Just returning from a conference in Hong Kong, in which I heard a senior executive speak about the challenges ahead for tobacco companies facing the introduction of plain packaging. To answer the questions as to how this will impact on consumer behaviour, e.g. whether customers will down-trade for cheaper alternatives, how loyalty will develop, how new smokers will make their brand decisions, etc, he presented the audience with a consumer survey they had conducted.
Comforted by the sample of 500 consumers who provided answers to these various questions, the presenter reassured the audience that they didn’t expect any significant down trade or changes in consumer behaviour caused by the plain packaging, because, as consumers had consistently told them, they would largely just stick to the brand they always liked, because ‘you just know the taste of your cigarette, it just tastes different, and you would never go with anything else.’
While this might be true for habitual smokers, how does this play out for ‘newcomers’? And over the decades, as the brand stories fade in consumers’ minds – will the brand choice still be a matter of taste?
This is a much debated topic with an array of opinions. From a neuromarketing perspective these are very interesting questions. As comforting as these results may seem for internal stakeholders in the short term, they have to be handled with caution.
Neuromarketing experiments consistently suggest that there is a strong correlation between the (brand) story we tell our brain and our perceived reality, in that case the perceived physical taste. In other words: How strongly is our perception of taste biased by the emotion evoked by a certain brand? And what happens to brands and their premium price points if they can’t be associated with these emotions?
Let’s take another product, to contemplate these questions. Maybe the most everyday product of all: Water. Would you, dear reader, pay a thousand times more for a product than it is actually worth? ‘Certainly not’ would be your answer, simply the idea sounds like an offence. After all, we believe we make our decisions consciously and intelligently.
Now, if you are fortunate to come from a region where tap water is of the same quality as bottled water, your litre of tap water costs an average of 0.002 cents. In fact, food chemists assure us that in most regions in Australia, tap water is as good as bottled water. According to Canadian research, tap water can even contain fewer bacteria than bottled water! However, in the supermarket, we pay already at least $2.50 per litre of bottled water, an increase by the factor of 1,250!
Now you go to a really nice restaurant and order a bottle of sparkling Italian water with your wine at $10. Why? Because you love the fresh, crisp taste, the Italian inference, your company tonight, and the waiter serving it in a rather distinguished way.
This time, let’s not select the even fancier ‘Bling H2O Water’ that’s also on the menu, after all we are not dining with George Clooney tonight. Although you wondered about choosing it for a minute, not because Paris Hilton’s dog Tinkerbell apparently also enjoys it, but because the couple sitting on the next table, sparkling over the sparkle of the Swarovski crystals on the cobalt blue, frosted Bling H2O bottle are getting a lot of attention. Of course you are more reasonable and at least choose the factor 5,000 option over the factor 45.000 option, which ‘Bling’ offers at its price point of $90 (!), compared to tap water.
Check out this entertaining short video, which plays with our perceptions of taste relative to the brand story we are told when it comes to these water brands. It showcases how dependent our perception of taste – and, accordingly, the choices we make – are to the story we are told and the emotions the story subconsciously evokes.
The oldest, and probably best-known experiment on that topic is the Pepsi vs. Coke test, where the majority of consumers claimed to prefer the taste of coke as long as they associated it with the brand, whilst Pepsi clearly led the taste challenge in the blind test – clearly evidencing the point that our perception of taste is biased by our perception of brand.
So smokers, connoisseurs of water and drinkers of soft drinks, and all of us as consumers share one communality, no matter the product: no emotions = no dollars!
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Katharina Kuehn is director of RDG Insights, a subsidiary of Retail Doctor Group, which provides retailers and brands with the missing link between understanding the real drivers of consumer behaviours and informing the strategic branding and operational implications at the point of sale. “Innovative consumer insights are vital to the development and implementation of a truly differentiated brand strategy. How we as humans interact with brands in a meaningful and loyal way underpins the growth and profitability of all businesses.”