How to understand the consumers - and respectively the markets way of thinking

Boricean Veronica Doctoral School of Economics, Al. I. Cuza University - Iai

boriceanv@yahoo.com

ABSTRACT This paper is based on the premise that the reason of the market comes as a result of the interaction between the conscious and the unconscious of the consumers and the managers. The paradigm brain body mind society plays an important role, too, just like the crucial connections among them, since no element can function without the others. The human mind has always been considered an enigma - and especially the way decisions are made mentally. The current paper will introduce some solutions to a better understanding of the market, and to a way of reading the market, and respectively, the consumers. How can one discover products that best answer to consumers needs? Or how can communication between the consumer and the producer be made more effective, so that the product reflects the maximum satisfaction of consumers needs? Here are some questions frequently asked not only by people in marketing, questions that inspired a lot of papers, including the current one.

1. Introduction The consumer is the one in whose name the whole economic process takes place. That is why all producers, all tenders must take into account the needs of the customers and of the market, as well as their solvency. The main purpose of this paper, that is at the same time the main objective of neuromarketing, is to decipher the processes that take place in the consumers mind. This was made possible by applying the medical imagery technology, that produced a major change in the relationship between companies and their customers. One must, therefore, look for the origin of neuromarketing in neurosciences. The purpose is to understand the functioning of the human spirit by using the interdisciplinarity. The image of a certain brand created mostly by publicity causes emotions that can become stronger than the direct effect of the product. This demonstrates the reality presented by David Ogilvy, which relates to the fact that products are created by the factory, and the brand by the consumers mind. In sum, it is obvious that the product, no matter how good it was made, has no value unless it reaches the consumers it was meant for. Publicity is, in this case, an intermediary between producers and buyers, demand and request, and the neuromarketing techniques will facilitate this relationship. In addition, publicity and implicitly the products they promote represent one of the various sides of technological revolution; they answer to real needs, more or less conscious. 1

The needs are not imposed/ created by publicity, they are only reflected and highlighted by it. Publicity is the mirror that reflects the evolution of society, to all its levels. Publicity does not create new needs. It would not be capable of something like it. It can only discover them, make them awake, and never to produce them. What publicity imposes is something weve already had inside us (Baylon C., 2000, p. 305). 1. Consumers behaviour definitions and approaches The consumer is the main objective for the marketing specialists. Knowing the consumers needs and his behaviour on the market is vital for a company to substantiate their decisions regarding the production and sale (Maxim, 2000: 152). The consumers behaviour is nothing but human nature, and it is influenced by totally different factors. Consequently, the study of human behaviour requires an interdisciplinary approach, including economic and technical studies, psychology, sociology, anthropology, law, medical sciences and recently neurology etc. The first studies of human behaviour were the motivational studies, that can explain part of the individuals decisions to purchase a certain good or not. These were later capitalized in the study of consumers behaviour. In this way, psychoanalists were the first to discover the motives that cause a certain behaviour to the consumer. Since 1938 the psychologist H.A. Murray made a list of 30 fundamental motives of the behaviour, which allow the creation of a book of personalities (Murray, 1938). In 1952, A.H. Maslow introduced his theory of individual hierarchy of needs. Researches in this area have recently increased considerably (Maslow, 1952). The quality of a consumer is defined by any economic subject whose behaviour is oriented towards the satisfaction of individual needs, those of the micro-group, or even their existence (family, company etc). The quality of a buyer is defined by the subjects who actually request the merchandise from the vendor, no matter if the merchandise will be used to satisfy their own needs or somebody elses (for whom it has been purchased). The reference about behaviour issues operates with terms as consumers behaviour, as well as buyers behaviour. Normally, the buyer, the payer and the consumer are one and the same. This is the classic case, where satisfying the consumers needs is made through the market solely, with no intermediary, by own means. The consumer of purchased goods is also the person who supports the price of goods and services; consequently, the buyers behaviour will be identical to the consumers, that is a of certain type. The second possible situation on the market (which does not arise as often as the previous one) is also an extreme case, in which the three positions (consumer, buyer, and payer) are three different persons (...). The dissociation between the buyer and the consumer situates the buyers behaviour on the first place, without neglecting the consumers behaviour (which actually results in the buyers behaviour) (Maxim, 2000: 152-153). By consumer s behaviour we generally understand the sum of attitudes and decisions regarding the use of consumers revenues for acquisition or saving. This behaviour is materialized in acts of choice, pursuit, acquisition, disposal and use of goods, materials and services. In order to have a general image of the consumers human behaviour, a study is required of the consumers individual characteristics, their causes as well as the process of materializing the behaviour decisions. In sum, the consumer is the one in the name of whom the whole economic process takes place. This is why all producers, all tenders must take into account the necessities of the customers as well as the market, of their solvency. K. Rohner thinks there is a huge opening of the public towards these innovations: Empirical values illustrate that the contribution of steady customers impulses to innovations can reach up to 100%, whereas for important 2

renovations is of 76%, 58% corresponding to small updates stimulated by the market, that do not come from inside of the company, as well. Consequently, the customers must be taken into consideration no later than the planning stage and right before the conception of the marketing plan (...). The sooner customers are involved in planning, the less risks of a wrong decicion making(Rohner, 1999: 163). Likewise, the consumers buying behaviour refers to the buying behaviour of the final consumers individuals and households who purchse goods and services for their personal consumption. All these consumers together compose the consumer (Kotler & Armstrong, 2003: 220). There are huge differences among the consumers worldwide accordong to age, revenue, education, taste and other factors. Equally different are goods and services purchased from the market. The way these consumers make their own decisions depends on a different range of factors. The marketing operators must understand the way consumers transform marketing and other variables into purchase reactions. The consumers behaviour is influenced by his features and by the decisional process this covers. The consumers features refer to the following four main factors: cultural, social, personal and psychological.

MARKETING FACTORS: THE FOUR PS

SOCIAL ENVIROMNENT FACTORS: culture,classes, social groups, family etc.

SITUATIONAL FACTORS

3.2

PERSONALITY EXPERIENCE MOTIVATION PERCEPTION

ATTITUDES PERSONAL FACTORS FEED-BACK: EVALUATION

DECISIONAL PROCESS AND TREATMENT OF INFORMATION

PURCHASE

Figure 1. Consumers behaviour (Source: Marcenac et al., 2002: 85)

Culture is the main determiner of a persons wishes and of its behaviour. It includes the basic values, perceptions, preferences and behaviours a person obtains from the family and from other important institutions. Marketing operators are trying to keep up with cultural changes that suggest new ways of serving the customers. Social classes communicate with secondary cultures whose members have acquired a similar social prestige based on ocupation, revenue, education, wealth, as well as other variables. People with different cultural features, that of secondary culture and social class prefer different products and brands. Social factors influence, too, consumers behaviour. The reference groups of a person their family, friends, the social organizations, professional associations strongly influence the choice of a certain brand and of a certain product. The position of someone inside o group can be defined by their role and their status. A buyer would choose the products and brands that reflect their own role and status. The age of the buyer, the stage of his life, occupation, financial status, lifestyle, along with other personal aspects and psychological factors influence the decision to purchase. Young consumers have different needs and wishes compared to older ones; the needs of young couples recently married are different from those of retired couples, just the way that consumers with big revenues have different buying behaviours from those with less money. Before conceiving the marketing strategies, a company needs to be familiar with the consumers and the way they make their decisions. The number of participants to the buying process and the effort increase along with the complexity of the acquisition situation. According to the classification made by P. Kotler and G. Armstrong in Principles of Marketing, there are three types of buying behaviour: The routine reaction; Solving limited problems; Limited solving of a problem. When purchasing a certain product, the consumer covers a decisional process, which resides in the acknowledgement of the need, search for information, evaluation of the variants, making the decision to buy and the post-acquisition behaviour. The task of a marketing operator is to know the buying behaviour of the consumer in all of its stages and the corresponding influential factors. Hence, the operator can elaborate an efficient marketing plan for the targeted market. As for the new products, the consumers have a different speed of reaction, according to their own features and the products characteristics. Producers have been trying to bring to attention new products to early potential customers, especially to those who have the traits of opinion. The buying behaviour of a person is the result of a complex interaction between cultural, social, personal and psychological factors. Although many of these factors cannot be controlled by operators, the can prove useful to identify and know the consumers that marketing operators are trying to influence.

2. The paradigm brain body mind society The marketing specialists believe they can make a clear distinction and also understand consumers experiences by pieces, such as: thoughts, events happening at the body level, another piece concerning the environment, respectively the society. Moreover, specialists assume that the events happening inside each piece have no important connections to similar others, since the analysis is made separately. Actually, consumers do not live their lives by pieces, in the same way companies are organized, for instance. The mind, the brain, the body and society are dynamically influencing each other. In order to really understand the consumers, one must not focus on what is happening to one of these four pieces, but on their interaction. Therefore, for instance, when one finds about the psychological processes of consumers, their understanding improves and they can 4

act better than when they were aware of cultural and neurologic origins of the respective processes. Actually, in their opinion, the mind does not exist in the absence of the brain, of the body and the society (Le Doux, 2002: 13-32). In any system and particularly in the living systems they are influencing each other. The most famous exampels are those of blind tasting , where the mere lack of information about the brand could influence the taste of the subjects. In addition, a certain dish that is considered delicacy by some cultural context caould produce violent physical reactions in another context.

Brain

Society

Mind Figure 2. New paradigm of integrity mind brain body society (Source: Zaltman, 2007: 64)

Body

This is one of the major errors that will prove very hard to amend. Nevertheless, research of the unity mind, body, brain and society will doubt more and more the connection among the four elements. For instance, there are studies that demonstrate that people from different cultures sense differently physical pain, in terms of their vision and approach. Other researchers prove that a certain social class influences the presence of heart disease, when it comes to factors as education, health, medical service, diet or lifestyle. 3. Publicity a means of influencing consumers behaviour Influencing the consumers behaviour is mainly realised by publicity. Publicity, regarded as a mass communication means, is intended to influence opinions and change behaviours. It creates and adapts its messages according to the code and context most likely to reach the intended audience. The message knows its public beforehand and consequently its expectations and the way they can be realized. Last, the aptitude of publicity is that of suggesting to the consumer, instead of ordering. Research indicates that publicity can influence the decision to purchase. There has been demonstrated the ability of publicity to transmit the idea of getting and advantage as a result of the acquisition of the promoted product, that is the way the latter is presented and promoted, hence the poetic function of the publicity. Likewise, analysts consider that publicity contributes to selling the products and services of a certain company. Publicity also accomplishes a social function, since it notifies to the public the new opportunities, and it rises the productivity and the way of living. One gets more than commercial information through publicity. People are equally receptors of an amount of silent information that describes social rules, attitudes, accepted roles, in short the model of social behaviour of the consumer.

4. Deciphering the consumers behaviour with the help of neuromarketing Neuromarketing is one of the basic domains one can better understand the consumers behaviour. Here, marketing experts discover wishes, expectancies and hidden reserves of the consumers options, using the technology transfer of medical imagery, which produces a major change in the relationship between the companies and their customers. Professor Vernon L. Smidts, the winner of the Nobel Prize in Economy in 2002, invented the term of neuromarketing that same year. For the author, the term designates the use of specific techniques, such as brain mechanisms, in order to understand the consumers behaviour, and to improve the marketing strategies. Therefore, neuromarketing highlights an extremely important aspect: the consumer makes decisions at the following levels: mentally, emotionally and instinctually. That is why, in order to be a success, any promotion needs to address those mental levels. In order to determine the way in which consumers perceive, evaluate and react to stimuli generated by publicity, a certain product or a service, one must study the answers given by the eyes and the brain. These theories concerning the consumers bahaviour and the way decicions are made mentally must be first validated in order to be valid. The verifiability test proves decisive when research methodology is trying to avoid a false reality. Paul Samuelson affirms that, among others: By a meaningful theorem I simply understand a hypothesis regarding empirical data that could, basically, be refuted, be it only under ideal circumstances (...). The direct or indirect measurement (or even the possibility of another factual testing) is a necessary condition to avoid the mystery situation when everybody could have their own opinions concerning the same words. The scientifical enunciations about reality must be verified by others. As Hutchinson says, basically they must be susceptibile of empirical testing or reductible to such sentences by logical inference or mathematics. If there is nu possibility of enlightenment regarding the truth of an assertion, this has a mystical characteristic. In order to refer to a hopeful conclusion, let us note J.M. Keynes: The only way to advance very far is to make up new and improved models. Therefore, progress resides in improving the pattern. Such an improvement that opens new horizons to research could be named methodological neuroindividualism. It is a derived term from neuromarketing the term belongs to Ale Smidts, from Erasmus University in Rotterdam, since 2002 it has its origins in neurosciences, and it has been foreseen by Peter Drucker; Apparently there always will be the need to sell. But the scope of marketing is to render the selling process superfluous, to know and understand the customer so well, that the product or service could match perfectly and sell by itself. Ideally, the result of marketing shloud be a customer ready to buy. The only thing necessary, at that moment, would be the availability of that certain product or service. In sum, Peter Drucker was a visionary of neuromarketing: The main objective of neuromarketing is deciphering the processes that take place in the consumers mind in order ot discover their wishes and hidden causes of their options, in order to have a possibility to get them what they want. This has become possible by the use of medical imagery technique, whixh brings a major change in the relationship of the companies and their customers. Professor Ale Smidts claims that neuromarketing requires the identification of brain mechanism techniques in order to understand the consumers behaviour so as to maximize the impact of publicity. Obviously, one of the various domains investigated by neuromarketing is the identification of brain mechanisms, i.e. the buying decision, which holds a special place for the sellers. So far, there have been studied five research axis: Increase of the brand preference; improvement of publicity; maximization of the impact of publicity; 6

 improvement of TV commercials; operationalization of branding.

5. Basic techniques used in neuromarketing The progress in the field of sciences studying the brain lead to new questions and appealing answers with reference to the provocative way in which thinking works. Innovating techniques to study the brain accelerated this progress. All techniques the techniques are based on neuromarketing - scanning brain techniques heading to pictures representing the structure and the way neurons function. Using neuroimaging, researchers can directly study the brain activity, while the subjects are employed in different mental jobs. This techniques rapidly developing are promising in revolutioning the study of consumers behavior. Thus, at basic techniques used in neuromarketing are: Electroencepfalography (EEG), which appeared in 1920, and recorded the electrical potential changes in the brain during various activities. EEG can measure the time required to process a stimulus. Magnetoencefalografie (MEG), appeared in 1960, measuring the activation and inhibition of nerve cells in the brain. It offers precise information over the time of activation and inhibition. Computed axial tomography (CAT / CT), appeared in 1970. Generate images of the human organs. Positron emission tomography (PET), appeared in 1970. Measured the flow of the blood stream and the intensity of metabolism in the brain. Functional magnetic resonance imaging (fMRI), appeared in 1990. Identifies the brains activity simultaneously in more regions. Event related optical signal (ECT), appeared in 1990. It registers the direction of the look and indicates the areas where it concentrates. Although the applications of neuromarketing are reduced momentarily to studies of brain reactions to icecream compared to yoghurt or chocolate (Neuroconsult, Austria, in an experiment for Unilever), there are limitless possibilities. The most recent neuromarketing search belongs to THQ, a company that produces video games, who evaluated the reations of players to Frontlines shooter (which has not been released yet), using techniques of scanning the brain waves, provided by EmSense. Functional magnetic resonance imaging (fMRI) is still an experiment and not too many details are available to public, but the future will provide more and more media products that have been studied in the lab and adjusted to human emotions depending on the results of a new marketing research, where no forms are filled, but the brain activity of potential customers is scanned. Media products will be more and more targeted and they will address more precisely to various areas of the brain, which are responsible for emotions and feelings. In art, the reactions of the receiver could be programmed, at least at the basic level. But there is a long way to go to the right anticipation of katharsis, for the softwares that interpret raw data produced by billions of electric impulses that connect, every second, at least 100 billion neurons of a ordinary brain.

Conclusions The customers behaviour is very complex and very difficult to decode. There is always room for interpretation when it comes to the way of thinking and decision of the consumer, or even their behaviour, generally. Therefore, the research possibilities are multiple given the fact that neuromarketing techniques, just like publicity, address the consumer. In sum, neuromarketing can be defined as a new branch of marketing, based on the techniques resulting from neurosciences, meant for a better identification and understanding of the brain mechanisms that generate the consumers behaviour, in order to increase the efficacity of commercial actions of the companies. Unlike subliminal advertising, neuromarketing suffers from hype not hoax. We need to get real about neuromarketing and the claims made for it. Turning back technological development is impossible. Like cloning and stem cell research, some applications will be desirable but others will require guidelines, ethical charters and perhaps even legislation to control the direction of the technology. For the moment, neuromarketing is in retreat. But it is a retreat into the closet not into oblivion.

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