Applications

of
Neuromarketing
Submitted by:
Guided by:
Ayushi Srivastava Dr. Sanjeev S
Malage
Ashish Singh

Shruti Arora

|Page
 DECALARATION

We hereby declare that this project "Application of Neuromarketing" submitted to National

Institute of Fashion Technology, Bengaluru in partial fulfillment for the award of Master of
Fashion Management is the original work carried out by us under the guidance and supervision
of Dr. Sanjeev S. Malage, Department of Fashion Management Studies and NIFT Bengaluru.

We, further declare that this project or part thereof has not been submitted in any form for any
other degree or diploma. All information included from other sources has been duly
acknowledged.

AAYUSHI SRIVASTAVA

ASHISH SINGH

SHRUTI ARORA

Date: 21st April 2020

Place: NIFT Bengaluru

|Page
 Acknowledgment

We would like to take this opportunity to express our sincere gratitude to Dr. Sanjeev S. Malage
for this opportunity to work on this project and guiding us through the entire process.

Thank You.

Aayushi Srivastava

Ashish Singh

Shruti Arora

|Page
 TABLE OF CONTENT

Abstract…………………………………………………………………………. Page 1

Introduction to Neuromarketing…………………………………………….... Page 1

1. Case Study 1: APPLICATION OF NEUROMARKETING IN DIGITAL MEDIA-20

1.1 Introduction……………………………………………………….... Page 2

1.1.1 Aim of the Case Study……………….…………………… Page 2

1.1.2 Analysis…………………………………..……………….. Page 2

1.1.3 Finding of the Neuromarketing Experiment….………... Page 2

1.1.4 Benefits…………………………………………..………... Page 2

1.2 Recent Experiment of 20th Century Fox Film Studio.………...… Page 2

1.2.1 Introduction………………………………………………. Page 2

1.2.2 Aim of the Experiment…………………………………… Page 3

1.2.3 Detailed Analysis ………………………………………… Page 3

1.2.4 Testing Into The Top Performing Creative……...………Page 3

2. Case Study: 2 TO STUDY THE APPLICATION OF NEUROMARKETING IN

RETAIL STORES (UNDERSTANDING CUSTOMER'S SUBCONSCIOUS RESPONSE
IN MARKETING CONCERNING BRAND-"NOKIA")

2.1 Introduction of the Case Study…………………………….……… Page 6

2.1.1 Aim of the Study…………………………………...……... Page 6

2.1.2 The Consultative Selling Process………………………... Page 7

2.2 Research Method…………………………………………...………. Page 7

2.3 Result of the Analysis of Case Study for Retail Store……………. Page 9

2.4 Conclusion of the Case Study for Application Of

Neuromarketing for Nokia………………………………………….…. Page 10

|Page
 2.5 Learning for Application of Neuromarketing In Retail
And Promotion……………………………………………………,,…... Page 11

3. Case Study: 3 APPLICATION OF NEUROMARKETING FOR BRAND

PROMOTION-"MCDONALD'S"

3.1 Studying and Triggering the Subconscious (Scent Marketing)…. Page 12

3.2 Color Neuromarketing …………………………………………….. Page 13

3.3 Limited Edition ……………………………………………...…...… Page 14

3.4 Conclusion…………………………………………………………... Page 14

Reference………………………………………………………………………... Page 15

|Page
 ABSTRACT

This assignment presents Neuromarketing as a way to detect brain activation during customer
engagement. Neuromarketing is a field of marketing research that studies consumers'
sensorimotor, cognitive, and affective response to marketing stimuli.

To explain this, three detailed case studies have been presented. The first case study explains the
Application of Neuromarketing in Digital Media by taking the example of Fox Filmed
Entertainment Group. Second case study talks about the application of Neuromarketing in Retail
stores (Understanding Customer's subconscious response in Marketing for Brand-NOKIA) while
third case study is the application of Neuroscience for the brand promotion of McDonald's.

The report has been carefully compiled by studying in-depth the material provided in the online
class group in the unfortunate COVID-19 situation. Contrary to the concept of traditional
economics, it is currently understood that the brain conducts several automatic processes,
subconscious and inaccessible to the carrier.

INTRODUCTION TO NEUROMARKETING

The term Neuromarketing has begun to shape in the late 90s of the last century by a Harvard
professor "Jerry Zaltman". He pointed out the possibility of using modern technology to imaging
the brain in Marketing and consumer behavior. It is a discipline that combines knowledge from
different disciplines such as Neurology, psychology, marketing, and sociology.

"Neuromarketing is knowledge about the information processing and decisions made by humans
and investigate how businesses should communicate with the brain in detail"

Neuromarketing finds its application in various areas such as innovation, modification of the
product, pricing strategy, creating of communication mix and others

1|Page
 CASE STUDY: 1
APPLICATION OF NEUROMARKETING IN DIGITAL MEDIA-
20TH CENTURY FOX
1.1) INTRODUCTION:
1.1.1) Aim of the case study: To test the
response rate to ads inserted into a
videogame
1.1.2) Analysis:
In 2007, 20th Century Fox™ teamed with
Neuromarketing firm, Neuroco, to use EEGs
and eye-tracking to test the response rate to
ads inserted into a videogame. Subjects went
walking in a virtual city and were exposed to
billboards for various films.
Researchers were able to control the content
and the placement of ads— billboards, sides
of busses, etc.—along with the illumination
of ads, as a means to determine which ads
would be most effective in real life. This
Neuromarketing research was able to
illustrate to the Fox marketing team that a
saturation campaign in real life would lead
to diminishing returns.
1.1.3) Findings of the Neuromarketing
experiment: Melissa Mullen, director of
research for Fox's international theatrical
division said, "There is no way we could
have gotten this kind of actionable
information from traditional research
approaches."
1.1.4) Benefits:
Fox now uses Neuromarketing regularly to
test the effectiveness of its movie trailers as
well as ad placements.
1.2) RECENT EXPERIMENT OF 20TH
CENTURY FOX FILM STUDIO
1.2.1) Introduction:
Fox Filmed Entertainment Group ("Fox FE"
or "we")which includes Twentieth Century
Fox Film Corporation, Fox Searchlight
Pictures, Inc. and Twentieth Century Fox
Home Entertainment LLC works with online
advertising companies and other similar
2|Page
entities that help deliver advertisements
tailored to customer’s interests.
These entities place cookies or other
tracking technologies on their computers to
collect information about their online
activities (for example, the sites and pages
they visit) in order to help limit the number
of times they see the same ad and to ensure
the ads they see are more relevant to their
interests.
1.2.2) Aim of the experiment: To make the
most of the channel with a robust mix of
video creative.
1.2.3) Detailed Analysis:
The team at 20th Century Fox in the U.K.
bucked the traditional trend, experimenting
with online video assets beyond the 30-
second movie trailer for the release of the
feature film, “The Greatest Showman”.  calendars. The key question for us was how
Since digital video ads provide an
opportunity to re-engage viewers over time,
they aimed to make the most of the channel
with a robust mix of video creative and
experimenting their way into what worked
well.
The innovative approach paid off in spades
and changed the way they’ll plan their
online video strategy for film launches
moving forward.
The campaign delivered awareness and
consideration uplifts that were 5X stronger
than those typically seen in the industry,
plus powered the film to set a box office
record.
These lessons—pairing experimentation
with ad sequencing—can be valuable to any
brand that’s looking to experiment with
online video beyond a single piece of
creative like a TV commercial.
1.2.4) Testing into the top-performing
creative:
Fox’s marketing goals were to drive
consideration and box office impact during
the month of December. As Chris Green, the
studio’s U.K. marketing director explained,
“Holiday time is particularly noisy. In
addition to competition from other movies,
you’re also contending with people’s social
to cut through and get noticed.” Thus, the
need for an out-of-the-box approach that did
more than rely on the TV commercial.
Rather than guess at what users would want
to see in a 30-second digital video ad Fox
ran three different versions of trailer creative
as skippable ads to see which version people
chose to watch most. The performance was
measured by looking at two metrics:
3|Page
first, by how long people watched, and
second, by the percentage of people who
completed the ad.
Building an ongoing storytelling experience
from the anchor video ad
But the team didn't stop there. That was only
the starting point in building out a sequence
of video ads to serve viewers over time.
Once the top-performing 30-second ad
emerged, they deemed it to be the video
campaign's "anchor," the initial ad people
would see.
From there, the team built a deliberate, data-
driven sequence of ads to serve people at a
later time based on how they engaged with
the anchor ad.
The ad sequence created from the anchor ad-
Figure 1: The ad sequence created from the
anchor ad
"We wanted to bring people on a journey
and serve them the right message based on
their stage in that journey," explains Green.
So each viewer's experience was based on
whether they chose to watch the anchor ad
or skip it.
Users who skipped the anchor ad were later
served a shorter 20-second edit, which
focused on the romance between characters
played by Zac Efron and Zendaya, a key
subplot in the film. And those who chose to
watch the anchor ad was served two
additional ads over time: a long-form behind
the scenes video, featuring Efron and Hugh
Jackman during rigorous rehearsals,
followed by a snappy 10-second ad
reminding viewers to go see the movie in
theaters.
The results speak for themselves.
Compared to the anchor ad alone, the
sequence of ads led to a 149% uplift in
consideration, a 33% uplift in view-through
rate, and a 157% uplift in organic title
searches for "The Greatest Showman."
Compared to the anchor ad alone, the
sequence of ads led to:
Figure 2: Analysis of the sequence of
advertisements.
4|Page
Source: YouTube Brand Lift campaign data marketing plan. Simply uploading a made-
for 20th Century Fox U.K.'s The Greatest for-television trailer online will no longer
Showman campaign, Jan. 2018. suffice. Green says, "Moving forward, a
core component of our strategy will be
According to Green, the proven testing and learning with different creative
effectiveness of this experiment has changed and ad length combinations online."
its approach to online video in a movie

5|Page
 STUDY: 2
STUDY THE APPLICATION OF NEUROMARKETING IN
RETAIL STORES (UNDERSTANDING CUSTOMER'S
SUBCONSCIOUS RESPONSE IN MARKETING concerning
BRAND-"NOKIA")

2.1) INTRODUCTION OF CASE implies that laboratories can build virtual

STUDY
The study was conducted by a Marketing
Professor NICK LEE, of Aston University.
They established a Virtual Customer
Journey model based on the consultative
selling process to study customer
engagement by using brain scans.
Consultative selling suggests that the
salesperson's behavior and in-store
marketing assets manage a customer's
shopping experience and that the customer
gets engaged step by step.
A total of 16 test subjects were shown video
clips and still pictures from a consultative
sales process at Nokia's flagship stores, and
their brain activity was scanned. The study
environments that resemble real shopping
environments where customers can
participate in the buying process and
respond to events displayed on the screen,
and that neuroimaging is useful in providing
valuable information on customer behavior
that is not achievable otherwise.
2.1.1) Aim of the study:
Executives love the idea of using brain
scans. As brain imaging and neuroscience
develop, Neuromarketing companies will be
able to pull out more sophisticated data
about what makes people want to buy or
avoid certain items.

6|Page
The big question is whether Neuromarketing
can push a 'buy button' in the Customer's
brain?
2.1.2) The Consultative Selling Process:
The marketing material used in this study
consisted of video clips and still pictures
derived from Nokia's flagship retail stores
(Figure 1).

Neuromarketing studies test subjects'

reactions to certain stimuli, which are then
recorded to reveal consumer preferences.

In Technology-driven products, consultative

selling pays more weight as the customer
may not know the essential features and
configurations of the product like NOKIA in
this case. The sales professional is a valued
advisor and problem-solver rather than
persuader or someone merely promoting a
particular product During the process, the
salesperson needs to ensure that the Figure 1:Flagship retail store of the Nokia.
customer feels satisfied with the whole
The five diverse phases of consultative
purchase experience.
selling are illustrated in Figure 2 and are
Also, marketing assets – including the store described below:
environment – are often converted into a
Phase 1: Create a connection to the
consultative selling environment to support
customer. The purpose of the first phase is
the sales process. Typical marketing assets
to acknowledge the presence of the customer
include an optimized product mix, branded
and make them feel welcome.
shopping bags, and physical store
components. Furthermore, displays, banners, Phase 2: Understand customer needs. The
and product information sheets support the second phase emphasizes listening to the
customers' decision-making process. These customer and understanding their needs,
assets play an important role during experiences, and feedback to support closing
consultative selling because customers are the sale
led through the path of discovery using light,
motion, and visuals to strengthen the Phase 3: Address customer needs. This
positive experience. Many high-technology phase includes determining the customer's
companies establish flagship stores with a problem, identifying a suitable solution, and
distinctive store location, decor, or proposing a solution alternative. Although
merchandise mix to promote and attract the customer may have learned of the
customers. providers' product range previously, the
customer often needs professional help to

7|Page
identify the most suitable solution for the Figure 2. The five phases of consultative
problem, especially in the high-tech selling
industries. An in-store demonstration of the
solution should help clarify the customer's 2.2) RESEARCH METHOD:
needs. As the retail salesperson performs a
Although there are several techniques for
product demonstration, the marketing
scanning the brain, the two most important
activities are concentrated on lowering the
for Neuromarketing are
customer's purchase barrier for a particular
electroencephalography (EEG) and
product that is identified as a potential
functional magnetic resonance imaging
solution to the customer's problem
(fMRI).
Phase 4: Close the sale. The goal of the
Whilst EEG is the recording of electrical
fourth phase is to close the deal. Meeting the
activity outside of the brain using scale
customer's needs and adding value to their
electrodes, fMRI measures changes in blood
daily life increases the likelihood of repeat
flow and oxygen levels according to mental
purchase and customer loyalty. ed value in
activity.
the previous phases of the selling process.
They used fMRI to record the brain
Phase 5: Establish a sustainable customer
activation of 16 test subjects at the
relationship. In the fifth phase, sellers
Advanced Magnetic Imaging (AMI) Center
acknowledge that the process is about
at Aalto University in Finland (Figure 3).
building a business relationship that may
later result in a repurchase.

Figure 3: A test subject being prepared for

fMRI at Aalto University's AMI Center

The video was presented first, and then a

customer was shown six still pictures
captured from the video. The test subjects'

8|Page
brains were scanned and brain activation
data were monitored while they viewed the
pictures. After each still picture, asking test
subjects about their intention to purchase the
product and measuring their responses
evaluated customer behavior.
FMRI data is based on the changes of the
BOLD-signal, which essentially measures
the ratio of oxyhemoglobin and
deoxyhemoglobin in the subject.
Each picture was shown for a duration that
covered representation of feasible actions
(3.6 seconds), valuation of each action (3.6
seconds), and action selection based on the
valuation (3.6 seconds) in concordance with
the framework for studying the neurobiology
of value-based decision making.
consultative selling phase. The results were
counted as mean brain activation of the
group.
2.3) RESULTS OF THE ANALYSIS OF
CASE STUDY FOR RETAIL STORE
Different components of the brain's
valuation circuits were active at each phase
of the Virtual Customer Journey.
First, dorsolateral prefrontal cortex (DLPFC)
activation was found at every five phases of
the consultative selling process. DLPFC is
an area in the primate brain that serves as the
highest cortical area responsible for motor
planning, organization, and regulation. It
plays an important role in the integration of
sensory and mnemonic information and the
regulation of intellectual function and
action, and it is involved in working
memory. Figure 5 shows the brain activation
of DLPFC (above left: sagittal view, above
right: coronal view, and below: axial view of
the brain).

Figure 4: Example of a phase in the scan

illustrating the use of video clips and still
pictures.

The subject analysis was used to test which

brain areas are active during a specific

9|Page
Figure 5: Brain activation of
dorsolateral prefrontal cortex (DLPFC)
Figure 6.Activation of the inferior frontal
gyrus (IFG)
Second, the inferior frontal gyrus (IFG) was
active during most phases of the consultative
selling process. Therefore, the IFG
activation in the trials shows test subjects
were not only seeing the people on the
screen but also associating themselves with
those people and mirroring their behavior
and feelings during the consultative selling
process.
Finally, hippocampus activation was found
in phases 1 and 2, as well as 4 and 5, during
the consultative selling process.
Hippocampus activation indicates that the
test subject's memory was active during the
process. The activation of the memory
system was expected because the
information is shown during the process
likely triggers an individual's memories.
the
Figure 7. Hippocampus activation
2.4) CONCLUSION OF THE CASE
STUDY FOR THE APPLICATION OF
NEUROMARKETING FOR NOKIA
1. Neuroimaging is a suitable method
for investigating consumer
perceptions in situations where
pleasure and displeasure can be
measured at each step of the
customer engagement. The level of
satisfaction at each moment of the
shopping experience is more
important than the emphasis on
products.
2. Perceived risk is an important factor
affecting customers' decision-making
processes.
3. Consultative selling is an effective
way to serve customers and their
needs, especially in high-technology
markets, and that it reflects a step-
by-step customer engagement
starting from the moment the
customer enters the retail store and
10 | P a g e
 ending only after closing the deal
and ensuring the initiation of a
longstanding customer relationship.
2.5) LEARNINGS FOR APPLICATION
OF NEUROMARKETING IN RETAIL
AND PROMOTION:
 The benefit of neuroimaging is that
even a relatively small group of test
subjects can provide reliable
information on customer reactions to
marketing stimuli.
 The information is especially useful
for companies building customer-
appealing stores and shopping
environments, as well as for planning
their sales processes and producing
marketing material such as
advertisements that support the
company's positive image and foster
sales.
 The findings and the method can be
used not only for assessing the
buying process but also for testing
new product and service concepts
and applications, especially in the
high-tech sector.
 The thought behind Neuromarketing
is that buying decisions aren't
necessarily rational decisions, rather
they are decisions made deep within
the brain and based on an amalgam
of thoughts and feelings.
 To sum up, neuromarketing cannot
push a "buy button" in the customer's
brain because there is no "buy
button" to push. However, activation
in the inferior frontal gyrus (IFG),
which is a part of the mirror neuron
system, suggests that test subjects
associate themselves with objects
(including people) seen on video
during the simulated customer
journey.
11 | P a g e
 CASE STUDY: 3
APPLICATION OF NEUROMARKETING FOR BRAND
PROMOTION-"MCDONALD'S"
More and more companies are turning to
neuromarketing—a controversial practice
that involves studying the human brain and
how a consumer's neural pathways might
respond to certain stimuli. It's based on the
idea that 90 percent of the choices we make
happen at a subconscious level. The goal is
to bypass our higher reasoning and even our
emotional judgment to sell more products.
An obvious case study in neuromarketing
comes from McDonald's. They developed a
perfume that was subtly diffused in
restaurants to increase brand association and
boost sales.
Application of Neurosciences for
Neuromarketing
3.1) STUDYING AND TRIGGERING
THE SUBCONSCIOUS (SCENT
MARKETING)
The smell is the strongest of our senses and
is linked to parts of the brain that evoke
memory and emotion (so say, scientists).
Likely because of this, the American
Marketing Association reports that an
attractive scent can entice customers to stay
up to 44% longer in business. McDonald's
has been using leading neuroscience firms
such as Neurosense to enhance its
marketing. The neuroscience applications
neurosense offers to include the ability to
interpret subconscious reactions that
consumers cannot or will not articulate, to
read brain responses to factors that
consumers are not consciously aware of, and
to pinpoint images, designs, tastes, etc. that
evoke positive or negative conscious or
subconscious responses. McDonald's also
uses the ad agency DDB, which employs a
variety of tools to probe consumer emotions
and has noted the importance of
neuromarketing.
12 | P a g e

Figure: 1 Smell as one of the strongest
senses.
In one of the articles, a woman states that:
When I get home from the gym, I often stop
at this burger restaurant. I love its smell and
toasted bread. And it's so nice inside." It is
so because the smell of fast food is
deliberately designed to produce an
emotional reaction in the body. McDonald's
launched a new line of candles recently that
smells like its signature Quarter Pounders
when burned in unison, and a lot of people
have been talking about it. A lot of people
have also been buying it, despite the $35
price tag. The product has already sold out
and is listed as "out of stock".
3.2) COLOR NEUROMARKETING
The language of color is communicated
quicker to the brain than words or shapes as
they work directly on our feelings and
emotions. It is interesting to study the
perception of colors in the consumer's brain
(color theory). Thus, red raises the heart rate
and invites action, hence brands such as
Coca Cola, McDonald's or Tele pizza
incorporate it into their logos. The blue
reminds of the sky and freedom, generating
a sense of well-being and reflection, hence
companies such as Facebook or Twitter use
it as the main color. The feelings, the mood
this combination of colors emits is perfect
for their target market. Looking at the
positive psychology qualities of red and
yellow concerning the fast food industry, red
triggers stimulation, appetite, hunger, it
attracts attention.
Figure 2: Advertisements showing
Neuromarketing
Yellow triggers feelings of happiness and
friendliness. When we combine red and
yellow it's about speed, quickness. In, eat
and out again. Yellow is also the most
visible color in daylight, which is why
McDonald's M can be seen from a far
distance. Similarly, the reason behind
McDonald's green and yellow signs, is that
Green elicits the feelings of nature, natural
and environmentally friendly. It's no longer
about rushing in for a quick bite to eat. One
can relax, get comfortable, linger over a
coffee.
3.3) LIMITED EDITION
Seasonal items are an important marketing
tool for the food industry. Limited releases
13 | P a g e
almost give consumers a Pavlovian
response.
Figure 3: Advertisement of McDonald's for
limited edition McRib
The fast-food company announced that the
barbecue sandwich will be available in over
10,000 restaurants but, the menu item will
only be around for a limited time. There is
some basic supply-and-demand economics
behind limited-time releases too: Scarcity
can build hype. "It's a way to create
excitement for the menu," said R.J. Hottovy,
a consumer strategist for Morningstar. "It's a
way to create excitement for the menu," said
R.J. Hottovy, a consumer strategist for
Morningstar. Items that might be popular for
a few months probably wouldn't generate
enough year-round demand.
When the McRib debuted in 1981, it was a
dud. McDonald's pulled it from its menu
four years later. Though it never achieved
nationwide success, there were parts of the
country where the McRib generated a solid
enough fan base to bring it back now and
then.
3.4) CONCLUSION
Similar to cognitions, emotions cannot be
observed directly. They can only be inferred
indirectly by tracking facial
electromyographic activity (fEMG),
analyzing facial expressions, monitoring
arousal using ECG, galvanic skin response
(GSR), respiration sensors, or self- reported
measures.
Human behavior and decision-making are
heavily affected by emotions – even in
subtle ways that one may not always
recognize. After making an emotionally-
fueled decision, one may tend to continue to
use the imperfect reasoning behind it, and "a
mild incidental emotion in decision-making
can live longer than the emotional
experience itself" as pointed out by Andrade
& Ariely (2009).
This assignment has made us learn that
Neuromarketing is here to stay—science
fiction is now a reality. Big brands, small
brands, and nonprofits should consider
exploring this tool sooner rather than later.
It's important to be ready to make the shift to
more science-based marketing.
14 | P a g e
Reference:
1. http://digitalads.org/how-youre-targeted/case-studies/mcdonalds-avatar
2. http://digitalmarketingtrends.in/neuromarketing-business-online-increase-revenue-e-
commerce/
3. https://www.indy100.com/article/mcdonalds-brand-signs-yellow-red-psychology-
calming-hungry-7944036
4. https://edition.cnn.com/2019/10/04/business/mcdonalds-mcribs-returns/index.html
5. https://core.ac.uk/download/pdf/45602365.pdf
6. https://www.20thcenturystudios.com/privacy-policy
7. https://timreview.ca/article/634
8. https://info.4imprint.com/wp-content/uploads/1P-07-0710-July-Blue-Paper-
Neuromarketing.pdf

15 | P a g e