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Electroencephalography in Consumer Research Electroencephalography in Consumer Research A cognitive psychological and neurological review of consumer research using EEG August 2016 Yuhee Kim (10859969) Supervisor: Dr. M.A.S. (Maarten) Boksem Co-assessor: Dhr. dr. I.G. (Ilja) Sligte Literature Thesis MSc in Brain and Cognitive Science, Cognitive Neuroscience Track [email protected] TABLE OF CONTENTS Introduction Chapter 1. An Overview of Electroencephalography (EEG) Historical Background of EEG / Advantages and Disadvantages of EEG / EEG Classification / ERP Classification / EEG Device Chapter 2. Cognitive Psychological and Neuroscientific Approaches to Fundamental Cognitive Functions Related to Consumer Behavior Part 1. Cognitive Psychological Approach to Cognitive Functions and Consumer Behavior Information Processing / Decision-making Part 2. Neuroscientific Approach to Cognitive Functions and Consumer Behavior Attention / Emotion / Memory / Conclusion Chapter 3. A Review of Consumer Research Using EEG Based on Marketing Mix Models Part 1. A Scope of Consumer Neuroscience Research Part 2. Product-related Research Brand Name / Brand Extension / Product Preference / Service Recovery Evaluation / Real Cases Part 3. Promotion-related Research Memorability of TV Commercials / Emotion in TV Commercials / Real Cases Conclusion References 3 Introduction This paper examines research in three main areas: electroencephalography (EEG), neuroscience, and consumer behavior. Its main purpose is to provide a basic knowledge of research on consumer neuroscience for marketers who find neuroscience methodology to be difficult and inaccessible. Chapter 1 describes EEG as a neuroimaging tool. In this chapter, I provide a general overview of EEG, including its historical background, strengths and weaknesses, prominent features, components, and equipment. Chapter 2 describes cognitive and neuropsychological approaches to the fundamental cognitive functions related to consumer behavior in which most marketers are interested. In this chapter, I discuss the main cognitive functions underlying information processing and decision-making as outlined in neuroscience research using EEG. Chapter 3 describes a practical approach to consumer neuroscience. In this chapter, I elaborate on how the results of studies on cognitive neuroscience can be utilized for marketing purposes and to conduct consumer neuroscience research using EEG. In the conclusion, I summarize the previous chapters and analyze the advantages and limitations of neuromarketing using EEG for future research, evaluating the value of EEG for use in consumer neurosciences research for business purposes. As neuroscience techniques have rapidly advanced, researchers in the psychological and physiological sciences have adopted neuroimaging methods to investigate brain and cognition in considerable depth (N Lee, Broderick, & Chamberlain, 2007). Then, neuroscience tools have been utilized in various consumer studies to improve our understanding of the market. It is known that 95 percent of thinking is unconscious, but conventional market research has focused on the conscious mind only, as no methods had been developed to capture unconscious thought. However, in recent years, neuroimaging has been developed, which allows researchers to observe brain activity, including the unconscious thoughts and feelings of consumers (Zaltman, 2003). Thus, the subdiscipline of consumer neuroscience known as neuromarketing was created. The unanswered questions of all marketers are, “How do consumers process information?” and, “What drives them to make certain choices?”. In response to these questions, the Neuromarketing Science and Business Association (NMSBA) was established to promote neuromarketing in the real business world. The official objectives of the NMSBA are to provide science-based resources and build an international network of neuromarketing researchers. Electroencephalography in Consumer Research - A cognitive psychological and neurological review of consumer research using EEG 4 Currently, this organization consists of members in 90 countries who attend an annual neuromarketing world forum. In recent years, major brands have partnered with members of the NMSBA to initiate practical attempts to converge marketing with neuroscience. For example, Porsche (Bell, 2015) and Coca Cola (Dooley, 2013) implemented neuroscience techniques to develop their products. Hyundai, Frito-Lay, Yahoo, and eBay briefly disclosed their applications of neuroscience as part of their marketing strategy and services in a Forbes interview (Burkitt, 2009). As more and more businesses began to explore the possibilities of neuromarketing, Nielsen, a global market research company, enthusiastically acquired neuromarketing startups like Neurofocus and Innerscope and organized an internal neuroscience research division (Dooley, 2015). Now, Nielsen provides an exclusive service evaluating TV advertisements with the combined measures of neurometrics, biometrics, facial coding, eye tracking, and self-report. According to Nielsen, their new service helps clients see a fuller picture of the consumer’s mind. In addition, papers and articles with a focus on consumer neuroscience have been published to compensate for the weaknesses of conventional marketing research methods. Traditionally, survey or focus group interview methods have been used to probe consumers’ minds, but these methods have the limitation that their results are easily distorted by external factors like culture, social norms, or even interviewers’ behaviors. Despite the time and effort involved, traditional research methods are inadequate to measure consumer thinking (Zaltman, 2003). Thus, researchers have recently been motivated to employ neuroscience methodology in consumer research. However, there are ethical concerns and skepticism about neuromarketing in general. This discipline is becoming more familiar as more studies are openly conducted according to the regulations of the NMSBA, but only a few companies have made their results public, and most are reluctant to reveal their neuromarketing applications. General criticism of neuromarketing may be found in the description of it as “finding a buying button in the brain”(Nick Lee et al., 2007), or the perception that it involves searching for ways to manipulate consumers subconsciously. Moreover, even marketing academics consider neuroscience and cognitive psychology as intimidating subjects due to their lack of experience with related techniques (Nick Lee et al., 2007). Better understanding of neuromarketing and its foundation is required to eliminate prejudice and alleviate growing concern. This paper particularly focuses on consumer neuroscience research in which EEG is employed. EEG is a technique that has been used since the initial stage of neuromarketing research and is still widely adopted by many researchers. In spite of its great accessibility and usability, its value has been underestimated because of its weakness in terms of spatial resolution and its inability to detect subcortical activations in the brain. However, its strengths in terms of Electroencephalography in Consumer Research - A cognitive psychological and neurological review of consumer research using EEG 5 temporal resolution and minimal cost make it appropriate for business applications, and its weaknesses can be complemented by high-density EEG systems. In this paper, an overview is provided of consumer neuroscience research using EEG that encourages marketers to use it. After reading this paper, readers will be more familiar with consumer neuroscience and EEG and the possibilities and advantages of combining these things in future research. Electroencephalography in Consumer Research - A cognitive psychological and neurological review of consumer research using EEG 6 Chapter 1 An Overview of Electroencephalography (EEG) The aim of this chapter is to provide a brief overview of EEG, including its historical background, advantages and disadvantages of using it in consumer research, classification of EEG and ERP, and how the EEG device works. This basic knowledge of EEG will help readers understand the concepts presented in the next chapter. Historical Background of EEG Communication between brain cells produces tiny amounts of electrical activity. EEG measures and records these potential changes in the brain. EEG originated from physiological experiments measuring electricity in the body as a whole, which was achieved by Luigi Galvani (1737 – 1798), who attempted to record electrical charges and muscle activity in living frog tissue. Like Galvani, the earliest scientists were initially interested in physiological potentials. Only later did scientists interest themselves in electrical activity in the brain. Richard Caton (1842 – 1926) measured electrical potentials in the brains of rabbits and monkeys, recording a frequency response from the surface of the gray matter. Then, in 1924, Hans Berger (1873 – 1941), the first electroencephalographer of the human brain, observed electrical charges in the cortex of a 17-year-old boy who was undergoing brain tumor surgery. After many tests, he invented scalp electrodes made of foil and tested them on his son Klaus and a 37-year-old volunteer. EEG records of decent quality were obtained, especially in the bald area of the volunteer’s head. Berger published the first report on human brain EEG in 1929 and continued to develop EEG recording devices and techniques. His contributions to experimental and clinical EEG are significant; subsequent
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