Neurobranding - Dr Peter Steidl - Expert Marketer Magazine

Neurobranding _________________________________________

Dr Peter Steidl

SAMPLE CHAPTERS

Neurobranding - Dr Peter Steidl

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SAMPLE CHAPTERS - PART I

Part I

The Consumer's Mind

Here I focus on some of the key neuroscience findings that allow us to

develop a new perspective on how consumers think, feel and make decisions,

thus providing the astute marketer with new perspectives and directions.

The key ideas covered in this section include the following:

• a brand is a memory in the consumer's mind,

• the non-conscious mind decides what to 'put into memory,'

• images and emotions are the language of the mind,

• memories are the building blocks of the consumer's decisions,

• the consumer has 'two brains,'

• dopamine drives the consumer's actions.


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1 A brand is a memory in the

consumer's mind

I believe the best way to build a solid foundation is to start at the most

basic level. As marketing efforts often aim at building a brand that

consumers will buy, it might be a reasonable starting point to ask

ourselves, 'What is a brand?'

I could argue that a brand is the logo or mark. This is, after all, where

the idea of a brand supposedly comes from: the practice of burning

markings into the hides of cattle to show ownership.

But from the marketing point of view, this would not suffice. When

marketers think about brands, we don't limit our thinking to the brand

mark or logo; we think about it much more broadly. When we talk about

brand image, we don't talk about how consumers feel about the logo or

brand mark but rather about the perceptions, attitudes and preferences

created by all the exposures and experiences the consumer has had with

the brand.

For the purposes of this book, rather than hypothesizing about what a

brand is, we can use a simple exercise to answer this question once and

for all:

Close your eyes for a minute and think about Red Bull.


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In your mind, you may have seen the Red Bull can or bottle, the logo,

maybe a Red Bull event or race, or a Red Bull T-shirt. You may have

recalled the taste of Red Bull or recalled an occasion when you consumed

it.

Whatever it was that flooded into your conscious mind, it is obviously

something you have been exposed to in the past. The totality of all these

past memories forms a memory pattern that represents the Red Bull brand

in your mind.

The way you feel about Red Bull, and the likelihood of you choosing to

drink Red Bull in the future or recommending it to others, is largely

determined by this memory pattern. I say largely because there are also

situational factors, such as availability, who you are with, what others in

the group order, or POS promotions and so forth that may impact on your

decision at the time.

If you accept that a brand is a memory pattern in the consumer's

mind, then you also agree implicitly that marketing – including marketing

communications, packaging, pricing, the choice of distribution channels,

product innovation, shopper marketing, selling, and in fact everything a

marketer does – is aimed at creating and shaping this brand memory.

You also know from your own experience that memories that are not

activated will slowly fade; i.e., you will forget them. This happens because

when the memories are not activated (i.e. called up), the connections

between the neurons that carry the information get weaker and weaker

until the memory has faded away.

The corollary is also true: memories that are activated frequently get

stronger. This means I have to add another challenge to our list: we must

refresh or activate an existing brand memory to ensure it doesn't fade into

oblivion.


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In summary, then, the brand strategy challenge is threefold:

1. create a brand memory;

2. shape this brand memory;

3. activate the brand memory to ensure it doesn't fade away.

Let's pause at this stage to consider this more fully. If you currently

use brand pyramids, you are implicitly assuming that a brand is defined

by certain attributes and that the marketing challenge is to create strong

associations between these attributes and your brand. Why? Because you

believe these attributes will shape brand perceptions and drive purchases.

You basically ignore that, in the consumer’s mind, the brand is likely

to be much richer than a mere set of attributes. You ignore that (as we

will see later on) the purchase decision is rarely driven by the analytical

mind that considers such a set of attributes. And you make your task

unnecessarily complex, while at the same time limiting the likely impact

your strategies will have, by building them on an artificial premise that

doesn't reflect the real world.

Approach your next marketing challenge with an open mind, starting

with the most basic premise that is rooted soundly in the real world: 'a

brand is a memory.' If you do this, you will find that you reduce

complexity, set new priorities, and, most importantly, are able to focus on

what is important rather than on what some artificial model or concept

(such as a brand pyramid or brand wheels) has elevated to an undeserved

level of importance.

Let's explore, albeit in a superficial way at this early stage, some key

marketing challenges. Not all brands go through the same life cycle, but

four key stages highlight the challenges most marketers face when

attempting to manage the brand memory in the consumer's mind:


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• Launch a new brand = establish a brand memory in the

consumer's mind

When you launch a new brand, you are attempting to build a new

memory in the consumer's mind. This is an exciting stage as you can

shape this memory more easily at this point than you can later on

when memory patterns already exist but may have to be changed.

Right now, there is no existing brand memory, so you are free to shape

this first brand memory the consumer – or, more accurately, the

consumer's mind – is constructing.

The benefit of having a long-term brand vision is immediately

obvious: it allows you to shape the brand memory over time

according to your brand's advantage, thus providing you with future

opportunities to gain market share..

• Position the brand as a challenger = energize the brand memory

Let's assume your challenge is to position your brand as a favorable

alternative to leading brand(s). To do this effectively, you need to

understand the memory constructs the consumer has developed for

the leading brands as well as for your own relatively new brand. Most

likely, the former will have quite diverse and strong memory patterns,

while your brand will have a far more superficial and weak memory

construct.

In particular, you need to understand the emotional territory in the

consumer's mind so you can connect your brand with it. You need to

know which territory, if any, is already 'owned' by competitive brands

or by your brand, and which territory has not been occupied so far.

This calls for research methodologies that allow you to delve much

deeper into the consumer's mind than group discussions or interviews


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can do. Your objective is to identify which fertile emotional territory

your brand can occupy in order to energize the brand memory.

• Capitalize on a strong market position = diversify the brand-

memory pattern

Once you have a 'star brand' that is widely recognized as a leading

brand (albeit possibly in a market niche only), you may want to

diversify the relationship your brand has with the consumer. This may

take the form of selling a wider range of products or services under

your brand (e.g., we know that consumers with multiple banking

relationships are less likely to move to another bank) or of broadening

the positioning of the brand in the consumer's mind.

The latter can be accomplished by diversifying the emotional footprint

of the brand. For example, you may connect causes the target

consumer feels strongly about with the brand memory, take

ownership of new emotional territory, or even disrupt existing

memory patterns.

• Revitalize the mature brand = surprise and engage

A brand matures when the brand memory matures. It no longer

carries strong emotions; it may be fading or may be relegated to a

position of irrelevance. You need to revitalize the brand; i.e., bring

new meaning and energy to the brand memory in the consumer's

mind.

This brief overview demonstrates the variety of challenges marketers

like you are facing. We can condense the challenge to three sets of

questions:


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1. How can you increase the likelihood that the signals you send (e.g.,

through advertising and promotions, package design, pricing, product

offer, or brand-activation initiatives) are stored in memory (i.e. that

they actually change the existing brand memory rather than be

ignored like the vast majority of signals that reach the consumer's

mind)?

2. How do you make sure these signals contribute to effectively creating

and shaping the brand memory in the way intended?

3. Once the brand memory has matured and the brand lacks emotional

energy, how can you revitalize the brand by introducing relevant

emotions into the brand memory? How can you break through the

barrier of indifference and generate emotional engagement? How can

you convince consumers that your brand is still addressing their goals?

All of this will become quite obvious once you have accepted that a

brand is a memory. It should also be quite obvious that artificial models

or concepts like brand pyramids fail to focus your attention on the

essence of your marketing task. Your observations are not as useful if you

do not know how to create, shape and activate memories effectively,

because you have changed your perspective without gaining any tangible

benefit.

Due to advances in neuroscience research, over the last decade we

have gained more useful and powerful insights into how the brain works

than we did during the full century before that. I will explore several of

these insights in greater depth in the following chapters.


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SAMPLE CHAPTERS - PART II

Part II

Neurobranding – the new marketing tool

We are now ready to address some complex marketing challenges and build

on our understanding of how the consumer's mind works. Our journey will

takes us from a new understanding of habitual buying to considered

purchase decisions. We explore how consumers categorize and what this

means to brands. We also consider emotions, goals and codes, and explain

why brand vision archetypes work. Finally, we deal with disruptive

strategies and explore the opportunities that cultural disruption brings.


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9 Influencing habitual buying

Too often we assume that consumers who regularly buy the same

brand have a strong brand preference. However, most likely these

consumers are engaging in habitual buying. They aren’t making purchase

decisions but are simply repeating a behavior without giving it a second

thought. This behavior is driven by their memories without any conscious

intervention.

Memories

Habitual Buying

Min

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Undoubtedly, you are very happy if you have consumers buying your

brand habitually, and you don't want to upset their habitual purchase

behavior. However, you do want to attract the consumers who are

habitually buying your competitors' brands.

Thus, the big question is this: how can you disrupt the habits of

consumers buying competitive brands without upsetting the habitual

buying of consumers buying your brand? This is a key question I will

explore in this section.

Let me warn you at the outset that I will be using some well-known

case examples to illustrate they key points. You may find the first few

pages rather boring if you are already aware of these examples, but do

continue, as along with the examples I will attempt to provide you with a

neuroscience-based approach to a market that largely buys habitually.

We are creatures of habit

Marketers often assume that consumers make purchase decisions

when they buy a product or service, especially when the product or

service in question is one they are responsible for. The truth is that

consumers make many of their regular purchases on a routine basis: they

don’t make a purchase decision every time they buy; rather, they

habitually buy the same brand and product again and again. The original

purchase decision that provides the foundation for their habitual buying

behavior may have been made many years ago.

This phenomenon has been studied extensively, especially in the

FMCG category. Ehrenberg, the father of consumer panels, has proven

again and again that repeat purchases are typically not a result of brand

loyalty but of habit.

True loyalty is based on consumers believing that the brand they buy


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is the best choice for them.2 Habitual buying means that the consumer

doesn’t think about whether the product or brand is the best choice for

them; they simply repeat past purchases. This suggests that the brand

'works for them,’ but we cannot assume that they are loyal to it.

Habitual buying allows consumers to simplify their lives by avoiding

the need to spend many hours checking all options open to them with

each purchase. Here are some typical habitual buying situations:

Fast Moving Consumer Goods

Most FMCG purchases are habitual in nature; for example, when

buying groceries in a supermarket, most consumers habitually buy the

same brand without making a conscious purchase decision. Some shopper

marketing experts claim that 95% of purchase decisions are made in-

store. This may well be true, but it is an incomplete assessment of the

situation. The truth is more like approximately 95% of grocery items are

bought habitually. The purchase decision for the remaining 5% of purchases

is typically made in-store. However, the consumer was most likely primed

long before they entered the store, with advertising, promotions, word-of-

mouth and past experience all playing an important role in their decision.

Having said that, there is little doubt that effective shopper marketing

can increase turnover and encourage brand switching. I am not

suggesting that shopper marketing is not important or effective. It is and

can be; however, it is naive to believe that 95% of grocery purchases are

in-store purchase decisions. Rather, the strength of shopper marketing is

its capability to turn a habitual purchase into a considered one, leading to

the purchase of a different brand. Out-of-stock situations or effective POS

2 ‘Best’ is defined by the particular goal they want to address and their perceptions of the brand’s ability to deliver.


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promotions can also disrupt habitual buying.

Only purchases that carry a high degree of emotion – perhaps the

consumer enjoys the process of shopping, or is worried about getting it

wrong because it is a significant purchase and they have little experience

with the category – are likely to naturally follow a conscious purchase

decision making process.

Repetition creates habits

But habitual buying is by no means limited to FMCGs. How many

consumers review which search engine they use every time they search for

something on-line? How many consumers review their magazine or

newspaper subscriptions every time a renewal payment falls due? The

same applies to PayTV and performing arts subscriptions, memberships

(e.g., for road side assistance), superannuation, savings plans and many

other types of regular payments. Consumers don't review their banking

arrangements every time they make a home loan mortgage payment but

simply stick with the same financial institution.

Even when the fee payable varies from period to period, consumers

often habitualize; for example, they don't re-evaluate the companies who

provide their utilities, such as electricity, water or gas, every time they get

an invoice. They automatically pay it.

Having said that, as a review of these service providers can be

triggered by a bill, it is no wonder that many suppliers encourage

consumers to take the automatic debit option. This eliminates the

moment when the consumer might look at the bill and think, Maybe there

is a less expensive option… or, Is this really worth that much money? It is

also clear that more, frequent and smaller payments are less likely to lead

to a re-evaluation of options than larger, less frequent (say, yearly)


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payments.

Major purchases

Some consumers even habitualize, to some extent, the purchase of

major items such as cars, electronic equipment or holidays. In the case of

cars, they may habitually buy the same brand, and limit their purchase

decision to the model and specifications. Similarly, Apple computer or

Blackberry owners may consider buying the next model without ever

seriously considering alternative brands. There is of course a large

number of consumers who do look at a range of options when buying a

new mobile phone, computer, TV set or sound system.

Also, we can expect items that need to be replaced more frequently

are more likely to be bought habitually than others that have much longer

replacement cycles. For example, a mobile phone 'habit' is more likely to

develop than a sound-system 'habit.’

Occasion specific habits

Habitual buying may not be brand specific; some habits are occasion

specific. For example, some consumers always drink the same beer or

wine on certain occasions while having another habitual drink on other

occasions: they may automatically buy a certain brand of beer when

having a barbecue but always buy a particular brand of wine when having

guests for dinner.

Heuristics

There are habits that are not brand-, product- or occasion-based but

that follow certain rules or heuristics. For example, a consumer may have

a rule like 'Don't buy unless the brand is on sale,' or even, 'Don't buy at all

unless there is a major sale on.’


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These habits can become as entrenched as the habitual purchase of

specific items. Retailers have spent considerable sums to promote such

behavior and are now suffering the consequences, as many consumers

have adopted heuristics that see them shopping only when retailers have

sales on.

Once we stop and consider the wide range of habits that determine

what consumers buy, we realize that habitual buying is actually a much

more important and difficult challenge for marketers to address than is

the task of influencing considered purchase decisions.

Obviously, the vast majority of habitual purchases rest on a purchase

decision made at some stage in the consumer's past. It therefore makes

sense to try to attract consumers entering particular product markets

early on and to encourage them to develop a habitual buying behavior

before another brand does.

In some product categories, physiological factors help; for example, we

tend to become used to certain flavors early in our lives, and these

preferred flavors stick with us for a long time, sometimes for life.

Chocolate manufacturers such as Cadbury actively pursue young

consumers and get them used to the distinctive Cadbury taste. Once this

has happened, these consumers are likely to prefer Cadbury over, say,

Hershey, and vice versa. This is apparently why Cadbury always uses top-

quality chocolate in fun items aimed at children.

Sometimes we have an opportunity to observe the power of habits in a

market. This happened in Australia with flavored milk. In South Australia,

iced coffee became the market leader and consumers got used to

habitually buying iced coffees. In the neighboring state of Victoria,

consumers habitually bought mainly chocolate-flavored milk. When the

same company ended up owning both operations, it promoted chocolate


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flavored milk in South Australia. Now, more than a decade later, South

Australians by and large still prefer iced coffee, which, by the way, never

took off in a big way in Victoria.

Let's now explore a neuroscience-based view of habitual buying to see

how you can most effectively deal with the marketing challenge habitual

buying poses.

The neuroscience perspective

Let's start with an exercise:

Go back into your past and remember learning to drive a car. (If you

never did, remember learning to play some sport, ride a bike, or master a

musical instrument or language).

When you were learning to drive a car, you would have gone, over

time, from conscious thinking to habitual action. While you were learning

the basics, you were most likely focusing consciously on what you needed

to do: when to apply the brakes and how hard, when and how to change

gears, how to use the indicator in time for your planned turn, when to

look behind you before changing lanes, and so on. For most of us, learning

how to drive was quite stressful, and we had to give it our full attention to

be able to cope with the multitude of tasks and new challenges we faced.

After all, the road is a complex environment, with lots of often

unpredictable things happening simultaneously.

However, once you got more and more used to driving, you most

likely started to give this activity less and less of your full attention.

Driving would eventually have become routine to you, so that rather than

consciously planning each move, you could let your non-conscious mind –

the old part of your brain – take over.


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This means the actions you take when driving are now triggered by

your mind without you even being aware of it. One could say that it feels

more and more like driving is something you can do ‘automatically,’ with

no need to focus your attention on how to drive (unless a very unfamiliar

road situation unfolds before you, such as a road accident).

Habits are learned. This is why we first have to learn and gain

experience before we can leave it to our non-conscious mind to take over.

Learning through repetitive behavior creates memories of how to do the

task. The non-conscious mind then relies on the massive bank of

memories that represent experiences we have gathered in the past.

A series of studies by Duke University researchers showed that 45% of

the time, people do the same thing at the same time every day while

thinking about something else. Letting your non-conscious mind take

care of activities is, of course, a very important part of how your brain

works. If you couldn’t let your non-conscious mind take over activities 3

you have learnt, you would not be able to do more than one thing at a

time,because all of your conscious attention would be focused on it. As

mentioned earlier, your non-conscious mind can process 11 million bits of

information per second, while our conscious mind can only process some

40 bits per second.

Your non-conscious mind comprises largely of the sections of the

brain that humans have had for millions of years, while our conscious

mind resides mainly in the newer parts of our brain, namely, the frontal

lobes. This means that nature has had a very long time to refine and lift

3 Note that we can't multitask; i.e., use our conscious mind to do more than one thing at once. When we try to multitask, our conscious mind switches from one task to the next rather than carrying out these tasks concurrently. The non-conscious mind, on the other hand, can carry out a multitude of tasks concurrently. This means you can carry out habitual behaviour driven by your non-conscious mind while still addressing another task with your conscious mind.


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the effectiveness of the non-conscious mind but hardly any time at all to

do the same with the conscious mind.

I have already referred to Nobel Prize Laureate Daniel Kahneman's

System 1 and System 2 in Part I.

These implicit and explicit systems are parallel and can learn different

things about a brand. For example, surveys often show that consumers are

quite negative about fast food, yet the implicit system may have stored

early childhood experiences when fast food was typically a reward for a

special occasion or a job well done, etc.5 This explains why even

consumers who make derogatory statements about fast food (with their

conscious, rational mind) tend to eat at fast-food outlets – and sometimes

quite frequently (due to the non-conscious habitual mind that reacts to

learned codes, a topic I will cover in a later section).

We are interested in particular in habitual buying, which is part of the

implicit system. Neale Martin6 has introduced a marketing friendly

nomenclature, when introducing the terms Executive and Habitual Mind.

The executive mind (Kahneman's System 1) is the conscious mind

where cognitive processes take place that may lead to the development of

memories. We create intentional thought and apply 'logic' to make

decisions. We think about past experiences and wonder how a purchase

might work for us in the future.

On the other hand, the habitual mind (one aspect of Kahneman's

System 2) is the non-conscious mind that not only manages our body –

from breathing and heartbeat to digestion and body temperature – but

also stores and accesses a multitude of learned responses. The habitual

5 Christian Scheier and Dirk Held, Die Neurologik erfolgreicher Marketkommunikation, in Neuromarketing, Hans-Georg Haeusel, Haufe 2005 6 Neale Martin, Habit. The 95% of Behavior Marketers Ignore, Pearson Education 2008


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mind draws on the past to decide what needs to be done. It cannot

contemplate the future.

Importantly, the executive mind cannot access the habitual mind. This

is why consumers often don't really know why they do what they do. They

can, of course, use their executive mind to rationalize their actions, but

the reasons they give for these actions are not factual. They did not really

follow such logic when they decided to accept or reject a purchase

opportunity. Rather, their habitual mind made the decision, and they

have no idea what this decision was truly based on.

The habitual mind is nonverbal, so it doesn't learn by reading or by

listening to an explanation. It only learns through repetition, non-

consciously associating an action with an outcome. This explains why

consumers who consciously decide to switch to another brand may fall

back into their old buying habits. Their decision to make the switch has

no impact on their learned habits. If they are not in conscious mode while

shopping, there is a good chance they will simply follow their old

established habits. For example, when supermarket shopping, they may

pick up what they used to buy off the shelves. At some later stage – at the

check-out, when unpacking at home or when using the product – they

may suddenly think, Oh! I meant to buy the other brand I saw in an ad last

night. I completely forgot. Never mind, next time....

Accelerating the learning process

The learning of habits can be accelerated through feedback such as

stimulus-response (classical conditioning) or through the modification of

voluntary behavior (operant conditioning). A positive reinforcement

comprises of anything a consumer wants, while a negative reinforcement

would be removing something the consumer doesn't want.


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The timing of reinforcement is essential to the training process taking

place in the mind. The closer the reinforcement is to the behavior, the

faster the association will be made and the quicker the neural circuits will

form. For example, getting reward points close to purchase might be a

great reinforcement, while getting a statement showing reward points

days if not weeks later is likely to activate conscious thinking instead of

reinforce habitual behavior. Reinforcement works with the habitual mind

while rewards work with the conscious, executive mind. Once the

conscious mind gets involved, there is no habitual learning process.

When we repeat a behavior, even one that involves many independent

steps, it becomes etched into our brain, ready to be re-activated. Then,

once the habit has been formed, we no longer need to consciously attend

to the habitual behavior – we can go on autopilot. The habitual system

works underneath the executive mind, responding to triggers the

executive mind doesn't even know about. This is what makes habits so

hard to break; they often occur before the conscious mind can intervene.

Research undertaken by Nielsen shows that customers who purchase a

brand eight times have a 97% likelihood of buying the brand a ninth time.

This helps explain why major brands are so dominant. It's market inertia.

Customers continue to buy out of habit.

In summary, habitual buying is learned behavior. There is no cognitive

process, no consideration of alternatives, and no assessment of benefits.

The purchase is driven by stimulus-response. The process has been

habitualized and delegated to the 'old' brain, which does not engage in

cognitive thinking.


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Repeat and Alert Triggers

As I have already mentioned, our non-conscious mind doesn't actually

make decisions but rather repeats behavior, guided by memory patterns

that have been established by carrying out this behavior again and again

in the past. Essentially, it is a matter of learning to repeat behavior

without giving it attention.

But how does our non-conscious mind know which behaviors to

repeat when? Why don't we find ourselves sitting up in bed at night,

acting as if we are driving a car? The simple answer is that there are repeat

triggers the brain can interpret, and the habitual behavior is only repeated

when one of these repeat triggers activates it.

When you get into your car, the familiar environment triggers the

driving behavior. You don’t have to consciously think, I will now put the

key into the ignition and fasten my seatbelt, and then step on the brakes

while pushing the start button (or whatever steps you have to take in your

car). Your habitual mind simply takes over.

If you have ever rented an unfamiliar car or bought a new car, you will

most likely have experience alert triggers caused by, for example, the

unfamiliar instruments or their unfamiliar positioning on the dashboard.

In these cases, you have to give your conscious attention to starting the

car and driving until your mind becomes familiar with the instruments

and with the car’s particular features and behavior, at which point your

non-conscious mind can take over.

In other words, there are two prerequisites for the non-conscious

mind to take over:

• Firstly, we must have ‘trained’ the mind by carrying out the behavior

many times before (the number of times necessary will depend on

how complex and variable the context is).


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• Secondly, there has to be a repeat trigger that starts the habitual

behavior, i.e., one that leads to our non-conscious mind taking over.

Habits can be simple or complex. Once learned, a habit is activated by

a trigger or cue associated with a context-dependent stimulus. The phone

rings; you answer it. Somebody extends his hand to you; you shake it.

When a habit is formed, it can be executed with little or no conscious

intervention. A habit might become dormant, but it doesn't disappear.

It follows that the marketer's challenge is not just to develop habitual

buying but also to create repeat triggers that activate the consumer

behavior. In many instances, the repeat trigger is simply the visual image

of the packaging or the brand name.

In an earlier section, I talked about the value of developing brand

assets. Sometimes it is possible to develop a distinct signal (sound, visual,

scent, et cetera) that is unique to the brand, allowing the marketer to

create a repeat trigger.

While repeat triggers spark off the habitual behavior, alert triggers

disrupt habitual habitual behavior and bring the conscious mind into

play. Any change to a product – including features, performance,

appearance, price, or channel of distribution – can be an alert trigger and

move the consumer from a habitual response into an executive-mind

review. In a retail environment, an out-of-stock situation can be a

powerful alert trigger.

Similarly, changing the underlying nature of the deal can dislodge

existing habits, even if a company is sweetening the deal. Many sales

promotions cause this drawback, because altering the nature of the deal

interrupts the automatic response. Alert triggers constitute a risk for

brands that rely heavily on habitual buying.


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Marketing implications

Establishing habits

As habits develop through repetition, it follows that you need

consumers to stick with a brand or product for a period of time for the

desired habits to develop. There are a multitude of strategies marketers

use to make this happen, ranging from offering significant discounts on

large volume purchases to launching challenges or trial periods that

encourage the consumer to keep using the product for an extended period

of time, to positioning the brand as part of an existing routine.

To illustrate the last point, consider a mouthwash. Brushing one's

teeth is, for many consumers, already a habit. By linking the use of

mouthwash to this activity, consumers are more likely to habitualize

using mouthwash as well.

The most important point is this: we know that consumers are likely

to develop habitual purchasing behavior with respect to the majority of

regularly bought products. It is therefore important to encourage brand

purchases when a consumer enters a product category.

For example, first time mothers will eventually habitually buy a wide

range of baby products, from nappies to creams, baby food to soap. It

therefore makes sense to present the mother with some free product

samples when she is still recovering from giving birth in a maternity ward.

Likewise, when consumers move into new homes, they will need to

establish new shopping habits. It therefore makes sense for a local

supermarket, convenience store or hardware store to work with real estate

agents to offer these consumers a welcome pack with special coupons for

their retail outlets.

In these instances, it is relatively easy to identify the target group and


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there are intermediaries, such as companies that distribute free samples

to maternity wards or real estate agents who know who is moving to the

area.

Sometimes all a marketer can do is target specific age groups. I have

already mentioned the importance of getting young consumers to develop

a chocolate preference. The same applies to tea, coffee and other

products, no matter what life stage, although some preferences will be

shaped by what is already being bought habitually by the household the

consumer grew up in.

In other product categories, there may be opportunities to sell

subscriptions, which encourages habitual buying, or there may be

opportunities to establish monthly payment deductions from a bank

account, which not only encourages habitual behavior but also reduces

the risk of alert triggers.

An improved offer may lead to a loss of market share

Moving a consumer from habitual to considered buying represents a

risk for any brand that has a significant following of habitual purchasers.

We might think that improving the offer is a sure-fire way to keep these

habitual buyers loyal, but this may not be the case.

Let me illustrate the problem by using a simple example: say that a

breakfast cereal manufacturer offers a standard cereal product that is

largely bought habitually and that enjoys a significant market share. Let's

assume that this manufacturer then launches a new range of cereal

products with various flavors, delivered by adding fruit to the cereal.

This is the likely sequence of events for at least some – and possibly

many – of the habitual buyers: the brand offers a number of new flavors,

and this innovation is promoted as something that is really worth


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trying. So the consumer who routinely bought this brand may now try a

new flavor.

When this happens, the consumer first breaks their habitual buying

routines and, second, experiences the benefit of variety. As a

consequence, they may well recognize the benefit of not always buying

the same product without thinking. To have something a little different

may in fact turn out to be quite pleasant. The consequence is that the

consumer may start to look for more change, more variety or even more

excitement. And this means that the consumer starts to move from

habitual purchasing to purchasing that is directed by an objective: in this

case, novelty.

At this point, consumers are likely to consider other brands as well.

After all, they were never really brand loyal – they were just making a

habitual purchase – and so there is no barrier to change. The established

habit has been replaced with a dedicated search for new flavor

experiences, and the search is not limited to the brand that was previously

bought habitually.

This sequence of events explains why brands that rely largely on

habitual buying need to be very careful when pushing the consumer into a

conscious purchase decision, especially when introducing the consumer

to the joys of variety. Having said that, it is equally important for brands

to be ready with interesting options and new experiences for when the

consumer decides to seek these out. Brands also need to innovate to stay

fresh and ensure they don’t mature.

The challenge is this: we marketers don't want to encourage habitually

buying consumers to make a change, but we do want to make sure the

consumers who are already looking for a change are attracted to our

brand, the product and the packaging. Habitual buying provides a high


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degree of stability and predictability, but it constitutes one of the most

difficult marketing challenges when we are trying to attract consumers

from competitive brands or when we need to offer variations and

excitement for when our habitual buyers grow restless.

Other significant implications include the following:

1. We need to focus on behavior rather than attitudes or beliefs. Habits

occur through the repetition of behavior and remain stable over time.

Attitudes and beliefs are transitory and difficult to translate into

predictable action.

2 Training the habitual mind is different to 'educating' the executive

mind. The executive mind can learn through reason and intention, the

habitual mind learns through repetition and reward.

3 Habits are activated by triggers. Advertisements and in-store

promotions can be designed to trigger habitual buying. For example,

out-of-home promotions of fast-food outlets can be effective triggers

leading to purchase.

4 When consumers buy your brand on a habitual basis, you don't want

them to think about this purchase. If the consumer starts thinking

consciously about the purchase, they may well also start to consider

alternative brands and products.

5 If you want to preserve habitual buying, you need to make sure that

every aspect of the offer and how it is being delivered is within the

buyer's expectations. Any significant change in any aspect of your

product – for example, its pricing, distribution or promotion – can

activate the conscious mind, and once the executive mind is involved

the purchase is no longer habitual.

6 On the positive side, if you want habitual purchasing to continue,

consider that strongly entrenched habits are hard to change. When


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companies reduce the quality of a product or service, we don't

typically see a mass defection. A large majority of customers continue

to buy the product pretty much the same way they always have. Losses

are usually less than 5% above normal attrition.

7 However, to gain market share in a category where purchasing is

largely habitual, you will have to get your competitor's customers to

think about their purchase . Strongly entrenched habits are difficult to

break. You will need to make a significant effort to first get the

consumer's executive mind to make the change and to then

habitualize the new behavior, i.e., the purchase of your brand.

Breaking habits

Habits can be broken more easily when a change carries low risk,

requires low effort and results in immediate rewards.

• Low risk: The consumer does not have to make a significant

investment which could result in losses should the new option turn

out to be less rewarding than expected. Clearly, with many FMCG

purchases, this is the case. If the new brand/product doesn't deliver as

expected, the consumer simply switches back to the one they

habitually bought before, and their loss is minimal.

• Low effort: In some countries, changing a financial institution is a

messy and complicated undertaking, requiring many forms to be

completed and details to be secured. This leads to consumers staying

with their financial institutions even if they are no longer happy with

their choice.

• Immediate rewards: When switching to another brand/product, the


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new choice is more likely to become habitualized if the consumer gets

immediate positive rewards, such as enjoyable flavors or useful new

features, leading to repeat purchases.

This is all very good – or it would be, if we did not have to contend

with competitors! As I have already stated, the marketing challenge

consists of the following:

• get the habitual buyers of competing brands to consciously consider

their purchase (which is essential to getting them to switch to your

brand),

• while at the same time discouraging habitual buyers of your brand to

consciously consider their purchase (because making the purchase

conscious may lead them to try a competitive brand).

As mentioned earlier, the problem with product variations, new

product features, discounts, and other initiatives based on an aspect of

the traditional marketing mix is that all of these strategies may bring the

purchase into the consumer's conscious mind, and when the habitual

buyers of your own brand start to consider their purchase consciously, the

risk is that they also consider competitive brands.

The same applies to renewing a health policy or general insurance

policy, a magazine subscription or a local retail outlet. By promoting a

special benefit or new feature, you risk encouraging the consumer, who

has been acting habitually, to now turn the purchase into a considered

decision-making process.

Strategic Options

There are two core options we can consider when dealing with

habitual behavior.


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Strategy 1: Avoid a conscious decision by using sub-conscious signals

Strategy 2: Take the competition to a higher level

We will now discuss these strategies in some depth.

Documents

Neurobranding - Dr Peter Steidl - Expert Marketer Magazine