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Abstract: The idea that consumers are rational decision makers, who carefully consider options when making a
decision about a certain phenomenon, will soon phase out! Believe it or not. In a bid to better understand the
consumer, a myriad of economists still waste their precious time on not-so-deep modifications and
elaborations of mainstream economic models, some of which are barely shallow. Economists who solely rely
on linear models because they are more palatable are simply myopic, naturally or by default. The journey to
better consumer understanding is not an easy walk. There is ample evidence to prove that consumer decision
making is complex rather than simple as portrayed by orthodox economic models. Businesses need to fully
understand the consumer decision making processes for them to thrive in the current competitive business
environment which is now a global village. Existing purely economic models have proven insufficient in
explaining human behavior, precisely because they do not explore the subconscious brain and yet the
subconscious brain has been shown to be very instrumental in decision making processes. It is high time,
economists, marketers and researchers explore, at least deeper, the human brain itself, to uncover the true forces
behind consumer purchasing dynamics. This paper looks at the human brain from a neuromarketing
perspective, to shade more light on our quest to better understand the consumer brain. The paper begins by
explaining and then refuting the highly celebrated and esteemed rational choice theory, after which the human
brain is explored. The paper, among other recommendations, encourages modern day researchers to combine
their traditional consumer research methods with neurological research methods if neuromarketing is anything
to go by, in light of ever increasing global competition.
Keywords : Consumer Brain, Consumer Decision Making, Economic Agents, Marketing, Neuroeconomics,
Neuromarketing, Rational Choice Theory
JEL Codes: B21, D01, D03, D11, D12, D79, D81, M19, M31, M37, P36, P46
I. Introduction
Traditionally, marketers, just like traditional economists, considered all the decisions of the consumer
to be rational. Marketing research has been progressive for decades and yet it has not been able to unlock the
biological and physiological underpinnings that inform consumer choice. In fact, before the emergence of
neuromarketing, marketers usually recognized the human brain as a black box into which no one was able to
fully gain access. The black box was regarded as a no-go-area.
During that (pre-neuromarketing) era, marketing researchers solely depended on retrospective
theoretical constructs to predict and properly expagorate consumer behavior. As a result, marketers were
dependent on indirect ways of obtaining data such as focus groups and interviews in trying to uncover the
underlying processes of consumer decision making. However, such traditional marketing research methods are
not reliable precisely because they apparently provide self-reported assessments that suffer problems such as
unwillingness to reveal the truth among other drawbacks1. The main logic of combining neurological data with
marketing research is based on the undisputable fact that by so doing marketing researchers uncover the
underlying unconscious and affective processes that affect consumer behavior and yet not really understood so
far.
Apparently, there is overwhelming evidence to prove that the majority of the consumers decisions are
in fact not rational. The idea that consumers are rational decision makers, who carefully consider options when
making a decision about a certain phenomenon will soon phase out. Even consumers themselves, have a
tendency of believing that their decisions are actually backed by logical reasoning and yet in reality this may not
always be the case.
Most decision making models, as indicated by literature, do not address the dynamic organic processes
of human behavior, but instead suggest that consumer behavior can be studied as a rigid, linear process, and yet
consumer decision making is actually hinged on dynamic organic processes in the human brain. Therefore, any
1
see Nyoni & Bonga (2017b; 2017c) for more information
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model that seeks to really understand consumer decision making dynamics ought to explore the anatomy of the
human brain, at least to the extent reasonable for the study of neuromarketing. Neuromarketing has been
operationally defined by Nyoni & Bonga (2017b) as the use of neurological research methods to better
understand the thought patterns of the consumers with the potential of identifying the buy-buttons in the
consumers brain in order to make marketing and advertising more effective.
II. The Economic Decision Making Model: The Rational Choice Theory
Consumer decision making can be defined as the process by which consumers make their purchase
decisions based on either cognitive or affective influences or both. Various researchers, economists and
psychologists have attempted to characterize consumer decision making in quite different ways. Basically, the
disciplines of Economics and Psychology have contributed a significant number of predictive models that have
been primarily designed to link economic and cognitive algorithms that characterize consumer decision making
from diverse perspectives. The most widely read and acknowledged predictive model in Economics is the
Rational Choice Theory postulated by Muth (1961). This model is shown below:
Figure 1: The Standard Economic Model of Decision Making
The rational choice theory is a model which is used, mainly by economists, in understanding economic
behaviors, particularly, how individuals or economic agents make choices between different alternatives. This
theory, which has been over-popularized, as a standard economic model of decision making, states that
individuals make their decisions based on utility maximization. This apparently implies that economic agents
will always attempt to get the most value for the least amount of resources (money) they have.
Utility maximization simply means that economic agents generally seek to make sensible decisions
that will give them the most benefit and satisfaction. However, it is important to note that this satisfaction is
actually subjective to that particular economic agent or individual consumer and apparently refers to their own
personal implicit or explicit judgments. Rational decision making, occurs consciously or cognitively and
apparently refers to the use of the theory of utility maximization. Therefore, based on the rational choice theory,
economic agents apparently make rational decisions that are consistent with their own personal and or selfish
objectives and with boundaries imposed by certain given conditions.
According to the rational choice theory, when faced with various courses of action; economic agents
will do what they believe is likely to produce the best results. In order to make rational decisions, it is assumed
that economic agents will take stock of necessary information in an objective way, take stock of available
possible alternatives and make choices that have the greatest possibility of maximizing their expected benefits;
at the same time, reducing any costs or short falls.
A rational choice analysis of the market for green mealies, for instance; would basically involve a
description of the desired purchases of green mealies by buyers, the desired production and sales of green
mealies by sellers, and how these desired purchases and desired sales interact to determine the price and
quantity sold of green mealies in the market. The typical green mealies buyer is faced with the problem of how
much of his or her income to spend on green mealies as opposed to some other goods or services. The typical
green mealies seller is faced with the problem of what quantity of green mealies to produce and what price to
charge for them.
Exactly how does the buyer choose how much of his or her income to spend on green mealies? Exactly
how does the seller choose the quantity of green mealies to produce and what price to charge? There are,
admittedly, a plethora of answers to these questions. They may make their choices based on, lets say, habit;
where current decisions would just be a continuation of what has been done in the past. The decisions could be
made randomly. In contrast, the rational choice approach to this problem is based on the fundamental premise
that the choices made by buyers and sellers are best choices, given all relevant factors that are beyond their
control. The basic idea behind rational choice theory is that economic agents do their best under prevailing
circumstances.
The rational choice theory of consumer behavior is based on the following axioms regarding consumer
preferences: [for more information see Kreps (1990), Mas-Collel et al (1995), and Varian (2006)]
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which are formulated based on prior experiences, unidentifiable emotions and subconscious neural practices,
thereby making it, virtually impossible, for economists to distill the underlying mechanisms within decision-
making through observation alone. Ariely (2008), initially based on the Prospect Theory by Kahneman &
Tversky (1979), significantly changed the way in which we think about how we make decisions; through the
introduction of the idea of predictable irrationality, in which he demonstrated that humans are more likely to
act irrationally than rationally when making certain decisions.
Ariely (2008) offers various examples of normal irrational behavior to show that although some
human behavior might be viewed as relatively rational, this behavior would be irrational as defined by
economists because it is not based on rigid theory of utility maximization and other factors within the economic
model. One such example was an experiment conducted on the Michigan Institute of Technology (MIT) campus
in order to show the allure of free products. In this experiment, Ariely sold Lindt truffle and Hershey Kiss
chocolates to students and limited each student to only one chocolate per customer.
Ariely showed a difference in quality between Lindt truffle and Hershey Kiss by selling the truffles for
$0.15 and the Kisses for $0.01 and found that students preferences for chocolate purchases were relatively
equal with 73% of students purchasing truffles and 27% purchasing Kisses. Subsequently, Ariely lowered the
price of each chocolate by $0.01 such that the truffles were now being sold for $0.14 and the Kisses were free.
With this very small change in price, but with the same price difference between products and the same
expected benefit, now 69% of students chose the Kiss. Basing on the results of this experiment Ariely
demonstrated that the concept of a free product distorts the decision-making process and causes humans to act
irrationally. Therefore, Ariely (2008) argues that human beings often make irrational choices. He supports his
arguments by challenging certain well-known foundational concepts in Economics including the widely read
and acknowledged principles of supply and demand.
Basic economic theory (of demand and supply) states that the price of a product in a market is found at
an equilibrium point, determined by the intersection and an equal balance between demand and supply of that
particular product. However, this price point can be swayed, as argued by Ariely (2008). Through a series of
experiments based on a marketing concept known as anchoring, Ariely (2008) proved that the price consumers
are willing to pay can be easily manipulated, as consumers are not as in tune with their personal preferences as
economic theory suggests.
Anchoring is a marketing tenet that avers that when consumers encounter new commodities whose
features are unfamiliar to them, the first price they see (no matter how arbitrary it may be) becomes an anchor,
which has a strong lasting effect on the price they will be willing to pay for similar products from that time
forward. For example, if a consumer first saw a product priced at $2, the principle of anchoring would argue that
this consumers baseline for the price of that particular product is now $2 and thus he or she believes that $2 is a
fair price for any such product.
Ariely (2008) also exposed irregularities in our decision making through the so-called decoy effect.
When we are presented with two distinct options, we find it difficult to make a decision between them.
However, if a third alternative is introduced into the scenario that is similar to one option but clearly inferior, it
completely alters the choices that we make (Ariely, 2008). Ariely offers the following example to demonstrate
this effect: pretend you had to choose between a weekend in Rome with all expenses paid and a weekend in
Paris with all expenses paid (Ariely, 2008). This decision would be quite difficult in the sense that the two
options are, in some ways, closely synonymous, since they are both weekends abroad, but in other ways, such as
the details of the location, quite different.
However, Ariely (2008), argues that if a decoy option was added, our choice would become easier and
could be manipulated by the decoy alternative. In this case, the decoy could be a weekend in Rome with all
expenses paid except for morning coffee. Ariely (2008), argues that the thought of Rome without coffee causes
participants to gravitate to Rome with coffee because it appears as the better alternative. Therefore, introducing
a third option that is slightly worse than one of the original options makes the original option (the trip to Rome)
seem much better.
Given these examples of human behavior, humans do not have as much rational control over their
decisions as economists may suggest (Ariely, 2008). Instead, consumer decisions are actually, a function of
various external and subconscious stimuli that normally exceed our cognitive capacities but are simplified
through heuristic properties. Based on the idea that the decision-making process is more complicated than what
economic theory suggests; and involves various elements that cannot be quantifiably evaluated and measured
based on Economics alone, a more cognitive perspective ought to be incorporated into the model; in order to
comprehensively understand consumer decision making. These cognitive processes, however, arise from neural
function; an area not normally considered by economists.
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Source: Shutterstock
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What actually differentiates humans from other mammals and animals in general is the complexity of
their thought. The part of the brain responsible for that crucial difference is the cerebral cortex. This is because it
is greatly enlarged in brains of humans. As far as it comes to visual processing, the occipital lobe which is near
the back of the skull, is responsible. Part of the brain responsible for the processing of language and sound is the
occipital lobe (Zurawicki, 2010). This lobe includes hippocampus and amygdala. Their main function is
connected to memory and emotion.
The part that integrates signals or inputs that it gets from various senses is the parietal lobe. This lobe
is extremely important for the functions of navigation and orientation. Brainstem is the part that relates to the
spinal cord. Its main parts are medulla oblongata, pons and midbrain. Role of this brain part is flow of the
information from brain to the rest of the body. It performs some of the essential functions in regards to
controlling breathing and consciousness as well as controlling the heart. In the end it is in charge of the supply
of some cranial nerves to the face and the head (Lewis, 2016).
In between cerebrum and brainstem them are the thalamus and hypothalamus. The thalamus is in
charge of regulating consciousness, alertness and sleep while hypothalamus is main link between endocrine and
nervous system (Lewis, 2016). Endocrine system is the one in charge for producing hormones (Sargis, 2016).
The cerebellum lies under the cerebrum, and its role is connected to motor control; it is in charge of
coordination and balance. The cerebellum has some cognitive functions (Lewis, 2016).
The diagrams above show Paul McLeans brain model. The model is important to neuromarketers,
(modern-day marketers), orthodox marketers, neuroeconomists and orthodox economists in the sense that it
helps us better understand the consumer. According to Paul McLeans brain model each of these three parts
plays a specific role: the neo-cortex (rational brain) thinks, the limbic system (emotional brain) feels, and the
reptilian brain makes decisions. The decision on whether to act or not is not taken inside the reptilian brain. The
reptilian brain (also known as the R complex or the Primitive Brain) controls the body and decides quickly the
strategy that must be executed (e.g withdrawal, action etc.) in order to ensure satisfaction of the basic needs and
wants (e.g physiological, security, sexual etc.). The limbic system is also known as the emotional brain. The
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limbic system is associated with feelings, emotions, remembering of events, relationships with others,
immunity, hormonal balance, attention and general attitude. The decisions of the emotional brain (the limbic
system) refer to annoyance and or pleasure that we associate with certain stimuli. The neo-cortex or the rational
brain is responsible for analyzing and solving problems, using logic and languages and driving creative thinking.
The rational brain (the neo-cortex) is also responsible for building rational memories such as remembering the
information learned for a test, exercise or examination. Therefore, in order to maximize the efficiency of an
advertising or campaign message, it is important for that message to be based on the needs of the customer
rather than the features of the product. To be effective, marketing needs to target first the emotional brain and
the primitive one, which lead them to open the channel of attention which transmits the information to the
rational brain.
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processes that depend on the degree of elaboration the individual is engaging in at that moment and the degree
of elaboration will be influenced by individual and situational factors (Petty & Brinol, 2015).
The ELM model was first introduced by Petty et al (1983) and distinguishes between two different
routes of persuasion. The central route suggests that attitude change is a result of an individuals careful
consideration of information that he/she feels is fundamental to the merits of a specific attitudinal position, and
the peripheral route suggests that attitude change does not occur because an individual has carefully considered
the pros and cons of an issue, but rather because the issue is associated with a positive or a negative cue. It has
been acknowledged that the ELM model has specific implications for advertising messages.
Someone who is about to purchase a specific product (high involvement) may be more focused on the
product-related information presented in an advertisement, while those who are not considering purchasing the
product (low involvement) will not necessarily focus on the product-relevant arguments in an advertisement. It
is generally accepted that consumers will be more motivated to dedicate cognitive effort to evaluating the
qualities of a product if involvement with the product is high. Therefore, when elaboration likelihood is high,
the central route of persuasion is considered to be more effective, and when elaboration likelihood is the low, the
peripheral route is considered to be better (Petty et al., 1983).
There are, however, a number of concerns related to the ELM model specifically the role of high
involvement that have been identified and should be taken into consideration. Firstly, learning about a brand
from an advertisement is no longer considered particularly important as consumers expect most reputable brands
to perform similarly and, therefore, brand decisions are often made instinctively rather than rationally and the
majority of advertisements are processed at low attention levels using low involvement processing (Heath,
2001).
Low involvement processing is the mental state in which most advertising is processed and is the
reason why many believe that advertising has little or no significant effect on their choice of brands. Some
question why consumers are not interested enough to pay more attention to the advertisement and if there might
be something wrong with the advertisement itself, but the reality is that the average consumer does not consider
learning about brands to be important (Heath, 2001).
Low involvement processing, however, does not mean that the consumer does not learn about the
brand. Low involvement processing, unlike high involvement processing, happens automatically and even if the
consumers tendency is not to pay attention, brand learning is still being processed. Low involvement processing
also does not extensively utilize working memory, which means that it is not good at interpreting messages or
drawing conclusions from advertisements, but rather collects inputs and stores it exactly as it is (Heath, 2001).
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Therefore, companies can take care not to generate negative emotional responses to their products;
otherwise females will not purchase such products. Females are also a mammal that is characterised by passion.
Women, according to Broveman et al (1972), Martin (1987), Ruble (1983) and Williams & Best (1990), are
considered as being warm, expressive, compassionate and understanding. She can dislike something as a
reaction to what she is seeing. When she sees a product, she can completely reject or embrace it, depending on
how she is emotionally affected.
Therefore, marketers should know how to effectively penetrate the female brain, and the only way to
do this is through emotions. Females also like to decide on their own. Therefore, it is wise not to pressurize them
with a certain stimuli, just connect her in an emotional way, and let her decide on her own. The results will be
pleasing!
specific situation or stimulus and ignoring other parts (Zurawicki, 2010). Most of the time, the process will go
smoothly and System 2 will adopt the recommendations of System 1 with little or no modification (Kahneman,
2011).
However, if System 1 experiences difficulty, it will utilize System 2 to support it with more detailed
processing that could solve the problem (Kahneman, 2011). There are some subconscious thought processes that
the consumer might not be aware of that influence his/her decisions and have the ability to enter the memory of
the consumer. Exposure to signals processed below the perception level also leaves traces in the mind and these
impact the responses to consciously processed stimuli (Zurawicki, 2010).
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