DECLARATION

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

 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
 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
WITH RESPECT TO 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 6
2.2 Research Method……………………………………………..……. Page 8
2.3 Result of the Analysis of Case Study for Retail Store……………. Page 10
2.4 Conclusion of the Case Study for Application Of
Neuromarketing for Nokia…………………………………...……. Page 12
2.5 Learning for Application of Neuromarketing In Retail
And Promotion……………………………………………………… Page 12

3. Case Study: 3 APPLICATION OF NEUROMARKETING FOR BRAND PROMOTION-

“MCDONALD’S”

3.1 Studying and Triggering the Subconscious (Scent Marketin…… Page 14

3.2 Color Neuromarketing ………………………………………..…... Page 15
3.3 Limited Edition …………………………………………….....…… Page 16
3.4 Conclusion…………………………………………………………... Page 17

Reference……………………………………………………………………….. Page 18
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.
In order to explain this, three detailed case studies have been presented. 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 with respect to Brand-NOKIA) while third case study is
the application of Neuroscience for the brand promotion of McDonalds.
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 a number of automatic processes, subconscious and
inaccessible to the carrier.

Introduction to Neuromarketing
The term of 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 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 in 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
 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 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‖.
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 calendars. The
key question for us was how 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.
Performance was measured by looking at two metrics:
first, by how long people watched, and second, by the percentage of people who actually completed the
ad.
Building an ongoing storytelling experience from the anchor video ad
But the team didn‘t stop there. In fact, 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 were 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 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 sequence of advertisements.

Source: YouTube Brand Lift campaign data for 20th Century Fox U.K.'s The Greatest Showman
campaign, Jan. 2018.
According to Green, the proven effectiveness of this experiment has changed their approach to online
video in a movie marketing plan. Simply uploading a made-for-television trailer online will no longer
suffice. Green says, ―Moving forward, a core component of our strategy will be testing and learning with
different creative and ad length combinations online.‖
 CASE STUDY: 2
TO STUDY THE APPLICATION OF NEUROMARKETING IN
RETAIL STORES (UNDERSTANDING CUSTOMER‘S
SUBCONSCIOUS RESPONSE IN MARKETING WITH RESPECT TO
BRAND-―NOKIA‖)

2.1) Introduction of Case 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 implies that laboratories can build
virtual 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 behaviour 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.
The big question is whether Neuromarketing can push a ‗buy button‘ in Customer‘s brain?

2.1.2) The Consultative Selling Process:

Neuromarketing studies test subjects‘ reactions to certain stimuli, which are then recorded with the aim of
revealing consumer preferences.

In Technology driven products, consultative selling pays more weight as 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 customer feels satisfied with the
whole purchase experience.
In addition, marketing assets – including the store environment – are often converted into a consultative
selling environment to support the sales process. Typical marketing assets include an optimized product
mix, branded shopping bags, and physical store components. Furthermore, displays, banners, and product
information sheets support the customers‘ decision-making process. These assets play an important role
during consultative selling, because customers are led through the path of discovery using light, motion,
and visuals to strengthen the positive experience. Many high-technology companies establish flagship
stores with a distinctive store location, decor, or merchandise mix to promote and attract customers.
The marketing material used in this study consisted of video clips and still pictures derived from Nokia‘s
flagship retail stores (Figure 1).

Figure 1:Flagship retail store of the Nokia.

The five diverse phases of consultative selling are illustrated in Figure 2 and are described below:

Phase 1: Create a connection to the customer. The purpose of the first phase is to acknowledge the
presence of the customer and make them feel welcome.
Phase 2: Understand customer needs. The second phase emphasizes listening to the customer and
understanding their needs, experiences, and feedback to support closing the sale
Phase 3: Address customer needs. This phase includes determining the customer‘s problem, identifying
a suitable solution, and proposing a solution alternative. Although the customer may have learned of the
providers‘ product range previously, the customer often needs professional help to identify the most
suitable solution for the problem, especially in the high-tech industries. An in-store demonstration of the
solution should help clarify the customer‘s needs. As the retail salesperson performs a product
demonstration, the marketing activities are concentrated on lowering the customer‘s purchase barrier for a
particular product that is identified as a potential solution to the customer‘s problem
Phase 4: Close the sale. The goal of the fourth phase is to close the deal. Meeting the customer's needs
and adding value to their daily life increases the likelihood of a repeat purchase and customer loyalty. ed
value in the previous phases of the selling process.
Phase 5: Establish a sustainable customer relationship. In the fifth phase, sellers acknowledge that the
process is about building a business relationship that may later result in a repurchase

Figure 2. The five phases of consultative selling

2.2) Research Method:

Although there are several techniques for scanning the brain, the two most important for Neuromarketing
are electroencephalography (EEG) and functional magnetic resonance imaging (fMRI).
Whilst EEG is the recording of electrical activity outside of the brain using scale electrodes, fMRI
measures changes in blood flow and oxygen levels according to mental activity.
They used fMRI to record the brain activation of 16 test subjects at the Advanced Magnetic Imaging
(AMI) Center at Aalto University in Finland (Figure 3).
 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‘ 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 a 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 .
 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 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 each 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 5: Brain activation of the 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 at 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 shown during the
process likely triggers an individual‘s memories.
 Figure 7. Hippocampus activation

2.4) Conclusion of the case study for application of Neuromarketing for NOKIA:
I. 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.
II. The level of satisfaction at each moment of the shopping experience is more important than the
emphasis on products.
III. Perceived risk is an important factor affecting customers' decision-making processes.
IV. 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 into the retail store and ending only after closing the deal and
ensuring the initiation of a longstanding customer relationship.

2.5) Learning’s 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.
 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 which 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):
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 a business. McDonald‘s has been using leading
neuroscience firms such as Neurosense to enhance its marketing. The neuroscience applications
neurosense offers 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.
 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 the 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 smell like its signature Quarter Pounders when burned in unison, and a
lot of people have been talking about it. Apparently, 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, McDonalds 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 in relation to the fast food industry, red triggers
stimulation, appetite, hunger, it attracts attention.

Figure 2: Advertisements showing Neuromarketing

Yellow triggers the 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
the 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 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 are 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 every 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 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.
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