Nestle’s Neuro Marketing

It is common for people to confuse products with brands and think that brands are created in factories. However, products are only made in factories, while brands are created in your mind. Although we consider ourselves logical and capable of making rational decisions, a lot of our daily decisions are made our instinctive subconscious part of our brain also known as reptilian brain.

Now let’s look at one such example in marketing:

In the late 1970's Japan’s economy was about to take off and Nestle was finding a way to monetize it, obviously the option they prefer was coffee but it was no secret that Japanese consumers have affinity towards tea. This caused Nestle to test the market cautiously before launching its coffee. They run several tests and made focus groups and asked questions to people from different age groups what they thought of nestle coffee. It surprised them that the tests were successful and Japanese people liked coffee. Nestle executives were eager and prepared to roll out coffees to every store and run several marketing campaigns to get people's attention huge sums were spend on marketing and distribution, but to their surprise, there wasn't much sales of coffee.

Nestle executives were eager and prepared to roll out coffees to every store and run several marketing campaigns to get people's attention huge sums were spend on marketing and distribution, but to their surprise, there wasn't much sales of coffee. It made no sense for the company all the reports were in favor of nestle but they couldn’t really sell their product the problem being that Japanese liked coffee but did not prefer it over tea. To solve this huge problem made a decision to bring in Clotaire Rapaille who was a superstar in marketing. Clotaire Rapaille was no normal marketer but he was a child psychiatrist who spent years working with children who had autism. This experience made him realize one thing that people can tell you what they want but the real desires that shaped human decisions were unconscious one and very few people were aware enough to understand them. He called it the reptilian instinct. When Cloitaire arrived he did not take much time to realize that Japanese consumers had no connection to coffee as the kids have always seen their parents drink tea , So they subconsciously have developed an attraction towards tea rather than coffee. To tackle this problem, Cloitare came up with a solution where he asked nestle to manufacture coffee candys so that the kids actually get to know the taste of coffee and build a connection with it. This eventually encouraged to the kids to scale up and buy sugary coffee flavored drinks and then to cappuccinos and latte' and before they knew it they started to drink big steamy mugs of coffee.

This graph over here shows you the rise in the imports of coffee in Japan over the years. Over the years, Japanese coffee imports have grown from 75,000 tons in 1970 to over 4,00,000 tons in 2007.That sums up to CAGR(compound annual growth rate) of 5.5 percent. This is how nestle has built a market for coffee and monetized it in a country where everyone used to drink tea. This is the secret power of neuromarketing.

-- Yaseswi