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.

RURAL CONSUMPTION AND GROWTH

One of the key indicators of domestic consumption is agricultural growth. Agriculture and allied activities contribute around 20 % of GDP and feeds more than 58 % population. Now in the recent economic crisis when we started looking inward, which was right in place earlier too, for overall growth, the emerging concern is the growth of Agriculture which defines consumption pattern of India. During tenth plan (2002 to 2007) agriculture grew by merely 2.3 % against 7.6% of overall GDP growth rate.
The key issues I want to raise is the role of Indian industries and government in developing rural infrastructure, education and health, deploying policy and participating in rural value chain, pricing, insurance, credit and microcredit. Recent global economic turmoil forced us to think beyond urban population to ensure sustainable growth. Companies like Hero Honda, Marico, HUL are outperforming in today’s scenario only because of their rural penetration. Two things are common in these companies. One their product is well designed product to suit rural taste supported by (two) matching delivery mechanism. Take example of Hero Honda whose basic models (main volume and revenue generators) are well positioned for common man’s requirement like fuel efficiency and reliability. Along with their product they have matching delivery network too with widest coverage in tier two and tier three cities. Bajaj, one of the competitors of Hero Honda, closely matched their rural network compared to Hero Honda but failed to position right product. But all these strategies are meant only to take share of rural expenditure. The Indian industries should think beyond that towards participation in rural value chain and infrastructure developments. ITC’s e-Choupal is a good example where the model is not only participating in farmer’s value chain but also simplifying companies supply chain. Such innovation creates value for both company and customer. From government perspective, we need radical changes in agriculture policy, pricing mechanism, credit and insurance to farmers. Along with these a healthy investment in infrastructure, education and health will give sustainable results in long term.

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.