Neuromarketing Basics
What is Neuromarketing?
It's the intersection of marketing and neuroscience/ involves studying consumers brain activity
What does eye tracking technology measure?
What are consumer's decision based on?
Emotions rather than logic
What are the 3 cognitive biases and subconcius processing mentioned?
Confirmation Biases, Anchoring and Impulsive Buy
Name 3 Cognitive Bias un Supply Chain Decision-making
Anchoring Bias, Availability Heuristic, Overconfidence Bias, Confirmation Bias, Loss Aversion and Sunk Cost Fallacy
Name 2 brain regions that affect consumer's decision-making
Prefrontal cortex, amygdala and Nucleus accumbens
Why are brain scanning tools impractical for many companies?
Because brain activity tools are difficult to interpret, a spike in brain activity doesn't necessarily mean an emotion or engagement.
What are the ethical concerns in neuromarketing?
It can be used to exploid vulnerabilities at a subconcius level
What is confirmation bias?
People tend to favor information that confirms what we believe
What is the Bullwhip Effect?
when small demand fluctuations at the consumer level cause exaggerated supply chain disruptions due to miscommunication and overordering
What are the main 2 tools that neuromarketers use?
Brain Scanning (fMRI and EEG) and Physiological tools (eye tracking, facial coding and biometrics)
What is the main advantage of neuromarketing over traditional marketing techniques?
Traditional marketing relies on self-reports that can be biased (surveys, interviews), while neuromarketing shows consumer preferences and emotional responses that are not expressed directly
What are the limitations of brain-scanning tools in marketing research?
Expensive, complex and difficult to interpret brain activity makes it impractical for many companies
What is anchoring?
It's a pricing straategy that states that the first piece of information presented sets an anchor in our mind.
Why do managers inflate orders during uncertain market conditions?
Fear of stockout, past experiences and loss aversion.