Positioning Through Neuromarketing

Recently I was surfing for term neuromarketing on the web. After a great deal of digging, I found simplest definition from Wikipedia.org to restate here:

Neuromarketing is a new field of marketing that studies consumers' sensorimotor, cognitive, and affective response to marketing stimuli. Researchers use technologies such as functional magnetic resonance imaging (fMRI) to measure changes in activity in parts of the brain, electroencephalography (EEG) to measure activity in specific regional spectra of the brain response, and/or sensors to measure changes in one's physiological state (heart rate, respiratory rate, galvanic skin response) to learn why consumers make the decisions they do, and what part of the brain is telling them to do it.

My next search was on to understand the use of neuromarketing beyond color of the packaging, the sound the box makes when shaken, lights used in the store and near display. The question in my mind was how neuromarketing sinks with positioning strategy of a brand. Or is it a merely sales conversion strategy at the moment of truth? And I found a beautiful article written by Anoothi Vishal in Business Standard on August 04, 2009; “Tweaked to please” on positioning strategy of Le Meridian Hotels in India. And I would love to restate some lines from the same article here before discussing positioning through neuromarketing:

When you step in to any of the eight Le Meridien hotels in India, indeed any in the world, you should be able to smell almost as soon as you step into the lobby — emerging through a portal, an art work usually, at the hotel entrance — a peculiar scent of old books and parchment in a library. The scent machines in the lobby, not always visible except to the most discerning of the guests, are there to get you in the “right frame of mind” in sync with the hotel chain’s positioning as a destination for “guests who seek out a new perspective and cultural discovery in their travel experience”.

This is a good example of neuromarketing activity which actually demonstrates the positioning of the brand directly to the target customer. Though this is the example of a hospitality industry, neuromarketing, if properly defined, will work in any kind of industry.

Efficient Rural Marketing

Take an off road from the highway to any village in India, you will find a different world. When you see a defined, natural and unconstructed narrow path, the village road, field with crop or in crop in waiting, small corner with panwala, chaiwala where people in small group discussing local and national issues, natural gardens with few dense trees where children are playing their own manufactured games and the ladies working on something around their home, you are in real India where more than 60% population is based. The people here do not experiment much with their traditions. They use their tacit knowledge for all professional and non professional decisions. Professional decision like when to cultivate, when to harvest, what to produce, how to sell, and other non farm decisions along with personal decision are taken based on their knowledge, they earned in centuries. Television media has reached this population but continuous electricity is still on the way. The other communication tools are radio, local news paper, and their interaction in panchayat (a frequent gathering to discuss issues related with village). Given all these the effective rural marketing is the latest concern of many organizations today. In ‘RURAL CONSUMPTION AND GROWTH’ I’ve discussed the role of government and corporate to strengthen rural consumption by investing and participating in rural India value chain. In this post I want to discuss following strategies which I feel can make rural marketing more efficient:

1. Rural Value Chain comprise of the producer (farmer), the processor, the retailer and the consumer. The organizations need to think where they are adding value. I feel vertical integration of companies dealing with agricultural product will increase the efficiency of every one in the value chain. Companies who are not dealing with agricultural output directly should participate in the development of rural infrastructure, which can be used to increase efficiency of their own distribution.

2. Share of non farm income of rural India is increasing. More than 20% of rural population earns equal to urban middle class. The rural consumption potential is big but it is not geographically concentrated. Also the taste and preferences of rural consumer are different from the urban consumers. The buying decision of rural consumer depends on following parameters:
a. Their cultural upbringing.
b. Cyclical farm and non farm earnings.
c. Trust on the product and seller.
d. Local availability.
In view of above companies focusing on rural market need to reassess their strategies on following parameter:
a. Robust product design focusing performance to build trust among rural consumer.
b. Innovative and cost efficient supply chain by involving local retailers.
c. Brand communication in local language.

3. For long term sustainable consumption of rural consumers, the corporate and government must invest in farmer’s business education. The objectives of such education should focus on following parameters:
a. What to produce? What market wants?
b. How to improve crop yield?
c. How to reduce cost of production?

In order to achieve sustainable penetration in Indian rural market, companies need to strategies’ hard from understanding rural consumers, their product related requirements, robust design and offering, right and localized communication, localized distribution and participating in rural value chain by investing in infrastructure and education for mutual gain.

CATEGORY VS BRAND

One distribution channel is setting up the rules of game in today’s environment is multi franchise organized retail. Now a days the only distribution channel is prominent for the most of the consumer durable and FMCG product is organized retail. This multi franchise model is redefining challenges of branding and product management.
The older brand building activities now become category building activity. For example, imagine a manufacturer of refrigerator who successfully builds a brand and in turn customers turn up to the retail store. But inside the store, story is different. The need trigger or decision to have a refrigerator could have been augmented by the said manufacturer, but inside the store customer is open to buy any brand. For a walk in customer inside a store there are lot of variables available to take a purchase decision. It may or may not be dependent on the branding of the company which prompted the customer to consider the product.
This case implies that the older way of advertising and branding are basically building more of a category than a brand. At this point positioning of product plays a key role. The brand managers should think of which gap or problem they are solving by making a positioning of a product. Because a slight differentiation if exploited properly could play a major role in making purchase decision. These gaps or points of differentiation are available everywhere. It could be price point, product features, point of entry in customer home, geography, channel or even variables like buying need of customer, perceived value of product by the customers etc.
While positioning a product one should be very clear on competitive strategy. As in multi franchise sales network a wrong strategy will give opportunity to competition to win and set the direction of game. It’s a zero sum game. Its like a game of cards where you keep guessing of available cards with the opponents. You check your strong and weak cards along with setting trump card. You make a plan with a sequence of moves. And if your sequence of moves are ideal you can even win with your weaker cards, because you are setting the direction and opponents have to react to your move. But there is one flaw. The whole strategy is based on few real things ( strong and weak cards, trump etc) and more guess work like who are the opponents having cards stronger than your weaker cards. And an assumption that all the best cards are not in one opponents basket. So it is risky. And so it is challenging. When you put a wrong move someone else wins and then he starts setting directions to the game. Since guess work and risk are still on the table, you’ll have to wait for next opportunity to win a move and take the commands of the game back in your folds. Strong and weak cards can be replaced by competitive strengths and weaknesses of any organization.