A study on use of Nudge marketing by Indian car marketers, making Neuro marketing a practical

reality

A Research Paper by

Dr. Manish Ishwardayal Gupta,

Institutes address: ASM IBMR, Chinchward, Pune
Correspondence address: B1, 203 Mayur Kilbil Society, Dhanori Lohegaon road, Dhanori, Pune-
411015. Email id:[email protected]
Mobile:07218292534
 A Study on use of Nudge marketing by Indian car marketers, making Neuro marketing a practical
reality
Abstract: Neuro marketing uses costly fMRI (functional magnetic resonance imaging) & SST (Short stage

topography) machines, brain scan equipment’s to record the movements in brain, they look into the sub

conscious thoughts, feelings and desires that drive the purchasing decisions. Nudge marketing uses the

concept of two system theory in the mind, System 1 which operates automatic and quickly with little or no

effort and no sense of voluntary control, System 2 allocates attention to effortful mental activity that demand

complex computations, how brain keeps memory records, how our left side of brain being more creative,

articulate and right side being more in automatic thinking. The study was done to verify, whether in the

features of cars and promotion offers feel of nudge is there, do the customer perceive benefit or do

they feel that the nudge features resolve some of confusions they have. The study shows the how

Nudge marketing is simplified version of Neuro marketing without its costly lab equipment’s. The study is a

descriptive research based on secondary data on car marketing and field survey of 490 new car owners in 5

cities in Maharashtra.

Keywords: Neuro marketing, Nudge marketing, Cars, automotive market in India, nudges framework.

Introduction: Nudge in simple terms means push via purposeful features to customers. Nudge are part of

push strategy of consumer behaviour marketing, consumer behaviour models have studies covering presales,

sales and post sales studies, study on nudge covers broader overall expect in sales covering presales, sales

and post sales aspects. Nudges are strategies in subtle marketing, where positive reinforcement and indirect

suggestions or cues are used to change consumer behaviour.

Nudge Theory is a concept in behavioural science, political science and economics which argues that

positive reinforcement and indirect suggestions to try to achieve non forced compliance can influence the

motives, incentives and decision making of groups and individuals alike at least as effective if not more

effective that direct instruction, legislation or enforcement. (Richard Thaler and Cass Sunstein (2008))

Neuro marketing is the branch of neuroscience research that aims to better understand the consumer

through his cognitive processes and has application in marketing, explaining consumer's preferences,

motivations and expectations, predicting his behavior and explaining successes or failures of advertising
messages. Consumer buying decisions are made in split seconds in the subconscious, emotional part of the

brain, What we like, don't like, want, fear, are bored by, etc. is indicated by our brain's reactions to brand

stimuli. Firstly introduced in June 2002 by an Atlanta advertising firm: Bright House, for the creation of a

business division using fMRI for marketing research. Neuro marketing is used for, to better meet "unmet"

market needs, connect and drive "the buy", to inform the development of products and communications -

really to inform the brand's 7Ps and to guide marketers to just the right product designs, packaging and ad

messages to boost sales. Neuro scientific tools take inputs from the processes happening in the brain, and

skip all emotion, introspection and ego. It is difficult for a survey to capture the emotional reasons

underlying consumer preferences or decisions. Our habits, egos, learnings, cues, priming’s, writing,

speaking skills are all recorded in are recorded in left part of brain which is creative, the right part of brain

records the reflective thinking, memories and numerical skills. By looking deep neurologically in fMRI

scan, we can come to know the areas of brain becoming active with different habits, egos, learnings, cues,

priming’s and try to keep those areas active by these activities, thus enhancing the experiences when using

the product. Neuro marketers try to keep the customer excited about the product and experiences by keeping

the portions of brain active.

Table 1: Neuro marketing tools (Lindstorm, M. (2008))

Neuro Marketing
Tools

Recording Without
Metabolic Recording
Electrical recording Brain
Activities in activities
Activities in Brain
Brain

Electroencephalography Eye Tracking

Positron (EEG)
Emission
Tomography Magneto
(PET) Skin
encephalography (MEG) Conductance

Steady State
Functional Topography (SST) Facial Coding
Magnetic
Resonance
Imaging Transcranial Magnetic
Stimulation (TMS) Facial
(FMRI) Electromyography
 Issues in Nudge:

We humans are not perfect buyers as we have habits, ego, and temptations, get affected easily by cues or

priming, follow herd mentality and we often blunder in decision making, nudges are features that assist us in

decision making or make our life easier. The main issue resolved by Nudge is that it makes the users feel

being important, remove confusions in decision making, makes features appear beneficial and useful in

perception.

Our thinking works on two systems as per Nobel Laureate Kahneman (2011), one being automatic and the

other reflective. The focus in using nudge is not to change habit but to go with the way we behave and learn

of our needs and wants from our changing habits.

Literature review:

The author Lindstorm (2008) has tried to reason out why some brands are more successful than others by
using neuro-marketing, which is a combination of marketing and science, by unlocking the buy ology i.e. the
sub conscious thoughts, feelings and desires that drive the purchasing decisions we make. Neuro-marketing
works in area of overlapping region of qualitative and quantitative marketing research to look into why we
buy anything. As per author in fMRI studies it was found that the stronger brands had more activity in areas
of brain that are involved in memory, emotions, decision making and meaning than weaker brands, those
seeing stronger brands show exactly same pattern as they did when they viewed religious images, i.e. brain
reacts to powerful brands in same was as it reacts to religious icons and figures. We do instinct buying
based on our past emotions, memories, facts etc. we feel when we see a product on retail shelf. When buying
cars people buy Audi over other cars with similar feature as they interpret its slogan in German too be
masterpiece of German engineering of high precision, slogans works as somatic marker.
As per author the fMRI studies show that visual images of logos are more effective and more memorable
when they work in tandem to fragrances to our nostrils and music to our ears, as per fMRI results 3 out of 4
brands did well when sound and vision looks were combined and consumers were emotionally engaged and
had long term memory coding, there were negative fMRI results with Nokia ring tone that was causing its
sales to decline in his studies.
Fig.1 -Prediction of Ad Campaign through fMRI (Falk et al. (2012)

n & Jagathyraj (May 2012) have by a structured

Subjects Self-Reported MPFC activity Real world Results

(Survey Method) From
fMRI
 Fig. 2, Dooley.R.(2012) Fig. 3, Thaler and Sunstien(2008)

Thaler and Sunstein (2008) explain that humans have biases and we blunder often in making decisions, have

temptations, follow sometimes herd mentality. They have given examples of nudges in automobile field

mainly in safety area, vehicle features, and vehicle and insurance choices. The short form of NUDGE:

iNcentives, Understanding mappings, Defaults Give feedback, Expect errors, structured complex choices.

Dooley.R. (2012) explains how Nudge and Neuro marketing are connected, Nudge starts the persuasion by

giving attention via some feature, the customer’s motivation comes from his hidden needs and the nudge

feature which provides the solution, which meets the difficulty the customer feels using any product.

Importance and objective of proposed investigation:

The intention of the study is to search for following:

 To confirm that nudges there in cars.

 Nudges in cars resolve what all issues to remove the confusions they have in deciding.

 To see how nudges use the concepts of neuro marketing making same practical.

Research Methodology:

The research methodology adopted for the study comprised of following:

 Descriptive research is based on secondary data on Nudge, literature reviews on the topic and on

observations in car market. Car is used in the study as a product as it has maximum features.

 Quantitative research based on field survey via structured questionnaire on nudges in cars in 5 districts of

Maharashtra Mumbai, Pune, Nashik, Aurangabad and Nagpur. The sample was chosen based random

sampling on new car consumers found in showrooms. The questionnaire was administered to 490 new car

consumers in urban areas of these 5 districts.

 Parametric testing using SPSS 19 software used as sample used are some to some extent random.
Sample size

National Education Association, (US) has prescribed a model to determine the size of sample when the

population size is very large. (Krejcie & Morgan (Dec 1970)) Accordingly, the following model is used to

determine the required sample size.

s =χ² NP (1-P) ÷ d² (N-1) + χ² P (1-P)

Where s = required sample size,χ² = the table value of chi-square for 1 degree of freedom at the desired

confidence level (3.841),N = the population size, P = the population proportion (assumed to be 0.50 since

this would provide maximum sample size)d = the degree of accuracy expressed as a proportion (0.05),N=

165531 sum of vehicle registration in (Aurangabad region-20826, Mumbai region-54192, Nagpur region-

6803, Nashik region-12477, Pune region-71233) in 2013-14. (Motor transport statistics of Maharashtra

2013-14).

 s = sample size comes out to be equal to 383no.from above calculation.

Initially a pilot survey in Pune district, to identify the appropriate sample size we should base was done.

Most previous studies seen in literature review on automotive consumer studies have taken sample size of

300-400, in the study a sample size of @490 respondents with random sampling was taken i.e. for more

sales/ month places like Mumbai 150 samples and Pune districts 150 samples size is chosen, for smaller

cities Aurangabad 70 samples, Nashik 72 samples size was taken and for lower sales area like Nagpur

samples size 48 was taken.

Reliability Statistics:

Table 2: Reliability Statistics

Cronbach's Cronbach's Alpha Based on

Alpha Standardized Items N of Items

0.833 0.785 63

As Cronbach’s alpha value above 0.8 is considered to be reliable for basic research, hence data collected is

demonstrating highly reliability.

Data Analysis: t Test –Hypothesis testing

Table 3: One-Sample Test

Test Value = 3

95%

Confidence

Sig. Interval of the

(2- Mean Difference Remark ( H0: µ=3;

t Df tailed) Difference Lower Upper H1: µ>3 )

39.1 489 .000 1.19184 1.1320 1.2516 P value=0.00 is less

58 than α= 0.05, t value

There are 39.15 very high than

Nudges in table value 1.96,

cars Hence null

Hypothesis H0 is

rejected.

37.0 489 .000 1.06939 1.0127 1.1261 P value=0.00 is less

48 than α= 0.05, t value

Nudges 37.04 very high than

features are table value 1.96,

Benifitical Hence null

Hypothesis H0 is

rejected.

Nudges 24.4 489 .000 .93673 .8615 1.0119 P value=0.00 is less

Features 73 than α= 0.05, t value

removes 24.47 very high than

bottleneck table value 1.96,

 Hence null

Hypothesis H0 is

rejected.

28.6 489 .000 .99796 .9295 1.0664 P value=0.00 is less

Nudges 37 than α= 0.05, t

features value28.63 very high

makes than table value

life/work 1.96, Hence null

easier Hypothesis H0 is

rejected.

t distribution approaches Z distribution with large sample size, compared value of t will be same as Z value,

p value in all above is found to be 0.00 (two tailed) which is less than 0.05, t test values also be very high ,

we can conclude from above to reject null hypothesis,(Null hypothesis being H0: µ=3; alternate hypothesis

H1: µ>3) , making alternate hypothesis to be true, hence we can say that nudges are there is cars, people

find nudges to be benifitical in cars , the nudges remove fears and confusions in cars, nudges makes life

easier for car drivers.

Table 3: Nudges in post liberalised car market in India and issues resolved by same:

Cars in market with

P Nudge feature Issue resolved by Nudge these Nudge
1)Power steering, AMT---MUL Celerio,
adjustable steering, Tata Zest, Hyundai
AMT(Automatic Feminine feature on car, i10,i20,Honda Amazer
Product manual transmission) ease to handle etc.
Tata ---Nano, Aria,
Safari; Nissan-- Datsun
GO, Renault---Duster,
2)Key less entry in Forgetting keys problem Micra, Maruti--Calerio
cars for some people etc.

3)Remote starting of Starting and warming Volvo, BMW, and

car engines at cold places Mercedes
4)Parking assist Judging distances at rear Optional feature in
cameras on cars end ,reversing the car cars
5) Driving Modes like
economic, city and People like to drive cars as Tata --Zest, Bolt and
sport modes per their way of driving. Volvo cars
All Suvs of Tata--
6) ABS(Anti-lock Storme, Safari, Xenon;
braking), M&M--Scorpio,
ESP(Electronic Avoiding accidents while Rextroth; Renault --
stability program) braking. Duster etc.
Renault--Micra, Ace
Frequently stopping at Venture, M&M --
7)Start Stop signals - mileage drop Scorpio etc.

8)LED lights and

Intelligent light Night driving on High end cars of Audi,
system highways - judge way. Mercedes, BMW

9) Tubeless tyres as Usefulness of tubeless

standard tyres tyres Most manufactures
10)Seat belt indicator Tata--Safari, Storme,
via light or noise Warning on not wearing Aria, Toyota--Corola,
signal seatbelt in car. Inova, Altis, etios etc.
VW pole blue motion,
Nissan--Datsun GO --
11)Multitasking like MDS mobile docking
playing music, GPS system, TATA--
navigation, attending Multitasking while driving storme, safari, aria,
tele call, sms etc. car with ease. manza, Ford, Hyundai.
Small Childs and driving
12) Safety seat for of cars by single moms Volvo cars are seen
child with child. with such features.

To get increased fuel Nissan cars are with

14)Eco-pedal efficiency eco-pedals
To avoid battery drain
15)Follow me home post parking vehicle in
feature of headlamp night. Nissan--Datsun GO
16)Distance meter
after vehicle touches
reserve fuel People forget to refuel Nissan--Datsun GO
17) Drivers biometricsPassenger wants to know
: blood alcohol, BP, drivers biometric for his
glucose level, fatiguesafety Nissan Gismo watches.
For electric vehicles locate
18)Near Field a charging point and
Communication(NFC) parking slot, identify
&Radio frequency location of vehicle in
identification( RFID) parking if parking too big. Renault
19)Global Protect vehicle from theft,
navigational system locate car missing by
assisted lo-jack police, assist drivers on Renault, BMW
 security product traffic jams, routing
options on traffic.

20) Auto emergency

braking, smart Cruise To road block stopping car
control well in advance of crash. Hyundai Genesis
1)Price difference
between petrol and
diesel fuel coupled
with CRDI technology All cars in India are
diesel engines To buy diesel or a petrol now giving both diesel
Price technology car and petrol options
Resale value buyers want Tml and Hyundai in
2) Resale value fixing to know of their cars of their promotions are
at time of buying a car interest giving in same now.
3) Car purchase Where to arrange for
scheme: lower EMI finance for buying a high Skoda, Mercedes,
from market rate end car. Audi, BMW, JLR
4) Free insurance and December discounts on
lower EMI schemes Better car finance option cars.
People reach & home
5)Congestion tax office faster Sweden
Stop over speeding at
6) Lottery traffic signal Sweden
Change the mood of
Place 1)Pleasant ambience customer Car dealers
2) Dashing display Make vehicle look more Jazzy displays at show
lights attractive rooms.
1) Advertisement
highlighting features
e.g. like drivability
and better smarter
controls than focusing
on safety weak feature Changing brand value
Promotion of car perception BMW.
Force 1 with Amitabh
2)Personality Perception to affiliation Bachchan, Santro with
endorsement for product Shahrukh Khan.
Physical 1)Signboards at Car Make the car and car show
Sign showrooms room look attractive to eye Car Dealers boards
People want to use and
2)Green tag stickers move to greener products M&M Reva, Toyota
on car sides and technologies Prius and Lexus
3) Mileage stickers on
cars giving saving per
year on fuel or miles
per gallon as per US People want to use more EPA US mileage
EPA stickers efficient cars. stickers Miles/ gallon
1)Incentives benefits To buy a car or not than
Process & usefulness of car using taxi or two wheeler Car dealers
2) Certified driving Remove fear of driving
schools and change perception on MUL driving schools
 ease of driving the car

3)Endorsement by
family and close
friends Hearing all Car dealers
4) Comparative with All things of life and best Tml Indica Vs Zen &
other cars value for money Santro

1)Training of car sales Personal selling by

People people , salesman Car dealers

Conclusions:

In respect to urban cities of Maharashtra following conclusions can be drawn:

 Car sales can be improved by putting nudges in features and promotions of cars in the urban areas.

 The nudges in cars solve issues of habits, egos, learnings, cues & priming’s in decision making of buyers.

 Nudge marketing in cars uses the concepts of neuro marketing without using the heavy costly equipment of

neuro marketing, keeping the mind excited for the feature which solves the hidden need of the customers.

 Nudge marketing is accomplishing same effect Neuro marketing gets by attacking on the way our mind

works. Human minds working understood by Neuro marketing is used in nudge marketing making Neuro

marketing practical.

Reference:
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Com/blog/article/persuasion.
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neutral focus group predicts population.
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