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Marketing luxury: neuro insight

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 ISSN 1822-6760. Management theory and studies for rural business and infrastructure
development. 2012. Vol. 34. Nr. 5. Scentific journal

MARKETING LUXURY: NEURO INSIGHT

Lina Pilelienė
Vytautas Magnus University

Considering the lack of Lithuanian researchers’ insights into the field of neuromarketing, it
is relevant to analyze the application areas of this paradigm. Considering an intensive competition
among product and service providers in the market, it is necessary for marketers to change their
point of view from highly transaction-oriented mass marketing efforts to neuromarketing methods
which are more subtle in their performance. Neuromarketing research is based on human brain per-
formance; it neglects many contemporary marketing ideas, therefore, modern marketing activities
have to be coordinated with subconscious processes in customers’ brain. Achieving to determine the
main principles of neuromarketing, which could be considered while marketing luxury, a qualitative
content analysis of scientific literature is performed in the article. As a result, structured neuro in-
sights for luxury marketing are provided.
Keywords: luxury, neuromarketing, segment.
JEL codes: M310, M390.

Introduction

Relevance of the research. Previous researches on neuromarketing (see

Pilelienė, 2011; 2012) have revealed a wide spectrum of possibilities of its applica-
tion. Considering the lack of Lithuanian researchers’ insights into the field, it is rele-
vant to analyze the application areas of the paradigm. The attempt of Lithuanian re-
searchers A. Dapkevičius and B. Melnikas (2009) to analyze influence of price and
quality to customer satisfaction in the framework of customer satisfaction can be
called as initial pointer for Lithuanian marketers into a paradigm shift from transac-
tion-based marketing to brain-action-based marketing.
Considering an intensive competition among product and service providers in
the market, it is necessary for marketers to change their point of view from highly
transaction-oriented mass marketing efforts to neuromarketing methods which are
more subtle in their performance. Neuromarketing research is based on human brain
performance; it neglects many contemporary marketing ideas, therefore, modern
marketing activities have to be coordinated with subconscious processes in custom-
ers’ brain.
The scientific problem solved in the article is: how to apply principles of neu-
romarketing for luxury products and services.
Accordingly, the object of the article is principles of neuromarketing suitable
for a luxury.
The aim of the research is to determine the main principles of neuromarketing
which could be considered while marketing luxury.

148
 Achieving to fulfil the aim of the article, following tasks were set for the re-
search:
 to reveal the specifics of luxury marketing;
 to analyze the principle ideas of neuromarketing;
 to define principles of neuromarketing consistent with a luxury specifics.

The qualitative content analysis of scientific literature is provided in the article.

The article aims to reveal contemporary specifics of luxury marketing, find its limita-
tions, and suggest modern neuromarketing ideas to improve the marketing activity
applied for the category. Considering the lack of Lithuanian scientific insights into
the field of neuromarketing, the principal part of the research is based on foreign au-
thors’ (Braidot, 2009, Camerer et al., 2005, Vance, Virtue, 2011 et al.) researches.
General scientific research methods of logical literature analysis and synthesis were
applied for the research.

Insignia of luxury marketing

B. Catry (2003) proposes that “luxury goods offer quality, emotion and rarity”.
G. Atwal and A. Williams (2009) argue that despite of a ‘luxury’ brand definition’s
openness for debate, the natural evolution of luxury raises new challenges for market-
ing strategists. F. Vigneron and L. W. Johnson (1999) highlight that “luxury” stands
in the extreme-end of the prestige-brand category. Accordingly, three types of presti-
gious brands can be found in a market: up-market brands, premium brands, and
luxury brands – respectively in an increasing order of prestige.
Therefore, F. Vigneron and L. W. Johnson (1999) propose that prestige-
seeking behaviour is the results of multiple motivations, but in particular the motives
of sociability and self-expression. According to G. Atwal and A. Williams (2009),
luxury brands need to stay in front of luxury consumers, through the discovery of
new and different ways to give expression to their desires. Authors defined five val-
ues of prestige combined with five relevant motivations. Moreover, the existence of
values and related motivators exist in accordance to two core dimensions: (1) per-
son’s self-consciousness (publicly self-conscious persons are particularly concerned
about how they appear to others, and privately self-conscious persons are more fo-
cused on their inner thoughts and feelings) and (2) the importance of the perception
of price as an indicator of prestige. The interaction among the two dimensions and the
manifestation of motivations are provided in Figure 1.

149
 Fig. 1. Motivations for choosing a luxury
Source: adapted from F. Vigneron and L. W. Johnson (1999).

As it can be seen in Figure 1, customers can be segmented into four groups

based on their motivations for choosing a luxury: Bandwagon (consumers may use
the perceived extended-self value of luxury to enhance their self-concept), Veblenian
(luxury products are bought to display wealth and power), Snob (limited supply of
products enhances the consumers’ value and preference for it), Hedonist (consumers
value the perceived utility acquired from a luxury to arouse feelings and affective
states) and Perfectionist (consumers value the perceived utility acquired from a luxu-
ry to suggest superior product characteristics and performance).
According to the segment characteristics and product’s specifics, different
marketing mix strategies have to be applied. Moreover, according to G. Atwal and
A. Williams (2009), luxury brands first being adopted by the affluent and wealthy
customers, inevitably are translated and reinterpreted down to mass markets. There-
fore, it can be stated that once acquired in one segment (e. g., snob), a luxury can be
offered to the other (e. g., bandwagon).

Neuromarketing luxury

Analysts of consumer behaviour highlight: human thinking proceeds in two

levels: conscious and subconscious. N. Braidot (2009) suggests that the subconscious
thinking defines the major part of human purchase decisions. According to
C. Camerer et al. (2005), much of the brain implements the automatic processes,
which are faster than conscious deliberations and which occur with little or no aware-
ness or feeling of effort.
Before suggesting neuroscientific methods for luxury marketing, it is necessary
to understand the core principles of human brain performance. According to
N. Braidot (2009), there are three levels of human brain: reptilian brain, limbic sys-

150
tem, and cerebral cortex. Moreover, K. Vance and S. Virtue (2011) suggest that the
role of left and right cerebral hemispheres is very different in purchase decision mak-
ing. The left hemisphere is responsible for analytical, logical and rational thinking,
and is often based on numbers; conversely, the right hemisphere is committed to pro-
cessing of holistic information. The right hemisphere reacts to music, art, and other
creative elements.
Accordingly, it can be stated that those segments where price is important to
highlight a prestige of a luxury product, should be affected by numbers. The left hem-
isphere has to be activated before the right. Therefore, the expensiveness of a product
has to be highlighted over design, aesthetics and other creative elements. Conversely,
for those segments where price is not prestige-related, many creative elements have
to be applied first, achieving to hide the price form the left brain hemisphere (see
Fig. 2).

Fig. 2. Neuro insights for luxury marketing

As it is shown in Figure 2, publicity is the second important thing in luxury

marketing. For public-concerned segments (Bandwagons and Veblenians), public
opinion is important. Thus, a luxury should be well established for the society, posi-
tioned as status-symbol or something very exceptional. The place where the luxury
product is being bought (or consumed) has to be noticeable, observable by others
(e. g., town centre, main street etc.).

151
 Conclusions

1. Scientific analysis revealed that luxury goods offer quality, emotion and
rarity to consumers. According to their priorities (values and related motivators) in
accordance to two core dimensions: person’s self-consciousness and the importance
of the perception of price as an indicator of prestige, luxury consumers can be
grouped into four segments: Bandwagons, Veblenians, Snobs and Hedonists & Per-
fectionists. According to the segment characteristics and product’s specifics, different
marketing mix strategies have to be applied.
2. Neuromarketing principles are based on human brain performance. Neu-
romarketing theory states that the role of left and right cerebral hemispheres is very
different in purchase decision making. The left hemisphere is responsible for analyti-
cal, logical and rational thinking, and is often based on numbers; conversely, the right
hemisphere is committed to processing of holistic information. The right hemisphere
reacts to music, art, and other creative elements.
3. While applying neuromarketing principles for a luxury, the sequence of
brain hemispheres performance has to be managed. For those segments where price is
prestige related, it has to be highlighted by minimising other environmental effects
mostly related to design and other forms of art. Whereas for those segments where
prices is not prestige-related, it has to be hidden from customer until the right hemi-
sphere starts to work. This can be assured by creative design, music, and other artistic
elements in the environment or product itself.

References

1. Atwal, G., Williams, A. (2009). Luxury brand marketing – The experience is every-
thing! // Journal of Brand Management. No. 16.
2. Braidot, N. (2009). Neuromarketing. – España, Barselona: Ediciones Gestion 2000.
3. Camerer, C., Loewenstein, G., Prelec, D. (2005). Neuroeconomics: How Neuroscience
Can Inform Economics // Journal of Economic Literature. Vol. XLIII (March).
4. Catry, B. (2003). The great pretenders: the magic of luxury goods // Business Strategy
Review. Vol. 14, Iss. 3.
5. Dapkevičius, A., Melnikas, B. (2009). Influence Of Price And Quality To Customer Sat-
isfaction: Neuromarketing Approach // Verslas XXI amžiuje. No. 1 (3).
6. Pilelienė, L. (2011). Neuromarketingo principai ir nauda organizacijoms: teorinis
aspektas // Management theory and studies for rural business and infrastructure development.
Nr. 5(29).
7. Pilelienė, L. (2012). Neuromarketingo principų taikymas kainodaroje: teorinis
aspektas // Management theory and studies for rural business and infrastructure development.
Nr. 1(30).
8. Vance, K., Virtue, S. (2011). Running Head: Hemispheric Processing of Slogans Brand
Familiarity in Advertisement Slogans: The Role of the Left and Right Cerebral Hemispheres // In-
ternational Journal of Marketing Studies. Vol. 3, No. 3.
9. Vigneron, F., Johnson, L. W. (1999). A Review and a Conceptual Framework of Presti-
ge-Seeking Consumer Behavior // Academy of Marketing Science Review. No. 9 (1).

152
 PRABANGOS PREKĖS MARKETINGAS: NEURO POŽIŪRIS

Lina Pilelienė
Vytauto Didžiojo universitetas

Santrauka

Lietuvos autorių moksliniuose darbuose pasigendama įžvalgų neuromarketingo tematika.

Tampa aktualu tyrinėti šios paradigmos taikymo sritis. Intensyvi produktų ir paslaugų teikėjų kon-
kurencija skatina verslo atstovus keisti požiūrį į rinką, atsisakant tradicinių mainais pagrįsto marke-
tingo priemonių ir keičiant pastarąsias subtiliais neuromarketingo įrankiais. Neuromarketingo tyri-
mai yra grindžiami žmogaus smegenų veiklos stebėjimu; jie paneigia daugelį šiuolaikinio marketin-
go idėjų, todėl galima teigti, kad modernios marketingo veiklos turi būti koordinuojamos, atsižvel-
giant į pasąmoninius procesus, vykstančius vartotojų smegenyse.
Siekiant nustatyti pagrindinius neuromarketingo principus, taikytinus vykdant prabangos
prekių marketingą, straipsnyje atlikta kokybinė mokslinės literatūros turinio analizė. Aprašant ana-
lizės rezultatą, apibendrintai pateikiamos neuromarketingo įžvalgos, taikytinos prabangos prekėms.
Raktiniai žodžiai: neuromarketingas, prabangos prekė, segmentas.
JEL kodai: M310, M390.

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