to rely on latest academic findings provided by universities instead of approaching neuromarketing agencies which – as also indicated by one expert – sometimes rather rely on questionable research approaches.

In a broader sense the author recommends a close and inter-disciplinary communication between academic scientists and the researchers employed in companies in the consumer market to ensure that constant knowledge exchange takes place and that up-to-date scientific insights are being transferred into daily business. Since marketing is always ready to adapt new trends – i.e. social media – it would be worthwhile if consumer researchers stuck to the topic and dealt with insights on consumer neuroscience with the necessary seriousness and sustainability the relatively new science deserves. Moreover, it is suggested to further proceed with the integration of the different academic disciplines contributing to consumer research and that this interdisciplinary cooperation is practiced in a “non-judgemental spirit” (Lee et al 2007: p. 203)328 to eventually profit from synergies.

These are rather operational recommendations related to companies’ consumer research and marketing approach in consumer markets including the interchange with academic scientists. With reference to the study itself the author thinks the findings provide an interesting snapshot illustrating the prevalent situation within the academic field and the management approach towards consumer neuroscience in consumer markets. Although the author emphasises the results are not considered to being representative, the triangulation of its findings still has demonstrated consistency between secondary and primary data.

328

Lee et al, What is ‘neuromarketing’? A discussion and agenda for future research, International Journal of Psychology 2007, No. 63, (pp. 199-204)

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Hence the author recommends taking the findings as a valuable starting point for further academic investigation – i.e.:

a) investigating whether issues of empirical evidence, as mentioned by one expert, really have to be taken as a serious concern for companies in the consumer market to refrain from neuroscientific brain imaging studies,

b) if, as outlined by the interviewees, integrating basic neuroscientific research findings into consumer research is sufficient for companies in the consumer market to profit from the insights consumer neuroscience can deliver, – especially with regard to marketing-mix components, and

c) whether IATs really can be considered as a means of preventing biases resulting from wrong consumer introspection and/or biases through ‘social desirability’ and thus can replace neuroscientific brain imaging studies, as suggested by one interviewee.

All in all, latest insights on brain functioning have already contributed to a new understanding of human decision-making processes. But as neuroscience is still in progress and might discover completely new insights within the next years, academic scientists, and companies in the consumer market making use of these insights, have the responsibility to constantly challenge the actual outcomes of research.

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List of Appendices

App. I

Introductory Email Questionnaire

App. II

Bilingual Introduction / Start Questionnaire

App. III

Email Reminder Questionnaire

App. IV

Design Online Questionnaire (Screenshots)

App. V

Consent Form Semi-Structured Expert Interviews

App. VI

Guiding Questions Semi-Structured Expert Interviews

App. VII

Transcription Semi-Structured Expert Interview 1, dated 23rd May 2012

App. VIII

Transcription Semi-Structured Expert Interview 2, dated 30th May 2012

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Maintainting Competitive Advantage in Consumer Markets by Using Neuroscience in Consumer Research  

The research project elaborates how neuroscientific insights can add value to consumer research and whether it becomes a precondition to mak...