WARC, 22 October 2013
HAMBURG: The use of neuroscience is reaching into new areas,
as a German researcher claims that consumers are willing to pay up to a third
more for products and services than they are currently being charged.
Neurobiologist Kai-Markus Müller told Der Spiegel that many
people considered that a business such as Starbucks, the international coffee
house chain, was selling a relatively inexpensive product for a lot of money.
"But," he said, "the odd thing is that even this company doesn't
understand it."
Müller argued that "classic market research doesn't
work correctly" and instead he has focused on "neuronal
mechanisms" that people cannot consciously switch off.
His work in this area has included the use of
electroencephalography (EEG) to measure brain activity when people were shown a
cup of coffee several times with different suggested prices.
The results indicated that subjects were prepared to pay up
to €2.40 for a cup of coffee, which was 33% more than the €1.80 Starbucks
actually charged.
"In other words, the company is missing out on millions
in profits, because it is not fully exploiting consumers' willingness to pay
money," Müller stated.
While Starbucks may be undercharging in Germany, it has been
accused of overcharging in China, where China Central Television, the official
state broadcaster, claimed that consumers paid a third more than in the US.
The Financial Times reported a comment from Wang Zhengdong,
director of the Coffee Association of Shanghai: “Starbucks has been able to
enjoy high prices in China, mainly because of the blind faith of local
consumers in Starbucks and other western brands.”
In response, Starbucks said its pricing strategy was based
on local market costs, including infrastructure investment, real estate and
labour.
These practical factors may place limitations on the future
of neuro-pricing, but the idea that a "feel-good price" can be
determined by brain testing in lab conditions may be attractive to some brands.
"Everyone wins with this method," said Müller as
he pointed to the 80% of all new products that fail.
Data sourced from Der Spiegel, Financial Times; additional
content by Warc staff
No comments:
Post a Comment