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Journal of J. Consumer Behav. 7: 272–292 (2008) Published online in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/cb.251

A current overview of consumer Mirja Hubert*,y and Peter Kenningy Zeppelin University, Am Seemooser Horn 20, 88045 Friedrichshafen, Germany

The emerging discipline of employs methods originally used in research for investigating economic problems, and furthers the advance of integrating neuroscientific findings into the economic sciences. or consumer neuro- science is a sub-area of neuroeconomics that addresses relevant problems with methods and insights from brain research. With the help of advanced techniques of , which are applied in the field of , a more direct view into the ‘‘black box’’ of the organism should be feasible. Consumer neuroscience, still in its infancy, should not be seen as a challenge to traditional consumer research, but constitutes a complementing advancement for further investigation of specific decision-making behavior. The key contribution of this paper is to suggest a distinct definition of consumer neuroscience as the scientific proceeding, and neuromarketing as the application of these findings within the scope of managerial practice. Furthermore, we aim to develop a foundational understanding of the field, moving away from the derisory assumption that consumer neuroscience is about locating the ‘‘buy button’’ in the brain. Against this background the goal of this paper is to present specific results of selected studies from this emerging discipline, classified according to traditional marketing-mix instruments such as product, price, communication, and policies, as well as research. The paper is completed by an overview of the most prominent brain structures relevant for consumer neuroscience, and a discussion of possible implications of these insights for economic theory and practice. Copyright # 2008 John Wiley & Sons, Ltd.

Introduction Camerer et al., 2005; Kenning and Plassmann, 2005; Singer and Fehr, 2005). Neuroeco- In recent years, interest in applying neuro- nomics employs methods originally used in scientific findings and methodologies to other brain research to investigate economic pro- disciplines has been increasing. The innovative blems, and further advances the integration of approach of neuroeconomics demonstrates neuroscientific findings into the economic that this development has been incorporated sciences. Although both economists and into economic research (Braeutigam, 2005; neurologists attempt to understand and pre- dict human behavior, they have used quite *Correspondence to: Mirja Hubert, Zeppelin University, different methods in the past. Whereas eco- Am Seemooser Horn 20, 88045 Friedrichshafen, Germany. E-mail: [email protected] nomic research has tried to explain behavior yChair of Marketing. through observational data and theoretical

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb A current overview of consumer neuroscience 273 constructs such as utility or preferences, The determination of cortical areas that are neurology contemplates the physiological stimulated during consumer decision proces- elements and somatic variables that influence sing is important for various reasons. First, the behavior. Neuroeconomics, which evolved approach of consumer neuroscience enables from the combination of both disciplines, the researcher to reassess existing theories that proposes an interdisciplinary approach and theoretically assume different brain mechan- specifically examines the neural correlates of isms (e.g., hemisphere theory) by investigating decision-making (Sanfey et al., 2006). Market- the actual brain activations. Beyond this, the ing research has discovered neuroscience as observation of the total brain has the potential well. Neuromarketing or consumer neuro- to yield new, unpredictable results, and science is a sub-area of neuroeconomics that enhances the explorative character of con- addresses marketing relevant problems with sumer neuroscience. This contrasts measuring methods and insights from brain research the brain activity by recording only one signal, (Fugate, 2007; Lee et al., 2007). as it is used, for example, in EDR or eye Classical consumer research has seen the tracking, which can be compared to an effort human organism figuratively as a ‘‘black box,’’ to capture the musical sounds of an orchestra into which investigators could not gain direct by measuring only the noise level (Kenning insights. Instead, they had to use theoretical et al., 2007a). Third, concerning the empirical constructs in order to explain human behavior. data ascertainment, the observation of brain In this sense, the stimulus–organism–response activity can offer another, and more objective, model, which originated in neo-behaviorism, perspective: self-assessment methods that rely explains the initiation of behavior by a totally on the ability of the respondent to controlled stimulus (e.g., price) or an uncon- describe and reconstruct feelings and thoughts trolled stimulus (e.g., weather). The still are very subjective. Many effects in the human unobservable processing of this stimulus inside organism that influence behavior are not the organism is then related to the resulting perceived consciously; hence, the cognitive observable reaction (e.g., purchase) (Howard filter of the test taker may bias the results. For and Sheth, 1969). Examinations of the pro- example, a person who has a temperature may cesses inside the human organism are based on determine that his body feels cold, even established indirect methods such as electro- though the objective measurement of a clinical dermal response (EDR) measurement, pupillo- thermometer indicates that it is not. Fourth, graphy, and, most common, self-assessment strategic behavior and social desirability, methods (Bagozzi, 1991; Groeppel-Klein, which can confound findings of self-assess- 2005). A more direct view into the black ment methods, can be eliminated, given that box of the organism should be feasible with the the participating subjects have little to no help of advanced techniques and methods of influence on the measurement of their brain brain research that are now applied in the field activity (Camerer et al., 2005). A last, but very of consumer neuroscience (Kenning et al., important, advantage of determining the 2007a). Even though the application of cortical stimulation is the simultaneousness neurobiological methods such as electroence- of measurement and experiment. Some pro- phalography (EEG) is not new in marketing cesses might not be stable over time, making it research, the direct observation of the reac- very difficult for researcher and participant to tions within the brain that is now available reconstruct them ex-post (Lee et al., 2007). through the use of steadily improving methods As a consequence of these advantages, the of imaging techniques, for example, positron crossing of the own disciplinary boundaries emission tomography (PET) or functional and the consideration of all aspects that magnetic resonance imaging (fMRI), is provid- determine decision-making can help consumer ing a completely different perspective (Plas- researchers and social scientists to more fully smann et al., 2007a). understand human behavior (Zaltman, 2000).

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb 274 Mirja Hubert and Peter Kenning

With better comprehension and steadily area code for neuroscience. Furthermore, improving methods, it may be possible to ‘‘googling’’ the term ‘‘neuromarketing’’ cur- derive new theories for rently yields more than 800 000 hits, which and to arrive at a higher level of explained establishes the field’s move into the main- variance (Knutson et al., 2007). This may in stream of research (Figure 1). turn help to improve companies’ actions, for Against the background of the embryonic example, marketing responses that are based nature of the field, a key contribution of this on a better satisfaction of unconscious emo- paper is to suggest a distinct definition of tional consumer needs. However, consumer neuromarketing and consumer neuroscience. neuroscience is still in its infancy and should The term ‘‘consumer neuroscience’’ com- not be seen as a challenge to traditional prises the scientific proceeding of this research consumer research. Rather, it constitutes a approach, and ‘‘neuromarketing’’ designates complementing advancement for further investi- the application of the findings from consumer gation of specific decision-making behavior. neuroscience within the scope of managerial The increasing relevance of this area of practice. Because of the way the terms are research is indicated by the growing interest of applied in the existing literature, and to science and practice (Fugate, 2007; Lee et al., prevent misunderstandings, both terms are 2007; Plassmann et al., 2007a). For example, still used synonymously in the following. numerous conferences, calls for papers from Furthermore, we aim to develop a definitive prominent scientific journals, and calls for foundation, moving away from the derisory research by institutes such as the Marketing assumption that consumer neuroscience is Science Institute, the Institute for the Study of used for locating the ‘‘buy button’’ in the brain Business Markets (Lee et al., 2007), and the (Blakeslee, 2004). In order to achieve our goal, World Research Centre focus on this paper discusses a wide scope of marketing- this subject. The Association of Consumer mix instruments and addresses the question Research even implemented a new content of the extent to which the application of

Figure 1. Development of google hits on neuromarketing 2003–2007.

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb A current overview of consumer neuroscience 275 neuroscientific methods can help to identify product. For example, self-reports are fre- the cortical areas that drive consumer be- quently in contrast to the actual inner states of havior. We attempt to connect consumer the subjects, because people are generally not research and neuroscience in order to provide able to reconstruct and interpret their a better understanding of current proceedings thoughts and feelings retrospectively (Bagozzi, in neuromarketing. 1991). In this area, consumer neuroscience can yield a more complete and objective understanding of consumer’s desires, and Neurally reconstructing the may consequently assist companies to adjust marketing mix — overview of their strategies. selected studies One important aspect of product policy is In order to show the close alliance between the optimal design of a product according to consumer neuroscience and established mar- the preferences of the customer (Bloch, 1995). ket research, we present here specific results The investigations by Erk et al. (2002) and implications of selected exemplary studies provided the first central insights into how from this recent field of research. The selection the brain processes differently designed goods takes into account whether or not the study (e.g., sports cars, limousines, and small cars). was related to marketing issues. Regarding Their fMRI results showed that reward-related content, the overview is structured according brain areas are activated by objects that have to traditional marketing-mix instruments such gained a reputation as status symbols through as product, price, communication, and distri- cultural conditioning signaling wealth and bution policies, as well as brand research, social . In relation to the perceived because they represent predominant and attractiveness of the products, pictures of the essential elements of marketing theory and cars in their study led to activation in the left operational (Winer, anterior cingulate, the left orbitofrontal, and 1986; Constantinides, 2006). In this connec- bilateral , as well as in the tion, neural activation patterns evoked by right ventral . According to the present stimuli of each mix instrument and branding standard of knowledge, these regions are research are identified. Additionally, Table 1 associated with motivation, the encoding of offers a graphical overview of selected studies rewarding stimuli, the prediction of rewards, in consumer neuroscience. and decision-making (Bechara et al., 2000; O’Doherty, 2004). A very interesting finding for the optimal design of a product is the measured activation in the ventral striatum in Product policy which the is located: The Product policy is also called the ‘‘heart of more attractive the subject perceived a car to marketing,’’ as it includes all decisions that a be, the stronger the detected activation. company makes regarding the market-driven Hence, the most intense average activation composition of its offered services (Kotler and signal was measured when the subjects looked Keller, 2006). It is an essential element of at sports cars, followed by limousines, and successful corporate policy, because a product then small cars. Erk et al. (2002) reasoned that range that satisfies the needs, demands, and the relative activation in the ventral striatum problems of the customer can be the key for can be seen as an indicator for how attractive a sustainable corporate success (Cooper, 1979; visual stimulus (i.e., product design or shape) Selnes, 1993; Anderson et al., 1994; Bailetti is evaluated to be. Assuming that there is a and Litva, 1995). However, the application of relation between product design and purchase conventional methods such as decision, we can hypothesize that activity self-reports often does not yield the desired changes in the of the brain information about consumers’ real opinion of a induced by an attractive product design can

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb Copyright Kenning Peter and Hubert Mirja 276 Table 1. Overview of selected studies in alphabetical order

Study Subject Problem Method Experimental set-up N Results # 08Jh ie os Ltd. Sons, & Wiley John 2008 Ambler et al., Communication What impact does affective MEG The subjects watched n ¼ 3 - Cognitive pictures: stronger 2000 policy advertisement have on different commercials activation in posterior the neural activity in with either affective parietal areas and in the comparison with cognitive or cognitive content superior prefrontal advertisement? cortex ! stronger use of working - Affective pictures: activation in the areas of the ventromedial prefrontal cortex (VMPFC), the and the brain stem ! processing of emotional stimuli Deppe et al., Distribution Is it possible to find the fMRI Evaluation of the n ¼ 21 - If the newspaper brand had

ora fCnue eaiu,Jl–coe 2008 July–October Behaviour, Consumer of Journal 2005a policy ‘‘framing effect’’ on credibility of fictive a strong impact on the a neural basis? headlines that are judgment of the person, combined with a strong activation in the different newspaper VMPFC was measured ! logos integration of implicit framing information in the decision-making process Deppe et al., Brand research What are the neural correlates fMRI Binary decisions between n ¼ 22 Only the favorite brand is able 2005b of brand choice? ‘‘target’’ brand and to emotionalize the decision diverse brand making process. First choice lead to a deactivation in areas that are associated with analytical processes and to activation in areas that are associated with O:10.1002/cb DOI: integrating in the decision-making process Table 1. Overview of selected studies in alphabetical order

Copyright Study Subject Problem Method Experimental set-up 277 N Results neuroscience consumer of overview current A

Deppe et al., Distribution What influence does the fMRI Evaluation of the n ¼ 21 If the newspaper brand had a 2007 policy ‘‘framing effect’’ have on attractiveness of strong impact on the judgment # neural activation in case of print ads that are of the person, a strong

08Jh ie os Ltd. Sons, & Wiley John 2008 intuitive decisions? combined with activation in the anterior different newspaper cingulate cortex was logos measured ! evaluation of the relevance of the framing stimulus Erk et al., Product policy Is there a neural representation fMRI Ranking of attractiveness n ¼ 12 Products that symbolize wealth 2002 of product attractiveness? of sports cars, limousines, and prestige lead to a higher and small cars with activation in areas that are scanner and questionnaire associated with the perception of rewards Kenning et al., Communication Can the perceived attractiveness fMRI The subjects had to evaluate n ¼ 22 Attractive ads lead to a stronger 2007b policy of an advertisement be different advertisements activation in associated with specific by their attractiveness - The VMPFC ! integration neural activations? while their brain of emotions in the activity was measured decision-making process

ora fCnue eaiu,Jl–coe 2008 July–October Behaviour, Consumer of Journal - Nucleus accumbens ! attractive ads can work as reward stimulus Knutson et al., Price policy Which impact does the price fMRI While measuring their brain n ¼ 26 - Activation in the nucleus 2007 have on product activity, products with accumbens correlates preferences and corresponding price with product preferences neural activity? information were - The activation of the insula presented to the subject. cortex is evoked by In the end they had to high prices make a buying decision - The medial prefrontal cortex (MPFC) reacts to reduced prices ! prices can be perceived differently and can evoke different neural reactions. O:10.1002/cb DOI: (Continues) Copyright Kenning Peter and Hubert Mirja 278 Table 1. (Continued)

Study Subject Problem Method Experimental set-up N Results # 08Jh ie os Ltd. Sons, & Wiley John 2008 Koenigs and Brand research Is it possible to receive the Lesion-study In order to test the Groups The results from McClure et al. Tranel, same results as McClure ‘‘Pepsi-paradox’’ (people 1. n ¼ 16 2004a could be validated: 2007 et al. 2004a, through the prefer Pepsi in blind tests, 2. n ¼ 16 - Only persons with lesions observation of people with but Coca Cola if they 3. n ¼ 12 in the VMPFC did not show lesions in the MPFC? know the brand), three preference bias when groups were formed and exposed to brand information the taste test from McClure - The other groups were et al. 2004a was repeated, susceptible to brand this time without the fMRI information Scanner: - The results show that the 1. Healthy subjects VMPFC seem to play a key 2. Subjects with lesions role in developing brand not including the preferences VMPFC 3. Subjects with lesion ora fCnue eaiu,Jl–coe 2008 July–October Behaviour, Consumer of Journal in the VMPFC McClure et al., Brand research What effect does brand fMRI Anonymous and semi- n ¼ 67 - The VMPFC evaluates 2004a information have on the anonymous taste tests of sensory information sensory perception of Coca Cola and Pepsi inside - Through the cooperation with similar products and outside the scanner the dorsolateral prefrontal (Coca Cola/Pepsi)? cortex and the , and cultural information (e.g., brand knowledge) are integrated in the decision-making process Plassmann Brand research What are the neural correlates fMRI Subjects participated in a n ¼ 15 - ‘‘First brand effect’’ was et al., 2005 of brand choice under risk? brand choice task where confirmed they had to choose - More prominent activation of between 16 travel brands the MPFC when the subject to a risky and a less faced risky decisions. O:10.1002/cb DOI: risky destination - Integration of emotions in the decision-making process of particular importance in risky decision-making Copyright 279 neuroscience consumer of overview current A

Table 1. (Continued) #

08Jh ie os Ltd. Sons, & Wiley John 2008 Study Subject Problem Method Experimental set-up N Results

Plassmann Distribution What are the neural correlates fMRI The subjects had to decide n ¼ 22 - Loyal customers probably et al., 2007b policy of brand loyalty? from which brand they integrate emotions more would prefer to buy a certain intensively in the garment. In addition to decision-making process measuring their brain - For loyal customers the activity, data about their favorite brand can be a buying behavior were rewarding stimulus collected Plassmann Price policy Is there a neural correlate for fMRI They presented hungry n ¼ 19 - The medial orbitofrontal et al., 2007d the individual willingness subjects food, while cortex plays probably a to pay? measuring their brain key role for computing the activity. The participants individual willingness to pay ora fCnue eaiu,Jl–coe 2008 July–October Behaviour, Consumer of Journal had to evaluate their - The DLPFC encodes the individual willingness to pay final decision and is responsible for the motor signal (key press) Plassmann Price policy Is a high price able to change fMRI The subjects tasted different n ¼ 20 A high price led to a better et al., 2007e the experienced utility and kinds of wine with the evaluation of the taste and to the corresponding neural explicit price information, a change in the neural activity activity? while their brain activity in the MPFC and in the rostral was measured anterior cingulate cortex Rossiter and Communication Is it possible to derive how EEG The subjects watched different n ¼ 35 Scenes that evoked a fast Silberstein, 2001 policy well ads are remembered commercials and were asked response in the left from neural activation which single scenes they hemisphere were better pattern? remembered remembered

O:10.1002/cb DOI: (Continues) Copyright Kenning Peter and Hubert Mirja 280 Table 1. (Continued)

Study Subject Problem Method Experimental set-up N Results # 08Jh ie os Ltd. Sons, & Wiley John 2008 Schaefer Brand research What are the neural correlates fMRI The researchers presented n ¼ 13 - Significant activations in the et al., 2006 of brand knowledge? subjects cultural familiar and MPFC were found, when the cultural unfamiliar logos of subjects were exposed to car manufactures and asked familiar brand information them to imagine themselves ! confirmation of the driving the car importance of this brain region for the processing of culturally based brands - Brands might function as subconscious presentiments that influence the decision- making process, before the participants even started thinking about advantages and disadvantages of ora fCnue eaiu,Jl–coe 2008 July–October Behaviour, Consumer of Journal the cars Yoon et al., Brand research Do persons build up a fMRI Participants were scanned while n ¼ 25 Characterization of persons leads 2006 connection to a brand that making judgments about to a stronger activation in resembles a social whether a trait adjective the MPFC in comparison to relationship? described a target cue the characterization of brands (products and persons) For the evaluation of product attributes a stronger activation in object related brain areas was measured ! the concept of ‘‘brand personality’’ has to be revised because it is not possible to transfer humanlike attributes to brands in an unlimited way O:10.1002/cb DOI: A current overview of consumer neuroscience 281 partly be applied in order to predict purchas- information. In the end they had to decide ing behavior. Knutson et al. (2007) supported whether or not to buy the product. The results these findings: results from their study pro- resembled those of studies examining the vided evidence that activation of the nucleus neural correlates of anticipation and the accumbens correlates with individual product receipt of gains (Breiter et al., 2001; Knutson preferences and that activation in this area and Peterson, 2005) and losses (Sanfey et al., during product presentation may at least partly 2003). Hence, the activation of the nucleus predict subsequent purchasing decision. accumbens (activation through the anticip- ation of gains) correlates with product pre- ferences, the activation of the insula (acti- vation through the anticipation of losses) with Price policy high prices, and the activation of the medial Price policy is a central concept in marketing prefrontal cortex (activation through the because it constitutes a basic influencing factor processing of gains and losses) with reduced of the company’s sales result and profits (Rao, prices. This result supports the speculation 1984; Pasternack, 1985; Gabor and Granger, that activity changes in the insula might reflect 1979; Lichtenstein et al., 1993). Particularly in the perception of a loss and, thus, the neural saturated markets, this marketing-mix instru- representation of a negative price effect. In the ment has gained greater importance. A very future this information can be important, for interesting phenomenon often observed in example, in the identification of price limits. price policy is that a similar price level can be A more recent study from Plassmann et al. perceived by the buyer in two different ways, (2008) examined the opposite positive skew- depending on diverse product categories. On ing impact of price setting on the evaluation of the one hand, high prices can deter customers a specific product. In their fMRI experiment, from buying a product because those prices subjects consumed wine that was presented are perceived as a loss. On the other hand, high with explicit price information. The results prices can be seen as an indicator for high showed, among other things, that the persons quality, and can enhance the product value and not only evaluated the more expensive wine as the probability that the customers will buy the being better, but also that the neural activation goods (Lichtenstein et al., 1993; Vo¨lckner, — in the medial prefrontal cortex and in the 2007). This holds particularly true when rostral anterior cingulate cortex — indicated customers have uncertainty about buying a significant activation differences in relation to product, because they are not familiar with it, higher price information. Based on these yet. However, asking consumers about results, Plassmann et al. (2008) assumed that issues can sometimes be ineffective. For the experienced utility of a product is not only instance, consumers are often not able to dependent on intrinsic aspects such as the prices (Vanhuele and Dre`ze, 2002; composition of the wine or thirst, but it is also Evanschitzky et al., 2004), and it is very impacted by other adjustable factors within the difficult for them to specify abstract economic frame of marketing-mix instruments such as concepts like the ‘‘willingness to pay’’ or price setting. experienced utility. In addition, they might Another important issue in price policy is respond strategically when asked about con- the high degree of wasted opportunities for structs like price fairness. customization. It can be very profitable for Against this background, Knutson et al. firms with heterogeneous customer segments (2007) examined the neural correlates of the to charge individual prices according to the negative price effect. While lying in the fMRI value that different customers place on a scanner, subjects had to solve an exercise in product. For the adjustment of prices at the which they first saw a product, and then saw right level, it is necessary to know how people the same paper with its corresponding price compute their individual ‘‘willingness to pay’’

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb 282 Mirja Hubert and Peter Kenning

— the maximum price that a buyer is willing to the studies revealed that positive facial pay for a specific object (Simon and Dolan, expressions are an essential component of 1998). As mentioned above, the determination attractive advertisements. A possible expla- of this abstract concept is very difficult with nation for this is provided by Aharon et al. existing research methods. Recently, in an (2001), who showed that beautiful female fMRI study from Plassmann et al. (2007d), faces led to the activation of reward-related hungry subjects were scanned while different areas in the of heterosexual males. edibles were presented. The task was to Future studies may provide further information propose a specific amount of money that about the effect of typical ad stimuli such as the suited the subject’s personal ‘‘willingness to schemes of childlike characteristics or pup- pay.’’ The data showed that the medial pies. prefrontal cortex is likely to play an active Referring to the long-term memorization of role in computing the maximal acceptable brand information, two exploratory exper- price. The dorsolateral prefrontal cortex codes iments conducted by Ambler and Burne (1999) the final decision and seems to be essential for and Ambler et al. (2000) showed that an the motor signal (e.g., the push of a button, or advertisement is remembered better if it is buying). connected with emotional images, in compari- son to use of exclusively rational arguments. In a preliminary pharmacological study (Ambler and Burne, 1999), b-blockers (propranolol) Communication policy and placebos were randomly dispensed to the Besides products and prices, communication participants, who were than asked to watch plays an increasingly decisive role in market- brand advertising. b-blockers are defined as a ing. In the future, one important challenge for class of drugs that block specific receptors this marketing-mix instrument is the psycho- and hence inhibit the effect of certain stress logical differentiation of brands (Milgrom and hormones (www.texasheartinstitute.org, 4.3. Roberts, 1986; Meenaghan, 1995). We assume 2008). Ambler and Burne (1999) used this class that, especially within communication policy, of medication because it is noted to reduce consumer neuroscience can help to bridge the affective responses to stimuli, which would existing lack of theory (Pitt et al., 2005). The enhance their goal of examining the effect of question of how the brain processes and stores emotions on the recall and recognition of advertising stimuli may have essential import- advertising. Results showed that the suppres- ance. sion of emotions due to the pharmacological Regarding the short-term processing of treatment had an effect on recall and recog- advertisements, two studies by Kenning nition of ads. The placebo and control group et al. (2007b) and Plassmann et al. (2007c) that did not receive b-blockers showed a dealt with the neural correlates of attractive higher recall and recognition rate of affective advertisements. Brain activity of subjects was ads, in comparison to cognitive ads. In measured by an fMRI scanner while they rated contrast, subjects from the b-blocker group different advertisements according to their did not show similar effects. The participants attractiveness. The data showed that an treated pharmacologically, in fact, remem- advertisement that was rated as attractive led bered the cognitive ads better than the to activation in brain areas associated with the emotional ads. Within the main experiment, integration of emotions in the decision-making Ambler et al. (2000) applied magnetoence- process (ventromedial prefrontal cortex) and phalography (MEG) to prove that cognitive the perception of rewards (ventral striatum/ pictures cause a stronger activation in nucleus accumbens). Kenning et al. (2007b) posterior parietal areas and in the superior concluded from these results that attractive ads prefrontal cortex, which may be traced to a can act as a rewarding stimulus. In addition, more intense use of working memory. After

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb A current overview of consumer neuroscience 283 presenting the more affective images, a customers’’). The analysis of the data showed significant activation was observable in the that loyal customers integrate emotions into areas of ventromedial prefrontal and orbito- the decision-making process in a more intense frontal cortex, as well as in the amygdala and way (activation in the ventromedial prefrontal the brain stem. cortex), and that the favorite brand can act as a behaviorally relevant rewarding stimulus. In contrast, this activation was not measurable for disloyal participants. Plassmann et al. (2007b) Distribution policy concluded from their results that the use of The distribution policy comprises all decisions emotional reinforcers in marketing can con- concerning the optimal distribution of goods stitute the base for long-term customer reten- between manufacturer and retailer. The tion. Through a learning process, positive optimal distribution of products can have a experiences are combined with the retail prominent influence on the buying decisions brand, then stored in the memory of the of customers (Ailawadi and Keller, 2004; customer and recalled for buying decisions. Kotler and Keller, 2006). Therefore, a central aspect of this important marketing-mix instru- ment is the choice of product- and brand- Brand research adequate marketing channels, in order to define the optimal frame for the presentation The field of brand research is concerned with of a brand (Pasternack, 1985; Eliashberg and examining the important influence of brand Steinberg, 1987; Choi, 1991; Lee and Staelin, information on decision-making (Ailawadi and 1997). In two similarly constructed studies, Keller, 2004). One central topic of brand Deppe et al. (2005a, 2007) examined the research is whether or not consumer decisions neural correlates of this ‘‘framing effect.’’ A are influenced by brand information. Deppe main finding of their investigations was that et al. (2005b) addressed this question in a the medial prefrontal cortex and the anterior study designed to determine which neural cingulate cortex, in particular, play a central processes are involved in the brain during the role for the integration of implicit framing processing of brand information. In their fMRI information, for example, the importance of study, subjects had to make fictitious buying emotions and unconscious memories in the decisions between two very similar products decision-making process. that were differentiated only by brand infor- In a similar vein, Plassmann et al. (2007b) mation. In one part of the study, subjects had identified the neural correlates of retail brand to choose between the brand with the greatest loyalty. In their fMRI study, subjects had to market share — which had been declared as choose between retail brands from which they the target (‘‘T’’) brand in the preliminary would prefer to buy an identical garment. With phase — and diverse (‘‘D’’) brands (TD the help of previously collected information decisions). In the next part of the study, they about the buying behavior of the subjects, the had to decide between two diverse brands (DD researchers were able to identify the favorite decisions). The data analysis showed a signifi- retail brand of the participants. Furthermore, a cant difference in brain activity between TD division into two groups was possible, and was and DD decisions, if the subjects had declared made according to the previous average buying the target brand as their preferred brand (first behavior of the subjects. Group A spent a choice brand, FCB group) in the pretest phase. minimum of 250s on five or more shopping A closer look into the brain activities of the FCB days per month at a certain retailer (so-called group showed a reduced activity in the ‘‘loyal customers’’), Group C spent a maximum dorsolateral prefrontal cortex, left premotor of 50s and had only one shopping day per area, posterior parietal, and occipital cortices month at the same retailer (so-called ‘‘disloyal — areas that are generally associated with

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb 284 Mirja Hubert and Peter Kenning working memory, planning, and logic de- of the medial prefrontal cortex when the cisions. Deppe et al. (2005b) assumed that subject faced risky decisions. Plassmann et al. for decisions comprising the favorite brand of (2005) reasoned that the integration of the consumer, strategic processes are no emotions in the decision-making process, as longer as relevant. The responsible brain opposed to analytical decision strategies, is of region is deactivated and a ‘‘cortical release’’ particular importance in risky decision-mak- occurs (Kenning et al., 2002). In contrast, an ing. One potential reason for this might be that increased activity was measured in the ventro- emotions could provide additional conscious medial prefrontal cortex, the inferior precu- or unconscious information. neus, and the posterior cingulate cortex. These Analogous to the studies mentioned, Schae- areas operate as association cortices and have fer et al. (2006) confirmed the reported important functions in combining incoming importance of the medial prefrontal cortex information with background knowledge, the for decision-making influenced by brand infor- recall of episodic memories, and self-reflection. mation (Plassmann et al., 2005; Deppe et al., The increased activation in the ventromedial 2005b). Schaefer et al. (2006) presented their prefrontal cortex during decisions in the FCB subjects with culturally familiar and unfamiliar group could be interpreted as integration of logos of automobile manufacturers, and asked emotions into the decision-making process them to imagine themselves driving the car. If (Bechara and Damasio, 2005). Thus, the results they did not know the car manufacturer, revealed a so-called ‘‘winner-take-all’’ effect: participants were instructed to imagine a only the favorite brand of the subject is able to generic car. Interestingly, Schaefer et al. emotionalize the decision-making process. (2006) found significant activity changes in This finding is crucial for marketing research the medial prefrontal cortex when the subjects because it is contrary to the well-established were exposed to familiar brand information, a consideration-set concept. Whereas the con- result that confirms the importance of this sideration-set theory assumes that there is set brain region for the processing of culturally of goal-satisfying alternatives (Shocker et al., based brands. Because the medial prefrontal 1991), the results of Deppe et al. (2005b) cortex is often associated with self-reflection provide evidence that only the favorite brand is and self-relevant information processing, able to trigger significant cortical activation Schaefer et al. (2006) concluded that the pattern. Intriguingly, a lesion study conducted imagination of driving a familiar car led to self- by Koenigs and Tranel (2007) confirmed the relevant thoughts. Furthermore, the results suggestions of Deppe et al. (2005b). Persons suggested that brands might function as with damage within the ventromedial prefrontal subconscious presentiments that influenced cortex that exhibit irregularities in emotional the decision-making process even before the processing did not show the normal preference participants began thinking about advantages biaseswhenexposedtobrandinformation. and disadvantages of the cars. This suggestion Plassmann et al. (2005) provided additional is supported, to some degreed, by Deppe et al. support for the investigated ‘‘first choice brand (2007) and their investigations of the neural effect.’’ Their study aimed to explain the processing of magazine brands. influence of brand information within uncer- Another abstract and implemented concept tain situations, by investigating the role of the within the framework of brand research is prefrontal cortex during decision-making ‘‘brand personality’’ (Aaker, 1997). Advertising under risk. The subjects participated in a often applies this construct by using product brand choice task where they had to choose descriptions that correspond to humanlike between sixteen travel brands, for travel to a traits (e.g., Henkel: ‘‘a brand like a friend’’). For risky and a less risky destination. In addition to example, it is possible to describe both a friend the ‘‘first choice brand effect,’’ the data and a car as ‘‘reliable.’’ Yoon et al. (2006) analysis exhibited a more prominent activation examined the concept of ‘‘brand personality’’

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb A current overview of consumer neuroscience 285 by addressing the question of whether the on learned expectations, context, time dimen- brain processes semantic judgments about sions, and reward amplitude (McClure et al., objects and persons in different ways. Their 2004b). Brain structures that are involved in data analysis revealed that the characterization processing rewards are often summarized by of persons leads to a stronger activation in the the term ‘‘reward system.’’ This complex medial prefrontal cortex, compared to the network of different brain areas plays an characterization of brands. For the evaluation important role for the understanding of of product attributes, a stronger activation in consumer behavior. By evaluating the stimulus object-related brain areas, such as the left value and by predicting when a certain stimuli inferior prefrontal cortex, was measured. will occur, the reward system seems to be These results might be crucial for marketing concerned with seeking out rewards and research and , as they evading punishments (O’Doherty, 2004). In support a conclusion that it is not possible general, the reward system is seen as a to transfer human-like attributes to brands in complex evaluation system that drives particu- an unlimited way. This observation is also larly goal-directed behavior and corresponds to supported by the phenomenon that subjects a closely linked network of different brain reveal higher rates of missing values when the structures with various functions such as the ‘‘brand personality’’ scales are applied to ventral striatum/nucleus accumbens, the orbi- unfamiliar brands. tofrontal cortex, and the amygdala (McClure et al., 2004b; Sanfey, 2007). Recent findings show that the reward system can be activated Prominent brain structures for not only by primary rewards such as food, water, and sexual stimuli, but also through consumer neuroscience attractive advertisement (Kenning et al., The discussed studies show that consumer 2007b), price reductions (Knutson et al., neuroscience has already localized important 2007), beautiful faces (Aharon et al., 2001), brain structures associated with the processing or status symbols such as sports cars (Erk et al., of products, prices, advertisements, and 2002). The reward system also seems to be (retail) brands. However, it is crucial to use involved in the development of product caution for the interpretation of neural preferences and brand loyalty (Plassmann activation patterns, because the activation of et al., 2007b). a specific area can mean different things The nucleus accumbens, a component of depending on the context (Sanfey, 2007). the ventral striatum, belongs to the mesolimbic Accordingly, one aim of this paper is to enable dopamine system that is often associated with consumer researchers to better understand the the pursuit of pleasure. Erk et al. (2002) and functionality of the brain. To achieve this goal, Knutson et al. (2007) point out that the the following summary of the discussed brain nucleus accumbens is involved in the for- structures is organized as follows. First, the mation of product preferences, because its construct of interest is described. Next, the activity scales with the evaluation of a stimulus. delineation of marketing stimuli that can Therefore, recent findings often connect the this variable is detailed, followed by a brief nucleus accumbens with the anticipation and depiction of the brain structures associated prediction of rewards (McClure et al., 2004b; with the construct of interest. Sanfey, 2007; Plassmann et al., 2007b). The evaluation of the rewarding aspects of incoming stimuli is primarily assigned to the Reward (O’Doherty, 2004). The studies conducted by Erk et al. (2002) and The encoding of rewards as stimuli that Ambler et al. (2000) demonstrate the import- positively reinforce behavior is dependent ance of the orbitofrontal cortex for the

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb 286 Mirja Hubert and Peter Kenning evaluation of incoming stimuli such as attrac- amygdala with the perception of fear or tive cars or emotional ads. Due to its close negative emotions (McClure et al., 2004b). connection with numerous brain structures Today, it is assumed that both rewarding and and its capability to memorize the reward value aversive stimuli can lead to an activation of the of sensory stimuli, the orbitofrontal cortex amygdala, depending on the strength of might play an important role for the processing arousal and the intensity of a stimulus of rewards and the emergence of behavior (O’Doherty, 2004; McClure et al., 2004b). (O’Doherty, 2004; McClure et al., 2004b). A structure that is primarily associated with Another important structure of the reward the processing of aversive stimuli is the insula system might be the amygdala. In contrast to cortex. Again, its functions are to a large extent the orbitofrontal cortex, which seems to still unexplored, but the insula cortex seems to encode for the valence of a stimulus, the be involved in the anticipation of losses (e.g., activation of the amygdala may indicate the processing of high prices; Knutson et al., perceived strength of arousal of an incoming 2007) and the perception of unfair offers stimulus (McClure et al., 2004b). (Sanfey et al., 2003).

Punishment Decision-making An additional issue of interest is the encoding Decision-making can be described as the of punishment in the . Punishing evaluation of a situation and the choice of an stimuli are defined as incentives that lead to appropriate action. For consumer research, the avoidance behavior, in the sense that people understanding of this decision-making process expend energy in order to evade them is very important, because consumers have to (Seymore et al., 2007). Primary stimuli that make specific decisions, for example, for a induce punishment are, for example, physical brand, in almost every shopping situation. , aversive odors/tastes, or disgust. Even though a strict distinction of the different Recent studies from consumer neuroscience mechanisms behind the decision-making pro- and neuroeconomics discovered that these cess is not possible, there are three crucial neural mechanisms can also be activated by aspects for a certain choice: the evaluation of relevant economic stimuli such as the percep- an incoming stimulus, rational consideration, tion of unfair offers, monetary losses, and high and the emotional component (Bechara and prices (Sanfey et al., 2003; Knutson et al., Damasio, 2005). 2007). The prefrontal cortex is a very important Brain structures involved in the processing brain structure linked to decision-making of punishment are, among others, the orbito- (Ridderinkhof et al., 2004). In addition to its frontal cortex, the amygdala, and the insula interaction with emotional structures in the cortex. Although their functions are not fully rewarding/punishment system, this brain area understood, these areas seem to correspond to plays a key role in consumer decision-making the reward system, and it is not possible to (Wood and Grafman, 2003; Bechara and accurately delineate the reward and the Damasio, 2005). The prefrontal cortex can punishment system. For example, the orbito- be divided into three parts that appear to fulfill frontal cortex not only encodes the rewarding different functions: the orbitofrontal cortex, value but also the negative value of an the ventromedial cortex, and the dorsolateral incoming stimulus. Another example for an cortex. area that seems to be involved in both systems As already mentioned above, the orbitofron- is the amygdala, because aversive stimuli can tal cortex is closely connected to the reward/ lead to activation in this area as well. In fact, punishment system and is often associated earlier studies predominantly associated the with the evaluation of an incoming stimulus.

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb A current overview of consumer neuroscience 287

The dorsolateral part of the prefrontal cortex is researchers hope to gain specific new insights primarily involved in cognitive actions. Inter- into unconscious and automatic processes that estingly, its activation can be reduced if influence human behavior. Second, neuroeco- consumers have to make decisions that nomics and consumer neuroscience emerged comprise their favorite brand (Deppe et al., from the consolidation of economics and 2005b). On the other hand, the dorsolateral neuroscience. This transdisciplinary approach prefrontal cortex is very important for rational may assist both disciplines to gain innovative decision-making such as estimating the ‘‘will- perspectives and to generate new ideas. From ingness to pay’’ (Plassmann et al., 2007d). The this, it follows that consumer neuroscience can ventromedial part of the prefrontal cortex confirm, reconfigure, or improve conventional might be crucial for the integration of emotions theories of marketing theory (Fugate, 2007). In in the decision-making process, due to its close this regard, one important contribution of connection to the amygdala and the hippo- consumer neuroscience is the emphasis on campus (Wood and Grafman, 2003). The emotions and their influence on consumer studies of Ambler et al. (2000), Deppe et al. decision-making. Consumers are no longer (Deppe et al., 2005a,b), Kenning et al. considered as completely rational, because (2007b), and Plassmann et al. (2007b) indicate emotions, unconscious and automatic pro- that the ventromedial prefrontal cortex is not cesses, play a central role in generating only associated with the processing of attrac- behavior (Bechara and Damasio, 2005; tive and affective images, but that it is also Camerer et al., 2005). The strict distinction relevant for building up product preferences between marketing-mix instruments is another and brand loyalty. Furthermore, activation in example that can be derived from the studies the ventromedial prefrontal cortex can be an presented. The studies on ‘‘framing effect’’ indicator of how easily people are influenced (Deppe et al., 2005a, 2007) yield important by brand information, and thus can be insights not only for distribution policy, but interpreted as the individual ‘‘framing effect.’’ also for communication policy. In fact, there is Interestingly, brain damage in this area leads to a strong interaction between the classical less susceptibility to brands (Koenigs and marketing-mix instruments because the con- Tranel, 2007). sumer perceives all elements simultaneously (Plassmann et al., 2008). Therefore, a possible implication could be a new conceptualization Conclusion of this approach. By giving a general overview of the current However, consumer neuroscience is still in state of consumer neuroscience, the aim of this the fledgling stages, and current investigations paper was to show that a wide spectrum of the have been mostly targeted to basic research. traditional marketing-mix components and For that reason, to date, the direct practical brand research is already being investigated recommendations must be derived from the in this new research area. Key contributions new findings very carefully (Plassmann et al., were to make a first move toward defining 2007a). Nevertheless, in the next years a neuromarketing as an applied science, and to concrete deduction of practical implications highlight the importance of consumer neuro- will be very likely. In order to achieve short- science as a more objective measure of term operative optimization goals, consumer individual responses to marketing stimuli. neuroscience could, for example, examine The application of methods from brain whether a variation of the brand is reasonable, research to marketing relevant problems has or how the communication between consu- already yielded several theoretical implica- mer and company can be improved. With tions. First, as discussed in the introduction, regard to long-term product strategy, consu- the neuroscientific measurement approach mer neuroscience could be used to determine can lead to more objective results, and the which consumer segments are reached by

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb 288 Mirja Hubert and Peter Kenning advertisement strategies, or whether a future emotions in the buying process. In order to purchase of the brand is probable. Another prevent the risk that neuromarketing inter- possible field of application is the determi- venes in personal privacy to an unacceptable nation of the market potential for a new degree (The Lancet, 2004), institutions and product or for discontinued products. The neuroethic conferences are already discussing new techniques offered by the emerging field the need for the responsible use of the new could address the questions associated with techniques and the associated findings. the potential profitability of revitalization of a As with any new approach, consumer discontinued brand (Kenning et al., 2002; neuroscience must face the challenge of some Braeutigam, 2005). With respect to current limitations. For example, the studies are very regulatory policies such as competition law, cost and time intensive, and are associated the findings of consumer neuroscience can with legal and moral considerations. As help to improve existing practices, which mentioned above, the outcome of experiments were previously based on erroneous theoreti- to date needs to be further validated and cal assumptions, such as the consumer making expanded, because of the complex data a buying decision on a rational basis (Chorvat analysis required, the relatively small number et al., 2004). of existing studies, and the relatively simple As the ultimate buying decision-makers, experimental setting that is necessary for consumers can profit from the findings of conducting brain imaging studies (Plassmann consumer neuroscience as well, by being et al., 2007a). Even though the technical presented with products that they actually methods are steadily improving, they still only desire. Moreover, consumers will learn to offer a relatively indirect measurement of better understand their own behaviors. From cortical activity changes, due to limitations an ethical point of view, neuromarketing is in temporal and spatial resolution. Beyond this, often associated with the abuse of neuroscien- all results provided by consumer neuroscience tific methodologies, as a means to ‘‘read’’ rely on the assumption that the measured consumers’ minds and to manipulate their activation is not the result of only noise or thoughts and behaviors. At present, such systematic errors, that a correct spatial and concerns are arbitrary, because the technol- temporal assignment of measured quantities is ogies are still very imprecise and investigating possible, and that the supposition about the brain activations does not necessarily yield typical functions of certain brain areas is valid an understanding of how the brain works in the actual case as well. Furthermore, it is (Fugate, 2007). Another way that consumer presumed that the stimulus under investi- neuroscience can benefit the consumer is for gation and no confounder leads to the cortical example, to investigate the neural correlates of response of the participating subject (Kenning shopping . It could be hypothesized and Plassmann, 2005). that people suffering from shopping addiction Another limitation could be the validity of show irregularities in executive regions (e.g., the studies, which is often called into question. prefrontal cortex) or in areas associated with Due to high costs, the number of the participat- the perception of losses (e.g., insula; Knutson ing subjects is usually very low and a small et al., 2007). Thus, they might experience only sample size may include the possibility of false the rewarding feeling and are not able to positives and a higher probability of committing control themselves. Even though investi- a type II error (Tversky and Kahneman, 1971). gations by Bijou et al. (2004) that explore However, an argument for the validity of the the connection of prefrontal dysfunction and results could be that several researchers of credit card use do not support this assumption, different nationalities, applying various exper- further investigations may help people control imental settings to investigate marketing their buying habits, and may help consumers in relevant questions with the help of brain general to protect themselves from their own research methods, have arrived at very similar

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb A current overview of consumer neuroscience 289 results concerning the specific brain activation widely published, for example, in Inter- (Ambler et al., 2000; McClure et al., 2004a; national Journal of Advertising, Manage- Koenigs and Tranel, 2007; Kenning et al., ment Decisions, Journal of Product and 2007b; Plassmann et al., 2007a). On the other Brand Management, Advances in Consumer hand, the described robustness of the neuroe- Research, Journal of , Neu- conomic findings may also constitute a counter- roReport, and Brain Research Bulletin.He argument for the validity. For example, we has presented papers at numerous conferences know that there are both semantic and including AMA-Conference EMAC, and ACR. phenomenological variations between different For his work he received several best paper brands, but the brain seems to process them in a awards and grants. verysimilarway,ascanbededucedby observing the specific activation pattern with fMRI. Thus, it could be possible that the research References method is still too inaccurate to measure small Aaker JL. 1997. Dimensions of brand personality. variations in brain activation. Journal of Marketing Research 34(3): 347–356. With this paper we hope to rectify the Aharon I, Etcoff N, Ariely D, Chabris C, O’Connor E, sometimes over-simplified assumption that Breiter H. 2001. Beautiful faces have variable consumer neuroscience is focused on a search reward value-fMRI and behavioral evidence. for the ‘‘holy grail’’ of marketing, the ‘‘buy Neuron 32(3): 537–551. button’’ in the brain. Our evidence shows that Ailawadi KL, Keller KL. 2004. Understanding retail there is no possibility of such a result. branding: conceptual insights and research Furthermore, though the application of neuro- priorities. Journal of Retailing 80(4): 331–342. logical methods in the area of marketing Ambler T, Burne T. 1999. The impact of affect on research has already yielded relevant findings memory of advertising. Journal of Advertising in both theory and practice (Plassmann et al., Research 39(2): 25–34. 2007a), because of the complex data analysis Ambler T, Ioannides A, Rose S. 2000. Brands on the required and the relatively small number of brain: neuro-images of advertising. Business existing studies, the outcome of experiments Strategy Review 11(3): 17–30. to date needs to be further validated and Anderson EW, Fornell C, Lehmann DR. 1994. Cus- expanded (Cacioppo et al., 2003; Kenning and tomer satisfaction, market share, and profitabil- Plassmann, 2005). Nevertheless, by observing ity: findings from Sweden. Journal of Marketing the brain — the organ of (buying) decisions – 58(3): 53–66. one of the most fascinating objects of research Bagozzi RP. 1991. The role of psychophysiology in is now spotlighted by marketing research. consumer research. In Handbook of Consumer Behavior, Robertson TS, Kassarjian HH (eds). Prentice-Hall: Englewood Cliffs, NY; 124–161. Biographical notes Bailetti AJ, Litva PF. 1995. Integrating customer requirements into product designs. Journal of Mirja Hubert completed undergraduate stu- Product Innovation Management 12(1): 3–15. dies in business at Humboldt-University, Ber- Bechara A, Damasio AR. 2005. The somatic marker lin, majoring in Marketing and International hypothesis: a neural theory of economic Management. Since September 2007, she is a decision. Games and Economic Behavior 52: Research Assistant to Professor Peter Kenning 336–372. at Zeppelin University, Friedrichshafen, Bechara A, Damasio H, Damasio AR. 2000. , Germany. decision making and the orbitofrontal cortex. Peter H. Kenning is a Professor of Marketing Cerebral Cortex 10: 295–307. at Zeppelin University, Germany. His primary Bijou Y, Spinella M, Lester D. 2004. Credit card use research interests are consumer behavior, con- and prefrontal cortex dysfunction: a study in sumer neuroscience, neuroeconomics, and neuroeconomics. Psychological Reports 94(3): marketing management. His work has been 1267–1268.

Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb 290 Mirja Hubert and Peter Kenning

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Copyright # 2008 John Wiley & Sons, Ltd. Journal of Consumer Behaviour, July–October 2008 DOI: 10.1002/cb