1. of them is the Richard Thaler


1.1  Thesis background

Best services for writing your paper according to Trustpilot

Premium Partner
From $18.00 per page
4,8 / 5
Writers Experience
Recommended Service
From $13.90 per page
4,6 / 5
Writers Experience
From $20.00 per page
4,5 / 5
Writers Experience
* All Partners were chosen among 50+ writing services by our Customer Satisfaction Team

With such a huge number of brands which is keep
growing, companies faced a challenge with staying competitive and attractive
for customers. In order to achieve maximum success on the market, brands are forced
to explore customer behavior in depth. For many years customer-oriented
approach has become a priority for marketers and advertisers in order to
minimize the risks as well as increase the sales and to get desired return on
investment (ROI) through understanding customer’s need and providing them with
relevant products.  (Williams J. 2010) It is obvious that the main driving force of customer’s
decision- making process is human brain itself. Most often people are not able
to explain why they prefer exact product, thus, brands need to explore
unconscious aspect of customer behavior which results in development of such a
new direction as neuromarketing. Since its appear in 2002 popularity of neuromarketing
has been growing and in recent years many brands started to use it widely while
conducting customer research. (Madan, C. R. 2010.) Neuromarketing uses the
results of serious scientific works, including works which received two Nobel
Prizes in economics over the last 15 years (and one of them is the Richard
Thaler Award in 2017), the number of articles on neurobiology of decision
making has grown more than in 10 times since 2003, and more than 200 companies
that offer neuromarketing research appeared in the world.

1.2  Goal of the research

The main goal of the research is to get deeper into
essence of neuromarketing and understand how neuromarketing influences on main
marketing inputs such as customer behavior, decision-making, advertisement
strategies, pricing and branding. Neuromarketing creates absolutely new
approach to the customer research, which, apparently, will reduce risk of
failure and save a lot of money for many brands due to the awareness of
customer’s insights and understanding, how to attract desired target groups. Aim
of this work is to conduct objective analysis on the current influence of
neuroscience on the key marketing inputs and detect some tendencies concerning
the development of more efficient strategies, attracting consumers based on the
objective review of scientific literature and practical world experiences.

1.3  Relevance of the research

It is became obvious that traditional marketing
techniques are not so reliable and it is quite risky to build marketing
strategy based on the self-report data from the consumers, because when it
comes to the subliminal processes of brain consumer may not know his real
emotions, thus, it can not be self-reported. (Charles Y., Stephen S. 2009) As
everything new, neuromarketing and increasing interest to it cause many
controversies in society. Lack of information about what exactly it is and how
it works has created two opposite attitudes to this science. On the one hand,
neuromarketing is seen as a breaching of customer’s privacy and danger, that
marketers and advertisers will use people’s brain and it will give an
opportunity to manipulate over the customer choices in order to achieve
economic success. On the other hand, specialists claim that detailed
information is extremely valuable for companies as allows to understand how
product must look and which function it must have based on the unconscious
needs and desires of the customer. Due to the neuromarketing tools companies
can develop more relevant product, elaborate more structured and efficient
marketing campaigns, maximize profits and minimize risks of failure on the
market. (Ariely, & Berns, 2010) It is very important to research more
closely issue of neuromarketing and its impact on the companies as well as on
the customers, because it gives more detailed information which was impossible
to obtain by the traditional marketing tools.

1.4  Research question and research problem

Problems of the following research are the deep
understanding of what is neuromarketing, how it works, define all the impacts
of the neuromarketing tools on the world market and analyze ethical issues
which can arise with the future wide use of the neuroscience in marketing
practice. Based on the introduction and explanations regarding the relevance of
the following topic, the main research question was detected: how brands can benefit from the implication
of neuromarketing tools in practice? Nevertheless, I would like to define
one more additional research question, concerning the ethical aspect of the
neuromarketing activities: is it possible
to consider the applying of neuroscience as a marketing tool ethically


2.1  Essence of the neuromarketing

Many various definitions
of neuromarketing can be found in literature, some authors see it as field of neuroscience
(Perrachione & Perrachione, 2008) or scientific approach (Senior & Lee,
2008), while others consider neuromarketing to be a part of marketing. (Fisher
et al., 2010) If combine all different views about the neuromarketing definitions
 it can be claimed that some researchers
see neuromarketing mostly as perspective marketing tools, (Fisher et al., 2010;
Senior & Lee, 2008; Butler, 2008;) but others think that it is way of
gathering scientifically valuable information. (Perrachione & Perrachione,
2008; Green & Holbert, 2012) Generalized definition can look in the
following way: neuromarketing – is a research of consumer’s behavior, which can
be used as a marketing tool, based on the information obtained from measurements
of brain activity, feelings, emotions, cognitive processes and other psychological
activities related to the nervous system of the human being. Neuromarketing is
a wide science which is combining neuroscience, psychology and marketing together,
it teaches how minds of consumers work and how to use this information
beneficially. Neuromarketing uses neuroscience and different techniques of the
cognitive science in order to analyze customer’s reactions on the marketing
activities. (Calvert, & Brammer, 2012) Customer’s responses can be measured
by various of indexes, such as heart rate, magnetic resonance imaging, eye
tracking, electroencephalography (brain electrical activity), galvonic skin
responses, facial response and brain waves.

How it looks in a practice? Stories about people who
come to the supermarket and buy a lot of things which they do not need and did
not plan to buy quite often occur in everyday life, so what induces them to buy
it? Detection of these unconscious aspects, making people buy absolutely
needless goods is extremely important for marketers and it became possible with
application of neuromarketing techniques. According
to Transparency Market Research, the market of neuromarketing in 2016 was $ 960
million; by 2025 it is expected to grow up to $ 2.2 billion with the CAGR
(compound annual growth rate) of 10.2%. In order to understand clearly how neuromarketing works
in practice, first it is necessary to know more information about brain and its
structure. Brain is a part of entral nervous system and undoubtedly it is crucial
organ in human body, as controls all the physical and mental activities in
human body. (Minddisorders, 2014; Macmillandictionary, 2014). The most
common approach is to divide brain in three areas, which are called (1)forebrain
– takes care of thinking process and speech, (2) midbrain, which controls eye
movements and (3) hindbrain – brain area responsible for heart activity,
breathe and various subliminal processes.

There are a lot of neurons inside the nervous systems,
their main function is to interact with each other, which can occur both
electrically or chemically. Neuromarking uses special neuroimaging tools thus
can observe 2 forms and obtain the whole information about area of brain which
were activated in response to particular marketing stimuli.