Though we consider ourselves logical beings, most of our decisions are based on our experience, upbringing, or instincts. These instincts are deep-rooted in our subconscious mind.
In the 1970s, Nestle was looking to expand its business in Japan. The company wished to launch coffee in the land of traditional tea drinkers.
Nestle conducted a series of experiments to decide if their product will be accepted in the market. The results of the experiments were in their favour.
Hence the company was confident of the product’s success in the Japanese market. They launched Nescafe on a grand scale, reaching every big and small retailer.
However, to their disappointment, the product did not sell. The company decided to hire a psychology expert, Dr. Clotaire Rapaille to help increase their sales.
He observed that Japanese consumers had no connection or association with coffee. The Japanese kids have grown up drinking tea and watching their parents drink tea. The products available in the market were inspired by tea. Hence it was difficult for them to accept coffee as a beverage.
This led the company to change its approach and propel the consumers’ purchase decisions.
The company, based on these observations, decided to launch coffee-flavoured candies. These candies or chocolates were expected to create a childhood association with coffee. The children that grew up eating these candies instinctively preferred coffee over tea and thus over time, Nescafe became popular in Japan.
The company successfully managed to tweak the consumer preference towards coffee. And today, the revenue of the Coffee segment amounts to US$46.56bn in 2023. The market is expected to grow annually by 5.17% (CAGR 2023-2025).
This is a classic example of Neuromarketing.
‘Neuromarketing’ loosely refers to the measurement of physiological and neural signals to gain insight into customers’ motivations, preferences, and decisions, which can help inform creative advertising, product development, pricing, and other marketing areas.
The Association of National Advertisers reports that brands that use neuromarketing believe that a 16.3% increase in revenue is due to the use of neuromarketing.
Though Neuromarketing is in practice since 2007, it is still in a nascent stage. The main reason for this is expensive technology. Wide acceptance and easy access to technologies that track facial coding, biometric data interpretation, sentiment analysis, eye tracking, etc.
Another upcoming tool of neuromarketing is VR (Virtual Reality) technology. The VR technologies are equipped to measure emotional response and track neural activity, and are comparatively less expensive, however, are not yet widely used.
Marketing is a dynamic field that constantly changes. To understand the latest trends marketers, have to regularly update their knowledge and skills to implement and adapt to the changes efficiently and effortlessly.
MIT School of Distance Education (MITSDE) is one such institute that understands the current skills gap in the market and strives hard to reduce it. For this purpose, MITSDE brings to you PG Diploma in Marketing Management (PGDM Marketing Management). This course covers the basics & the latest concepts in marketing, gives hands-on training on the latest tools, and teaches you to create a brand, analyze market trends, and design marketing campaigns.