Pepsi vs. Coke
Since 1975, PepsiCo has been hosting the Pepsi Challenge, in which Pepsi representatives give two unmarked cups to participants. One of the cups contains Pepsi, while the other contains Coke. In this blind test, it was found that a greater number of participants preferred Pepsi over Coke. However, Coke repeatedly reaps greater revenue (La Monica, 2002). Why is it that despite preferring the taste of Pepsi, people tend to buy Coke? How is it that although both sodas are very similar in composition, they elicit strong behavioral preferences for one over the other? Recently neuroscientists have started to study branding and have found that it has a great effect on our preferences. This can have several consequences on how companies advertise their products and also can affect how social messages are communicated to the masses.
In 2004, the lab of Read Montague, a prominent neuroscientist, conducted a study in which they created the Pepsi Challenge. In this study, functional MRI was used to determine whether advertising has an effect on people’s preferences and whether it has neural correlates. Participants were divided into two groups: one group did blind taste tests and the other was informed which brand they tasted. In the blind taste test group, an equal number preferred the taste of Pepsi and Coke, suggesting that the market share should be equal. However, this is not the case. In the informed group, Coke was the preferred soda, suggesting that brand influences one’s preferences. The researchers found that two different systems are can be implicated in generating the different preferences between the two groups. In the blind taste tests, different responses were induced by Pepsi and Coke in the ventromedial prefrontal cortex, which is known to be one of the brain’s reward centers. Those who preferred Pepsi had a much larger response, than those who preferred Coke.
For branded testing, the participants were informed which brand of soda they were drinking. This time, almost all participants said they preferred Coke. This finding resonates the real life phenomenon of people preferring Coke, indicating that they are influenced by its brand. When the results from the fMRI were analyzed, it was fond that more areas of the brain were activated, including the bilateral hippocampus, parahippocampus, midbrain, dorsolateral prefrontal cortex, thalamus, and the left visual cortex. The prefrontal cortex is known to play a role in cognitive control and working memory, suggesting that Coke evokes memory and feelings about the brand to influence and perhaps even form preference for it. Another finding was that participants preferred Coke more when the brand was shown than when it wasn’t shown. This suggests that the taste has very little to do with our preference, since here the taste was exactly the same. This effect was not present for Pepsi, further suggesting that Coke’s brand greatly influences our taste.
This has raised many more questions in my mind regarding branding. What exactly is it that is so appealing to people about Coke and brands in general. Is it the red can? It is the celebrities that endorse it? I know that in India celebrities elevated to a very high position and people are willing to buy certain brands (among other things) over others depending on who is endorsing it. This has created an even more intense rivalry between Pepsi and Coke in India in which both try to get the most popular celebrities to endorse their products. I would like to see the results of a similar study done using Indian participants to see if there are neural correlates of strong preference for one celebrity and their preference for the product he or she endorses. Perhaps this can be done by showing a picture of the celebrity with the drink instead of the brand.
There are several implementations of this research that come to my mind. Effective advertising campaigns can be designed for various social issues, such as discouraging smoking and drunk driving or encouraging people to vote, volunteer, or donate to important causes. Commercials can be tested out in volunteers using fMRI to see which are the more effective.
In fact, Montague’s study caused further research to be conducted and now a new field called neuromarketing is emerging, in which people’s responses to advertisements are measured through techniques such as fMRI and EEG to determine consumer preferences. This is an interdisciplinary field combining neuroscience, psychology, economics, and mathematics among others. The research involves finding ways of making consumers identify with products. The BrightHouse Institute conducts research in neuromarketing. In one of the studies, participants are shown several commercials while inside a fMRI machine. They found that if the commercial was advertising a product that the participants identified with, there would be increased activity in the medial prefrontal cortex. Perhaps soon all companies will have a neuromarketing division in which they scientifically test the effectiveness of their marketing campaigns.
Sometimes we see commercials that attack competing brands (although these are often banned). There are some Pepsi banned commercials that explicitly attack Coke. What effects, if any, do advertisements these types of advertisements have? Are they fruitless since they are not engaging the consumer in making a personal connection with their brand? Or do they play a role in disengaging the consumer from the brand they are attacking?
Neuroscience techniques have shown that branding is a powerful tool. While it is not completed understood what are the exact elements that attract consumers, branding can be used for effective marketing and to make a difference in society. In addition, this research can lead to insights on the neural correlates of preference.
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The New York Times. 5 May 2009
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