hi everyone, below is the enedited version of an article i wrote for times of india, mumbai,
Will Neurology revolutionise marketing thinking?
The CEO of a leading consumer product company is in deep trouble. The financial performance of the company is not looking good. He needs to immediately take steps to shore up his company’s bottom line. What would the CEO do? Who would he turn to for help? He would probably approach the finance department or the production department or perhaps even the sales department to achieve good results in a short time. Chances that he will depend on his marketing department to show immediate results are very slim. The reason is obvious. Marketing departments are not really trusted for their ability to deliver sure, quick results. As Prof. Nirmalya Kumar of London Business School mentions in his book Marketing as Strategy, “All that marketers want from CEOs is more money to spend”.
What will get the marketers a place in the strategy table of the CEO? As CEOs become more and more accountable in this era of quarterly results and interventionist shareholders, marketing departments of organizations have to deliver consistent and sure results. Marketing departments can no longer hide under the guise of long term brand building, but have to show perceivable effects in the market place in the short term. Every marketing campaign has to show immediate results in the market place.
It is easier said than done. Studies around the world have shown that 9 out of 10 new product launches fail. This is despite billions of dollars being pumped into market research and advertising and promotional campaigns. When other departments of the organizations are working towards a 6 sigma level of perfection, the marketing departments of organisations cannot afford to have 6 sigma level of failure rate.
Despite some of the best brains working in marketing departments around the world, why is there such a huge failure rate in the marketing decisions made around the world?
The problem is a fundamental one. At the core of all marketing decisions is the understanding of the consumer. The existing body of marketing theoreticians do not have a fundamental theory to understand the consumer. This fundamental problem (pun intended) is the basis of all marketing mistakes.
All scientific fields of study are based on certain fundamental theories. For example Physics has Quantum Mechanics and General Relativity that explains all the forces and particles of nature and are true throughout the universe. Biology has
Darwin’s Theory of Evolution and DNA based genetics to apply to all organisms that have ever lived on earth. These fundamental theories then became the bedrock on which other theories in were based on. It is also interesting to note that the pace of newer discoveries in these fields dramatically quickened after the discovery of these fundamental theories.
On the other hand the field of marketing has never had a strong, universal theoretical basis. Several theories that have been propagated to explained several smaller aspects of consumer behaviour. But none of those theories could explain all aspects of consumer behaviour.
Classical economic principles had a huge influence on Marketing theories. Rationality of the human beings is fundamental to classical economic theories, and it was integral to all marketing theories and practices. But Daniel Khanman, the winner of Nobel Prize for Economics in 2002 and the proponent of Behavioural Economics, demolished the belief that human beings are always rational in their behaviour. He propounded that consumers are often irrational and take mental short cuts not only while buying soaps and toothpaste but also while taking decisions involving billions of dollars.
Traditional marketing theories fail to recognize and hence to understand the irrational side of the consumers. This, I feel, is one of the most important reasons why marketing decisions which have been made after spending millions of dollars on market research fail in the market place. Almost all market research techniques tap only into the rational responses of the consumers, and that too only the ones that are verbalised. But in reality there is huge difference between the rational responses of a consumer to a market researcher and the consumer’s behaviour in the market place. This critical gap in consumer understanding can be plugged only if one understands the irrational part of consumer behaviour.
The theory of behaviourism launched by John B. Watson in 1913, and later propagated by B.F. Skinner, Ivan Pavlov, etc had tremendous influence on marketing theories and on consumer decision making theories. Behaviourism that focused only on the observable stimuli and its observable response virtually denied the existence of the mind. It failed to explain the mechanism that converted the observable stimuli into observable responses, not to mention the non-observable ones.
In his book Language and Problems of Knowledge, Prof. Noam Chomsky, an MIT professor and linguist, propounded that the theory of behaviourism is not able to explain how human beings learn languages. Behaviourism and theories based on it continued to have strong influence on marketing practices despite Prof. Noam Chomsky exposing its inadequacies.
Prof. Noam Chomsky went on to pioneer the development of the field of Artificial Intelligence (AI). The theories of AI influenced the development of the theories of Cognitive Science. Cognitive Science assumes that the human brain is like a computer. In the words of Prof. Howard Gardner of Harvard University, an early proponent of cognitive theory and later a strong critic of the theory, “Cognitive scientists view the mind as an information processing device, a computer made of flesh and blood rather that of silicon”. Marketing theories even borrowed terms like short and long term memories, processing of information, etc from the field of Cognitive Science to explain consumer behaviour.
The field of AI and Cognitive Science could not go beyond the initial hoopla it created because the mechanical world of computers could not take into consideration the strong influence that emotions had on human decisions. Marketing theories that are based on Cognitive Science too have huge limitations due to their inability to incorporate the role of emotions into consumer decisions. .
Some of the other famous psychological theories like Psychoanalysis and Transactional Analysis has had very little influence on marketing theory. So essentially, no one single theory has succeeded in providing a comprehensive explanation for all aspects of consumer behaviour. This situation can be explained in the words of Dr. V.S. Ramachandran and Dr. J.J. Smythies of University of California. ‘Psychology (on the other hand) has been characterized by an embarrassingly long sequence of ‘theories’, each really nothing more than a passing fad that rarely outlived the person who proposed it”.
Thus in the absence of any comprehensive theory that could explain all aspects of consumer behaviour, marketing professionals acted like the blind men who just touched one part of an elephant and tried to describe the whole elephant.
No wonder there is so much subjectivity in marketing decisions. This subjectivity leads to a situation where the Brand Manager’s decision is always negated by the Marketing Manager and his decisions in turn are negated by the CEO. Marketing might be the only department where seniority decides the correctness of a decision!
In the absence of fundamental truths in the field, marketing professionals base too many of their decisions on the past experiences of other brands. Just have a look at any marketing book. The common method of proving or disproving a certain theory is by quoting past examples that fit the argument. The USP based positioning theory is established by proving that people remember the name of the first man who landed on the moon but not the second. But the fact is that all of us remember multiple names of things if there is a need to. But the proponents of the USP theory conveniently forgot that while developing their theories.
As a professional I have become tired of this subjectivity that governs all marketing decisions. I often used to wonder whether there is any scope for the emergence of a scientific marketing theory that explains all aspects, I repeat, all aspects of consumer behaviour.
The solution is at hand. The need for a fundamental theory to explain all aspects of consumer behaviour seems to have found an answer. It has been found that all actions of a human being, his joys and sorrows, his memories and his ambitions, his sense of personal identity and free will, are in fact no more than electro-chemical actions of a vast assembly of nerve cells and their associated molecules in the human brain. The brain controls all aspects of human behaviour. So an understanding of the working of a human beings brain will help explain all aspects of a human behaviour. Yes, the field of Neurology seems to offer a panacea for the fundamental problem of the marketers.
Brain is undoubtedly the most complex system in the universe. Although Neurology, the study of the brain has taken huge strides in the last one decade, it will be a while before one has a complete understanding of the human brain. Recent attempts using fMRI scans to unravel all secrets of the brain will not lead too far. But there is no doubt that neurology will be able to offer a far more scientific and reliable explanation of many aspects of human behaviour in the near future. Neurology is the fundamental theory that the field of marketing was desperately looking for. As the discovery of DNA revolutionised as well as streamlined all the studies of living beings, Neurology will revolutionise the field of marketing.
Neurology has already thrown up new discoveries that are of great significance to marketing professionals. Dr. Joseph LeDoux’s discovery that it is the emotional part of the brain that responds first to any stimulus; Dr. Antonio Damasio’s discovery that emotions are an integral part of rational decision making and that emotions occur only in the subconscious mind and we only ‘feel’ the emotions after it has already happened in the subconscious; the discovery that a memory is not a unitary system but a multiple system; the fact that there are many things we see with our eyes but the information is stored only in our subconscious mind; the fact that more than 90% of a human memory that influences our daily decisions is implicit memory that is not known to the conscious mind and so is not amenable to conscious control. All of these have raised serious questions about many of the existing marketing theories and practices.
I have no doubt that as Neurologists around the world understand the workings of the brain of the tropical fish called Aplysia, or new born chicks, or monkeys and of course human brains, one will see a clear indication of the emergence of a fundamental theory that will explain all aspects of behaviour of all living beings. This fundamental understanding will go a long way in developing a strong basis for understanding consumer behaviour.
Marketers, rest assured. Soon you shall get back your place in the CEO’s strategic table.
(Biju Joseph Dominic)
