ICHEC Strategic Marketing Past Paper PDF 2024-2025

Strategic Marketing 2024-2025 Olivier Schunck [email protected] 21GE022 – Strategic Marketing - Module 4 1  https://app.wooclap.com/events/YOURMIND/0 21GE022 – Strategic Marketing - Module 4 2 TASK – What do you remember most from las...

Strategic Marketing 2024-2025 Olivier Schunck [email protected] 21GE022 – Strategic Marketing - Module 4 1  https://app.wooclap.com/events/YOURMIND/0 21GE022 – Strategic Marketing - Module 4 2 TASK – What do you remember most from last week’s session? (in a few words)” 21GE022 – Strategic Marketing - Module 4 3 TASK – What do you remember most from last week’s session? (in a few words)” 21GE022 – Strategic Marketing - Module 4 4  Course Outline Marketing’s A brief history of Marketing Brand & Brand identity, trust and 1 6 Journey and where it stands today Purpose purpose-driven marketing Strategic Basics of Marketing Strategy Responsible Marketing in times of crisis: 2 7 Marketing explained, step-by-step Marketing Sustainable and Ethical Customer Customers’ behavior & needs Digital & Marketing strategy in the 3 8 Centricity and distinctive experiences Social Digital Era Research & Customer intelligence driven Emerging AI, Gen AI & emerging tech- 4 9 Insights by data/AI & human insights technology led Marketing Reinvention Market & Competitive advantage to Agile Resilient & agile marketing 5 10 Competition stand out and innovate Marketing operating models 21GEO22A – Strategic Marketing - Module X 5  Today’s focus Marketing’s A brief history of Marketing Brand & Brand identity, trust and 1 6 Journey and where it stands today Purpose purpose-driven marketing Strategic Basics of Marketing Strategy Responsible Marketing in times of crisis: 2 7 Marketing explained, step-by-step Marketing Sustainable and Ethical Customer Customers’ behavior & needs Digital & Marketing strategy in the 3 8 Centricity and distinctive experiences Social Digital Era Research & Customer intelligence driven Emerging AI, Gen AI & emerging tech- 4 9 Insights by data/AI & human insights technology led Marketing Reinvention Market & Competitive advantage to Agile Resilient & agile marketing 5 10 Competition stand out and innovate Marketing operating models 21GEO22A – Strategic Marketing - Module X 6 TASK – Where is Marketing Research critical in the process ? Strategic Marketing process – In Summary Repsonse: Marketing research applies to all steps 1. Overall 2. Situation 3. Marketing 4. Integrated 5. Execution Ambition Analysis Strategy Mktg program & Evaluation Set general Identify Make strategic Develop the Put strategy direction opportunities choices components into action Purpose External analysis Strategic options Marketing Mix Pilot Vision/Mission Internal analysis Segment, Target, Capability gaps Implementation Branding Position Plan / Budgets Organization Identify value Goals & Objectives potential Evaluation & Choice Objectives/KPIs Monitor/Evaluate 21GE022 – Strategic Marketing - Module 2b 85 21GE022 – Strategic Marketing - Module 4 7 TASK – New telecom operator: gaining customer insights 1. Make groups of 2-3 students 2. Assign one person as “Marketing” responsible, the others play the role of potential customers. 3. The “Marketing” person asks 2-3 research questions to the others to gain customer insights for the new telecom services offer to be launched. 21GE022 – Strategic Marketing - Module 4 8 TASK – Enter one question asked or expected Marketing person: In wooclap.com, enter one of your question asked. Other members: In wooclap.com, enter one question you would have expected to be asked 21GE022 – Strategic Marketing - Module 4 9 TASK – Which main ‘question words’ did you use? All: In wooclap.com, select the question words you used / would use ? 21GE022 – Strategic Marketing - Module 4 10 Marketing Research basics 21GE022 – Strategic Marketing - Module 4 Main objectives of Marketing Research Problem “to understand” identification “to anticipate” Marketing Research Problem “to test, to measure” solving “to take action” Source: adapted from “Marketing Research: An Applied Approach”, N.K. Malhotra, 2017 21GE022 – Strategic Marketing - Module 4 12  Research objective 1: Problem identification Seeking to understand and/or to anticipate Research areas Example - Recession: Identifying UK consumer changes… Consumer behavior research Market-potential research Market-share research “Tesco has reported Brand image research ‘early signs’ of customers Market-characteristics research trading down in areas where grocers have seen Business-trends research ‘significant cost price Sales-analysis research pressure’ from inflation, Technology adoption research such as core staples like bread, pasta and beans.” Competitor strengths research www.marketingweek.com etc 21GE022 – Strategic Marketing - Module 4 13  Research objective 1: Problem identification Seeking to understand different types of ‘knowns-unknows’ * Aware Not Aware Known knowns Unknown knowns The company may be unaware of Understand Things we are aware of and Things we can understand the strong negative sentiment understand but are not aware of towards one competitor which it Research monitors them could exploit Known unknowns Unknown unknowns Research can identify under-utilized Don’t Things we are aware of but Things we neither are aware of data and its linkages understand don't understand nor understand The company not the local market are fully aware of the timing and Example: The company knows it needs to identify which potential impact of future tech Telecom key influences and marketing channels disruptions such as satellite-based operator resonate most with local customers internet. company Research can create foresight to Research can develop detailed insights anticipate disruptive shifts * Referred to as the "Rumsfeld matrix“ (www.wikipedia.com) 21GE022 – Strategic Marketing - Module 4 14  Research objective 2: Problem Solving Research leading to better decisions Research areas Example - Recession: Evolving Clubcard loyalty scheme Segment market potential Online engagement research Tesco gained insight into Optimal product design research consumers’ needs and barriers Concept testing to traditional loyalty schemes. Price elasticity research The value of the scheme for consumers had to go beyond Impact of pricing policies collecting points and vouchers. Marketing mix optimization As solution Tesco launched Channel margin research Clubcard Prices, which gives Optimal coverage analysis members exclusive discounts etc Source: adapted from www.marketingweek.com 21GE022 – Strategic Marketing - Module 4 15 What is Marketing Research ? “Marketing research is the function that links the consumer, customer, and public to the marketer through information—information used to identify and define opportunities and problems; generate, refine, and evaluate actions; monitor performance; and improve understanding of it as a process. It specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications. ” 21GE022 – Strategic Marketing - Module 4 16 A bit of terminology Note that ‘market research’ and ‘marketing research’ are often used interchangeably. At the core of the definitions of marketing research or market research is an understanding of the consumer/customer. Regardless of whether a research professional is defined as a ‘marketing researcher’, ‘market researcher’ or ‘customer/ consumer insight manager’, the focus upon customer is paramount. However, the role and expectations of marketing research can have a wider scope of practice. Indeed, it is recognized that it can include understanding the macro-business environment, monitoring market trends, conducting competitive analyses, answering business questions, identifying business opportunities and assessing potential risks. 21GE022 – Strategic Marketing - Module 4 17 Providers of research services Internal and External Syndicated services: info access via subscription basis Internal External Customized services: research design & execution One/many Marketing research Outside marketing research Market reports: off-the- shelf team(s) internal to the firm. companies hired to supply reports, data & briefs marketing research services. Field services: collection of data Their organizational via surveys, interviews… alignment varies. Panel providers: access to Full Limited consumer, expert…panels For example: aligned to services supplier services supplier Online communities: set Marketing, to Customer Offers entire range Specialized in access to online user groups… Insights, to a global center of of services. one/several excellence or shared services… Analytical services: data services only collection and analysis etc… Source: adapted from “Marketing Research: An Applied Approach”, N.K. Malhotra, 2017 21GE022 – Strategic Marketing - Module 4  Providers of research services – External providers It’s a crowded space. Mindful briefing and selection are key Market research Reporting sector Software research Briefing for possible Key criteria to Full-service Consultancy services sector provider select provider: research firms related to Subscription software and sample research/specialized & digital data providers, ✓ Background ✓ Data reliability panel providers industry reports social listening, self-service providers ✓ Precise problem ✓ Coverage/Scope definition ✓ Tailored solution ✓ Clear research ✓ Tools/methods objectives ✓ Analysis ability ✓ Target audience ✓ Expertise ✓ Budget/Timing ✓ Pricing ✓ etc. Source: based on top 20 classification by ESOMAR’s “Global Top Insights Companies”, 2024 21GE022 – Strategic Marketing - Module 4 Main sources of data Transactional data Typical approach: Data already in internal systems Secondary collected by others, Start with available Social Media data for other purposes, secondary data data and may require Publications Industry Reports further processing etc. Analyze all secondary data to Surveys further frame the Data collected first- Interviews research problem Primary hand for a specific Focus Groups research objective by data the company itself. It is Field trials Proceed to collect Product Tests primary data usually original. etc. Source: adapted from “Marketing Research: An Applied Approach”, N.K. Malhotra, 2017 21GE022 – Strategic Marketing - Module 4 Primary data: Qualitative and Quantitative Common Primary Research Methods Many different primary research (non-exhaustive) methods for generating insights coexist. Quantitative research: seeks to quantify data and, typically, apply some form of measurement and statistical analysis Quanlitative research: An unstructured, primarily exploratory design based on small samples, intended to provide deeper insights Source: adapted from “Marketing Research: An Applied Approach”, N.K. Malhotra, 2017 21GE022 – Strategic Marketing - Module 4 In the digital era: strong focus on quantitative methods Deep change: access to more customer data via so-called ‘Big Data’ BEFORE NOW PARTIAL COMPREHENSIVE INTERNAL DATA Digital era/ DATA + + internet DIFFICULT EASIER/FASTER TO COLLECT Exponential TO COLLECT + increase in + COSTLY COST-EFFECTIVE ANALYSIS data available ANALYSIS Challenging to build strong Emergence of advanced data quantitative research analytics and use of AI for research 21GE022 – Strategic Marketing - Module 4 Explosive growth of Big Data/AI 21GE022 – Strategic Marketing - Module 4 What is Data? 1.information, especially facts or numbers, used as a basis for decision-making, reasoning, Data discussion, or calculation /ˈdeɪtə/ 2. information in digital form that can be transmitted, stored or plural in form processed by a computer but singular use (mass plural noun) 21GE022 – Strategic Marketing - Module 4 24 TASK – What customer data could a telco have access to? 21GE022 – Strategic Marketing - Module 4 25  TASK – What customer data could a telco have access to? Personal Information: Service Information: Geolocation info: Specific websites Spending Habits Full Name Service Type (Mobile, GPS Location Data visited, even mobile (beyond telecom Address (billing and TV, Internet, etc.) (from mobile devices) App Activity (actions services). installation) Subscription Plan Cell Tower Location taken on certain apps, Creditworthiness Date of Birth Contract Details Home Address Geo- if tracked via (inferred from Gender Extra Services coordinates partnerships or financial behavior). Nationality Device Information Travel Patterns permissions). Income Estimation Email Address Connected devices International Roaming Contacts List (if (based on service Phone Number Mobile Data Speed Location synced via a telco plan, payment National ID/Passport Roaming Usage app, or shared methods…). Number (frequency, locations) Behavioral Data: permissions). Subscription to Third- Account Username Churn Likelihood Social Media Party Services (e.g., Password or PIN Usage Data: Prediction (based on Connections (if using telco-provided (encrypted) Call/SMS (numbers, usage patterns) integrated with telco billing to streaming). Payment Information duration, time) Purchase History (e.g., services or from third- Family Size or (Credit card, bank…) Data Usage, browsing upgrades,…) party partnerships) Household Employment (if history (if permitted) Customer Service Frequent Movement composition provided for corporate App Usage Data (e.g., Interaction Patterns (e.g. regularly Affiliation to social accounts) time spent on apps) Engagement with commute or visit). groups (inferred from Video Stream Usage Promotional Emails Precise Real-Time app usage, browsing Network data: Time Watching TV Billing History GPS Data (if enabled history …) IP-address Wi-Fi Usage Patterns Customer Loyalty on the telco app or Health & Fitness Data Signal strength… (when and where) prediction services). (wearables/app use). This list of data is purely illustrative only. Not all information may be permitted based on privacy laws and regulations like GDPR or not be collected based on the company’s own ethical guidelines. Data types extend beyond what customers typically expect an operator to have and may arise from advanced data analytics, partnerships, or third-party services 21GE022 – Strategic Marketing - Module 4 26 The emergence of ‘Big Data’ Data is Big, Fast-Growing and Unstructured Today, in 1 day we create ~80% of data that 64 Zetabytes the same amount of data, internet users create is of data in 2020 created since first humans unstructured 200 zetabytes It would take 150 Emails, social media all Belgians posts, text messages, ~125 years to 100 video files, audio download it 50 recordings, blogs… posts, news articles, 1980 1990 2000 2010 2023 VOLUME VELOCITY VARIETY 21GE022 – Strategic Marketing - Module 4 Big Data unlocks new potential… From discrete to always-on From hindsight to foresight Descriptive What happened? analytics Understand past experiences What will happen? Predictive Anticipate future outcomes analytics based on past & present How can we make it happen? Prescriptive analytics Decide based on success of predicted future outcome. Augmented How can it be made seamless? analytics Provide a synergistic AI-driven real-time customer experiences Source: generated by ChatGPT Source: adapted from Gartner, 2019 21GE022 – Strategic Marketing - Module 4 …yet Big Data remains widely untapped Poor data usage because of… ▪ Lack of clear data strategy On average, between 60% ▪ Insufficient data quality and 73% of all data within ▪ Inadequate data infrastructure an enterprise goes ▪ Limited data/analytics skills unused for analytics. ▪ Fragmented data sources Forrester ▪ Unable to access real-time data ▪ Data privacy concerns ▪ Lack of executive sponsorship ▪ etc. 21GE022 – Strategic Marketing - Module 4 Many struggle to go… From Data To Insight To Action 30 31 Yet, advanced analytics & AI create value potential Based on a 2018 study from McKinsey, Marketing & Sales represents a substantial potential value impact from using advanced data and AI value opportunity across sectors Value opportunities are created through use cases such as personalization, real-time pricing, improved targeting of individualized “next-best” offers, tailored service, churn prevention, anticipating customer risk … 21GE022 – Strategic Marketing - Module 4  Case: Netflix Big data to drive... 240m+ subscribers in over 190 countries Personalized experience Personalized recommendations Customized thumbnail images Tailored trailers & previews 21GE022 – Strategic Marketing - Module 4 33  Case: Netflix Big data to drive... 240m+ subscribers in over 190 countries Most popular content Viewer-driven original content creation Pre-/postproduction (location, editing...) Identification of partnership/content 21GE022 – Strategic Marketing - Module 4 34  Case: Netflix Big data to drive... 240m+ subscribers in over 190 countries Efficient operations Digital advertising/ campaign targeting Customer service AI chatbots Streaming quality 21GE022 – Strategic Marketing - Module 4 35  Case: Pepsi - Brand analytics Video External global media measurement and analytics company provide to measure brand reach, performance and health Source: www.comscore.com/Case-Studies/Making-a-Splash-at-Super-Bowl-LIII-with-Pepsi-and-bubly 21GE022 – Strategic Marketing - Module 4  Case: Nielsen/Obviously - Influencer analytics Source: www.nielsen.com/insights/2024/influencer-marketing-the-obvious-approach/ 21GE022 – Strategic Marketing - Module 4 Big Data / Data Analytics: Key challenges DATA PRIVACY ANALYSIS LACK OF CONCERNS PARALYSIS HUMAN INSIGHT 21GE022 – Strategic Marketing - Module 4  Key challenge 1 - Data privacy concerns Consumers are concerned*… Governments are concerned… * Source: www2.deloitte.com/us/en/insights/industry/technology/consumer-data-privacy-paradox.html 21GE022 – Strategic Marketing - Module 4 Key challenge 2 – Analysis-Paralysis 21GE022 – Strategic Marketing - Module 4 Key challenge 3 – Lack of Human Insights WHAT WHY people versus people do do it 21GE022 – Strategic Marketing - Module 4 Sidebar: Correlation versus Causation 21GE022 – Strategic Marketing - Module 4 Correlation does not imply Causation Rooster crows 13:00 11:00 Day 9:00 Time 7:00 5:00 3:00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21GE022 – Strategic Marketing - Module 4 Correlation does not imply Causation Rooster crows Sun rises 13:00 11:00 Day 9:00 Time 7:00 5:00 3:00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21GE022 – Strategic Marketing - Module 4  Correlation does not imply Causation # Number of Shark attacks Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21GE022 – Strategic Marketing - Module 4  Correlation does not imply Causation # ‘000$ Number of Sales of Shark attacks Ice cream Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21GE022 – Strategic Marketing - Module 4  Correlation does not imply Causation # ‘0 0 0 $ Num ber of Sales of Shark Ice attacks cream Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Temperature 21GE022 – Strategic Marketing - Module 4 Correlation does not imply Causation Death by falling down the Stairs Money spent on pets (bn$) 21GE022 – Strategic Marketing - Module 4 Getting to the WHY?: Other disciplines augment research While the use of data sciences/AI have exploded to turn a data into actionable insights, other scientific disciplines are key for marketing research. Both established as recently emerging disciplines should be considered. They are most often used to explore underlying human insights. For example: Anthropology Sociology Behavioral Psychology Neuroscience Economics 21GE022 – Strategic Marketing - Module 4 EXPLORING HUMAN INSIGHTS Applied Anthropology in Marketing 21GE022 – Strategic Marketing - Module 4 Source: Bronisław Malinowski with natives on Trobriand Islands, 1918. http://commons.wikimedia.org/ 21GE022 – Strategic Marketing - Module 4 Ethnography Natural ἔθνος éthnos "folk, people, nation" setting γράφω gráphō "I write" + Participant A branch of anthropology observation A systematic study of individual cultures 21GE022 – Strategic Marketing - Module 4  “What people say, what people do, and what they say they do are entirely different things” Margaret Mead, cultural anthropologist (1901-1978) Source: https://medium.com/@awardemmy/any-anthropologists-on-medium-117349432645 ©The Far Side 21GE022 – Strategic Marketing - Module 4  Thick description “Detailed account of field experiences in which the anthropologist makes explicit the patterns of cultural and social relationships and puts them in context.” Clifford Geertz (1926-2006) Source: Interpretation of Cultures, Clifford Geertz, 1973 21GE022 – Strategic Marketing - Module 4 TASK – Why is this boy winking? 21GE022 – Strategic Marketing - Module 4 55  You don’t really know, it depends on the context involuntary twitch conspiratorial sign to a friend parodying someone’s wink Source: https://www.flickr.com/photos/waseemanis/4651753405/in/photostream/ 21GE022 – Strategic Marketing - Module 4 Ethnographic research: from the jungle to the supermarket 21GE022 – Strategic Marketing - Module 4 21GE022 – Strategic Marketing - Module 4 58 TASK – Do you have pets (dog, cat…) at home? 21GE022 – Strategic Marketing - Module 4 59 TASK – Tell us something about your pet ? 21GE022 – Strategic Marketing - Module 4 60 COMPARE – Do you have pets (dog, cat…) at home? 21GE022 – Strategic Marketing - Module 4 61 “People who have pets speak of them in kinship terms.” “Respondents state that their cats and dogs are like ‘blood’ and members of the family” Maryann McCabe, Anthropologist 21GE022 – Strategic Marketing - Module 4 62 It’s all about marketing 137b$ annual spend e.g. ~900$ for a dog household/year +51% 2x growth of pet care household services spend workers over 5 years, 2018-2022 over 10 years, 2007-2017 21GE022 – Strategic Marketing - Module 4  Pet spa Pet funeral services Pets go Social Pet relocation/travel Pet attorneys 21GE022 – Strategic Marketing - Module 4 It’s all about humans… 39 % Lived on tighter budget to afford dog’s costs 1in10 36% broke up with would spend 4000+$ partner due on life-saving care to the dog 21GE022 – Strategic Marketing - Module 4 “People who have pets speak of them in kinship terms.” “Respondents state that their cats and dogs are like ‘blood’ and members of the family” Maryann McCabe, Anthropologist 21GE022 – Strategic Marketing - Module 4 66 21GE022 – Strategic Marketing - Module 4 21GE022 – Strategic Marketing - Module 4  Video 21GE022 – Strategic Marketing - Module 4 69 21GE022 – Strategic Marketing - Module 4  Video 21GE022 – Strategic Marketing - Module 4 71 Petco takes it a step further… 21GE022 – Strategic Marketing - Module 4 72 Key characteristics of Observed ethnographic research Action in Context Field Notes, Survey, Interviews, Diary study, Pictures & videos, Archive research,… In-depth Social and open Silences Not primarily Uncovering hypothesis-driven ‘Unknown Unknown’s’ Time-intensive (not aware of and Small samples not understood) 21GE022 – Strategic Marketing - Module 4 Anthropology applied to many marketing areas Product Brand Technology Innovation marketing Adoption Market Experience Marketing Expansion Design Culture 21GE022 – Strategic Marketing - Module 4 Key challenges of ethnographic research Insight confusion Qualitative insight do not provide quantification such as a market sizing or behavior frequency Business Mindset logic shift Ethnographic research Ethnographers have a may require time and different approach and money that firms are not way to approach a ready to spend problem 21GE022 – Strategic Marketing - Module 4  Integrating Big Data and Thick Data 21GE022 – Strategic Marketing - Module 4  WHAT WHY people do people do it 21GE022 – Strategic Marketing - Module 4  WHAT people do using Big Data to drive… Personalized experience Most popular content Efficient operations 21GE022 – Strategic Marketing - Module 4  “Machines' lack of understanding of causal relations is perhaps the WHAT biggest roadblock to giving them people do human-level intelligence.” Judea Pearl (born 1936) computer scientist and philosopher 21GE022 – Strategic Marketing - Module 4  WHAT WHY people do people do it 21GE022 – Strategic Marketing - Module 4  WHAT WHY people do people do it Grant McCracken, cultural anthropologist: “TV got better: from binging to feasting” “The couch potato has awoken… this TV watcher is different ! 21GE022 – Strategic Marketing - Module 4  Innovating with a new model to distribute shows and series: Releasing entire seasons at once WHY people do it 21GE022 – Strategic Marketing - Module 4  WHAT WHY people do people do it 21GE022 – Strategic Marketing - Module 4 Data Science & AI Anthropology/Ethnography Big data / quant Thick data / qual Hypothesis-driven Observation-driven Analytical methods Experiential immersion Vast amount of data Smaller samples Extrapolation Exploration Linear Iterative 21GE022 – Strategic Marketing - Module 4 Leveraging mixed research methods Explore Qual Quant Insight Explain Quant Qual Insight Evolve Quant Qual Insight 21GE022 – Strategic Marketing - Module 4 85 INTEGRATING PSYCHOLOGY Behavioral Economics and Marketing 21GE022 – Strategic Marketing - Module 4 Vide Video 21GE022 – Strategic Marketing - Module 4 Behavioral Economics Behavioral economics is the study of the psychological and cognitive factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by traditional economic theory. Behavioral economics is primarily concerned with the bounds of rationality of economic agents (the so-called homo economicus). Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory. 21GE022 – Strategic Marketing - Module 4 88 Behavioral Economics example - Anchoring effect. The anchoring effect is a psychological phenomenon in which an individual's judgments or decisions are influenced by a reference point or "anchor" which can be completely irrelevant. Both numeric and non-numeric anchoring have been reported in research. In numeric anchoring, once the value of the anchor is set, subsequent arguments, estimates, etc. made by an individual may change from what they would have otherwise been without the anchor. 21GE022 – Strategic Marketing - Module 4 89 Behavioral Economics example - Anchoring effect. 21GE022 – Strategic Marketing - Module 4 90 Behavioral Economics example - Endowment effect The endowment effect, also known as divestiture aversion, is the finding that people are more likely to retain an object they own than acquire that same object when they do not own it. The endowment theory can be defined as "an application of prospect theory positing that loss aversion associated with ownership explains observed exchange asymmetries." 21GE022 – Strategic Marketing - Module 4 91 Behavioral Economics example - Endowment effect 21GE022 – Strategic Marketing - Module 4 92 Behavioral Economics example – Cognitive bias A cognitive bias is a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own "subjective reality" from their perception of the input. 21GE022 – Strategic Marketing - Module 4 93 Behavioral Economics example – Cognitive bias Bias example > Framing effect—a cognitive bias that shapes consumer perception and behavior. Even though both labels convey the same information, consumers are more likely to choose the product labeled “80% fat-free" 21GE022 – Strategic Marketing - Module 4 94 TAKING INSIGHTS EVEN FURTHER Neuroscience applied in Marketing 21GE022 – Strategic Marketing - Module 4  Video 21GE022 – Strategic Marketing - Module 4 96 What is it? Neuromarketing is the application of neuroscience and cognitive science to marketing. This can include market research that tries to discover customer needs, motivations, and preferences that traditional methods like surveys and focus groups can’t reveal. Source: www.neurosciencemarketing.com 21GE022 – Strategic Marketing - Module 4 97 Appealing to all sense 21GE022 – Strategic Marketing - Module 4 Appealing to all sense 21GE022 – Strategic Marketing - Module 4 99 Appealing to all senses Video 21GE022 – Strategic Marketing - Module 4 100 Appealing to all sense 21GE022 – Strategic Marketing - Module 4 101 Appealing to all sense 21GE022 – Strategic Marketing - Module 4 Linking to brain functions FritoLay - PepsiCo Frito-Lay changed the texture and colour of its bags after it discovered that shiny bags featuring images of potato chips activates the cingulate cortex, a brain area producing feelings of shame and guilt. 21GE022 – Strategic Marketing - Module 4 103 Linking to brain functions Campbell soup – After testing redesigned soup labels using neuromarketing / biometric tools. Campbell’s found that adding, aroma vapors and eliminating the image of a spoon had an impact on sales. They also minimized logo size and changed font color and type when EEG scans and eye tracking results discovered consumers remembered these features better than earlier label features. 21GE022 – Strategic Marketing - Module 4 104 Appealing to the subconscious 21GE022 – Strategic Marketing - Module 4 Appealing to the subconscious 21GE022 – Strategic Marketing - Module 4 Appealing to the subconscious 21GE022 – Strategic Marketing - Module 4 Neuroscience in Marketing, under strict guidelines… About 95% of consumer decisions are made subconsciously, and emotional campaigns are more than twice as likely to generate a very high ROI. To accomplish this, marketers need to understand the implicit associations of consumers so they can measure the emotional potency and brand-appropriateness of a product or campaign. Why is neuromarketing useful? Neuromarketing studies human cognitive responses to stimuli in an attempt to create effective commercial campaigns. Important: Neuromarketing faces regulatory and ethical scrutiny due to concerns about privacy, manipulation, and consumer autonomy. Regulatory actions (such as the bans the use of advertising based on subliminal perception under the EU Advertising Regulation Act) in combination with ethical guidelines aim for transparency, ensuring that consumers are aware of how their neurological data is being used and that their decision-making is not unfairly manipulated. 21GE022 – Strategic Marketing - Module 4  Thank You! Do you have questions or would like to share your feedback? [email protected] 21GE022 – Strategic Marketing - Module 4 Links to videos in this presentation Michael Buble Super Bowl 2019 ad https://www.youtube.com/watch?v=I-_Uh-vZXgo Pedigree ad https://www.youtube.com/watch?v=s0gfLz9mZvc PetCo ad https://www.youtube.com/watch?v=jcW5eDSMw3w Thaler and Behavioural Economics https://www.youtube.com/watch?v=cYNN2GNdn3o Neuroscience in branding https://www.youtube.com/watch?v=4eIDBV4Mpek Mastercard’s Sonic Brand https://www.youtube.com/watch?v=_0ZPDxEJ7wA 21GEO22A – Strategic Marketing - Module X 110