 So good evening everyone, it is a pleasure to be here and to talk to you about neural marketing from Red Bull to Wine Tasting. Over the next 15 minutes, it's a little bit loud out there. So over the next 15 minutes, I would like to talk with you about what is neural marketing and why it becomes so popular and quite important these days. And second of all, I would like to also talk about the importance of brand recognition and how neural marketing has helped businesses, companies, business leaders to drive business decisions. And last but not least, I would like to show you that price, price tag, the more expensive something is, can have influence on our preference, even at the brain level. So apparently our brain likes it when it is expensive. So let's just begin with what is neural marketing and if it is useful at all. So neural marketing is an applied discipline that combines three different fields. We start with economics, especially with the risk and utility function. And it is also combined neuroscience, especially cognitive neuroscience, human neuroscience. So the part of neuroscience that deals with human behavior and the human brain function. Also, it combines psychology. In the middle of it all, we have neural marketing. So some of you might ask, so why neural marketing? Why not just the traditional or conventional marketing approach? Well, as one very famous tech founder said, marketing, it is too important to be left to the marketing department. No offense to anyone who works in marketing. But well, one tech founder said this. Any guess who said that? Nope. No, it's not Steve Jobs. Yeah, I know. People tend to guess that it's one. Say no, it's actually the co-founder of HP. But in addition to this, there is this phenomena of the iceberg of choice and preferences. Just like an iceberg, it is really easy for us to see the tip of the iceberg. But what lies underneath is usually more complicated, but actually more interesting. With choice and preference, that is also the case. So the traditional marketing approach, try to address just the tip of the iceberg, just the tip of the choice and human preferences. Neural marketing, on the other hand, really try to address what's underneath those choices and preferences. For example, let's say a company is designing a new packaging. A traditional marketing approach will do a customer survey in terms of a questionnaire and us. So from this packaging, which part of this packaging you pay most attention to or which part of the packaging attracts you the most? The neural marketing way may be using an eye tracker. So instead of asking, we'll look at your eye movement. And companies do this a lot. So then if they want to hide an information, they know where to put in the packaging these informations are. If they want to emphasize something, so you buy more of their products, they also know where to put this information. We can also use electroencephalography, e.g. at the higher levels. So then we can actually record the signal from your brain and infer what your, how certain packaging or certain marketing method actually attracts your attention more. Or the more sophisticated one, we can also use the magnetic resonance imaging, especially the fMRI or the functional magnetic resonance imaging, to tell us if there is a higher excitations or a higher activity in certain part of your brain when you see different products, when we see different packaging, when we see different advertisement, for example. Now let's talk a little bit more practical about how companies use this neural marketing method. So Red Bull and Sprite. So how many of you here drink regularly energy drinks? So it can be Red Bull, it can be this monsters energy drink. How many of you? Oh, not that many. Good, because I will give you an interesting information. So maybe some of you are familiar with this ad. Red Bull gives you wings. A group of researchers at the Insead Business School in Paris try to ask, does Red Bull really give you wings? So does Red Bull actually give you an edge on the cognitive performance when you actually drink it? Does your cognitive performance improve or do you perform better at certain tasks after you consume this energy drink? So what they do is they ask the participants, just like you guys here, and they ask the participant to perform a stroke task. And today we're going to perform a stroke task together. Okay, so please put your hand like this. Okay, like this. And your task is to decide between these two numbers, which one has larger values. So if it is seven, then put your left up. Good, very good. So after this, we will try to decide. So remember which one has larger value. So now, okay, what about this? What about this one? This one. Remember, larger values, not larger in size. It gets a little bit trickier. But now it's the real test. That was just the practice. So now let's do it again. Now it's the real stroke task. Ready and go. Okay, very good. So that is a stroke task. And as you can see, it gets a bit difficult. And the participant didn't just do 10 or 20 trials, but they do hundreds of trials over and over, over again, until they're a bit exhausted. So after they're exhausted, they were allowed to take breaks. So about half an hour breaks. And then after the break, they were told that, okay, now we want to test whether certain beverages have influence on your performance. So they were divided into four different groups. Some groups are one group called control. In this group, the participant were asked to drink Sprite. So just regular Sprite. Nothing really in it. So it's just your regular Sprite that you can buy at the grocery store. And then the participants who were put in the real stimulant, they were asked to drink lime Red Bull. So the researcher makes sure this is not just a regular Red Bull, the same effect as Red Bull, but with a different taste. So the taste is quite similar to Sprite. That's pretty straightforward. Okay, Sprite versus Red Bull. What's so interesting about it? So now let's see the hidden group. In the hidden group, what they, they asked the participants to drink Red Bull, but they actually label it as Sprite. So the participants thought that, okay, this is just regular Sprite. I just think Sprite, but actually they actually drank Red Bull instead of Sprite. In the placebo, this is also interesting, they thought they drink Red Bull, but actually they just drink simple Sprite. So what the researcher did after this experiment is that they tried to compare the performance before and after consumptions of these beverages. So now let's see the results. In those who drank Red Bull or drank Sprite and with different label. So now in the group that actually consumed Red Bull and believed that they consumed Red Bull, apparently there is an increase in performance, about 2% increase in performance before and after. To those who drink Sprite and know that they drank Sprite, there is a decrease in performance, about 1% decrease in performance. What about who thought they drank Sprite, but actually drank Red Bull? That's a slight increase, not as much as those who really think they drank Red Bull and actually drank Red Bull. Now the placebo. What do you guys think? Calm down? Nope, it's going up 3%. So it's even more than those who drank actual Red Bull. So these participants drank Sprite, but just they thought they drank Red Bull. Okay, so the take home message is there is a placebo effect of brand recognitions that brand is very, very strong. It is kind of embedded in our mind that once we believe it, sometimes we actually gain more confidence and might perform better even though the substance itself is not actually the stimulant. So companies aware of this, of the importance of brand recognitions and I would like to give an examples on how it is used. So I believe that all of you here know the Coca-Cola companies, right? So Coca-Cola, well it's fun, it's freezy, beverages, but not necessarily healthy. So when the company decided to diversify their product and enter the water bottle market, they don't use the brand Coca-Cola anymore. They don't use the brand Coca-Cola water, but they use this brand. This is from the Coca-Cola company, just so you know. So they want to descend themselves as much as possible from water bottle because Coca-Cola is not healthy and water bottle is supposed to be healthy. And then they realize that there is a niche of market. People who love freezy beverages, who loves things like Sprite, Fanta, Coca-Cola, but quite health conscious. So how do they target this market? With this FIO, BioLimo. So this is just a fancy packaging of Sprite and Fanta, but of course people who are health conscious are more likely to drink this beverages compared to drink just a regular Sprite or Fanta. But if you compare the sugar content, if you don't believe me, go home, compare the sugar content and it's pretty much the same. So the take-home message is be an informed consumer when you are about to buy certain products. Don't forget to actually see what it is and not just a marketing gimmick, okay? So our brain on expensive wines. So as you are here, how many of you tasted the wine that we provide today? Okay, quite a number of you. So there's wine from the box and the wine from the bottle. And it will become quite interesting once we discuss this. So we tasted the wine here. Mingo and some of you talk about while talking about machine consciousness and artificial intelligence, but the researchers at the California Institute of Technology in the USA, they asked the participants to did the wine tasting inside of an MRI scanner. So yeah, interesting enough. We neuroscientists like to do all kinds of weird experiments. This one is quite interesting actually. So the participant tasted wine while the researchers scanned their brain activity. So one to know which part of the brain area were active when they are tasting the wine. The procedure is that first the researcher told the participants the wine you are about to taste costs five dollars or the wine that you are about to taste costs 90 dollars or the wine that you are about to taste costs 35 and so on and so forth. And then they tasted the wine rinse and they have to rate how much you like this wine that you just taste in. So they did it over and over and over again. And the trick is so the participants were told that they had they tasted five different samples of wine, sample A, B, C and D and each wine has different price point. The participants did not know that actually they only tasted three different kinds of wine. But one A taken sample as sample A and sample B and were set at two different price point. The second wine also samples C and D and they set at two different price points. So it's the exact same wine just different price point. And what happened then? On average, participants like the wine that is at higher prices even though these are the completely the same quality from the exact same bottle. But the price influenced how the participant rated whether they like the wine very much or just so so. And interestingly enough when we look at certain brain areas and going deeper what we found what they found is that in medial prefrontal cortex so the very very front part of the brain there is a higher activation when the participants tasted the more expensive wine the so-called more expensive wine compared to the less expensive. With that I would like to summarize that today we've talked and discussed a little bit about neuro marketing why is it what methods are used. Second of all there is this battle of red bull and sprite be aware that sometimes brand recognitions can influence your performance can influence your preference. Last but not least even at the brain level higher price tag influence our preference. And with that I would like to thank you for your attention and we always look for participants where I work we always look for participants. I brought some information leaflet as well about our studies so if you're interested to get a brain scan and use it as a Facebook profile picture it makes a cool one. Please talk to me after the event or contact me at this email address and then or I can also give you the business cards. Thank you very much and I will be happy to answer questions. Thank you very much Dianne and actually the first question I have to the audience as you remember well as Dianne Festival said we have two kinds of wine perhaps Dianne you can take the bottle. So which one did you like the most. Please raise your hand those who like the bottle one. Okay and please raise your hand those who like the box one. Well you are good participants it was the same wine but interestingly as you see this wine is empty and the result of left here this box and if you come come back and see how many classes from the box lines that there are much more. Yeah perhaps it's a good proof for some near scientists right. So please your questions. How does it come to the difference in this test in the group that tested the real red bull and the favorite bull because they both they were thinking and they were drinking red bull but how does it come that they have different results. Okay so if I can repeat your questions so those who drink red bull and know that drink red bull have an improvement of two percent and those who drink actually drink sprite but thought that the red bull they have improvement of three percent. So the researchers themselves they don't actually get any give a conclusions or a discussion point in why this can actually happen but what we can speculate is that and what they emphasize is more that the performance of those who believe that drink drink red bull whatever the content is is quite comparable so it's not significantly different but it's significantly different from the control and from the hidden one. Okay well for so basically there are two parts of the neuro marketing so that one part is the one that is very very much commercialized so sometimes the results are not available but there are also more the academic side that the results are available. So again if you're interested I can give you some readings if you're interested in there are also some readings there are also some readings about wine sommelier who were tricked into drinking red wine but it was actually white wine and they couldn't really differentiate between red wine and white wine interestingly enough even though they're wine expert apparently wine expert cannot differentiate red wine and white wine there are also studies about Coca-Cola versus Pepsi and then how that these kind of brand recognition affect the neural activity as well so if you're interested I would be happy to provide some readings. Next to the last question. I actually think it also tricked us with these numbers because the differences in some 0.5 percent you should also show the standard deviation there I think that the data behind this pretty noisy and you need to really very large n numbers so how did the data behind it so what really happened and the sample size and everything I can give it to you if you're interested it's just that for this forum I don't want to do data dumping you know there is the standard deviation there is a concrete and solid statistical modeling and statistical analysis behind the results so it's not done by companies or done by so-called the neural marketing diva or something like that no but it is really done by the research institute at the INSEAD business school and there are papers that explain all the steps but here is just a snippet of what the paper said so it's about like 20 30 percent of what the paper is actually analyzing. Okay the very last question. I just missed the point how did images of great health in experiments. Okay so basically what we do during this kind of neuroimaging experiment there are certain conditions and there are also there are also a way that we compare one condition to the other and like I said this is a snippet of what the what the researcher is actually doing so a deeper approach to it is to actually before you are rating before these subjects are consciously rate how much they like it or not the brain activity already predicts how much they're going to rate the stuff the wine that they taste you know so then if it is just like okay the brain activity during during tasting during rating this is how much that is not really give a deeper understanding and a deeper insights but what also interesting from these kind of experiments is that we can actually prove that even before you consciously decide which product you like or which which rate rating you gave the brain activation itself already predicts what you're going to kind of say