Neuromarketing: How company’s hack your brain for profit

 Have you ever walked into a shop and felt that a product called your name the second you set your eyes on it? Maybe the way it looked, maybe the fact that it was 20% off or maybe for no reason at all? If so, you may have fallen victim to neuromarketing, the latest trend for firms trying to get you to buy their products. This begs the question; what is neuromarketing?

 

Marketing has existed for centuries, but only recently have the world’s biggest firms applied neuroeconomics to the field. Neuroeconomics focuses on the core of human decision making to analyse economic behaviour; the brain. fMRI scans, EEG scans and other futuristic-sounding tech have been applied to decode our wants and needs. Firms such as TikTok, Amazon and Coca-Cola utilise these findings to create better algorithms to stimulate our purchasing of their products, sending signals to our brains pushing us to buy their goods. Innovation or manipulation; who knows?

 

In this post, we will break down neuromarketing bit by bit. We will discuss the neuroeconomic behavioral concepts behind the scenes, such as “loss aversion” and “prospect theory”, how these biases affect our preferences and thought processes behind our consumption, and how neuromarketing thrives by taking advantage of these biases.

 

« Loss Aversion: Why We’re Afraid to Miss Out

Think back to when you hurriedly clicked "buy now" after seeing phrases like "only 3 left!" or "sale ends today!" Did you really need that item, or were you just anxious about missing out? This powerful psychological force is known as loss aversion, a cornerstone of behavioural economics identified by Daniel Kahneman and Amos Tversky’s famous Prospect Theory.

Loss aversion means we feel the pain of losing roughly twice as strongly as the pleasure of gaining. Businesses leverage this insight through scarcity tactics—phrases like "limited stock available" or countdown timers—that trigger anxiety and urgency. Neuromarketing research, using EEG and eye-tracking, confirms these scarcity cues activate brain regions linked to stress and impulsive decision-making.

Lottery marketing illustrates this perfectly. Despite minimal chances of winning, people continue to play because the fear of missing a life-changing jackpot outweighs rational thinking. Consider your own purchases: how many were genuinely needed, versus how many were driven by the fear of future regret?

« The Right Price: How Neuromarketing Influences Purchase Behavior 

Pricing greatly influences consumer behavior, and neuromarketing shows how psychological biases affect and influence choices to buy. Ideas such as price anchoring, the left-digit effect, and the discomfort of paying influence consumer perceptions of value.Customers use the first price they see as a point of reference, a process known as price anchoring. When the initial price is high, a lowered price appears more appealing. A cost of $9.99 feels considerably cheaper than $10 because of how the brain interprets numbers. This phenomenon is known as the Left-Digit Effect. Businesses employ bundling or subscription models to minimize this suffering because the study indicates that spending activates pain areas in the brain. Pricing strategies are in line with consumer surplus and price elasticity of demand from a microeconomic perspective.

Figure 1: Price Elasticity of demand and Neuromarketing Influence

The graph shows the difference between elastic and inelastic demand.  A slight price increase decreases the quantity demanded when demand is elastic (luxury items).  Conversely, inelastic demand shows that buyers of essentials continue to purchase products even when prices rise.

To maximize profits, firms establish rates that allow customers to feel valued without being overestimated. Businesses can use neuromarketing data to optimize pricing tactics that promote sales while retaining perceived fairness.

«  Attention & Visual:

Consumer attention is a precious resource, therefore visual appeal is an aspect of influencing purchasing decisions. Using eye-tracking technology, neuromarketing studies demonstrate how color, style, packaging shape, and imagery impact customer behavior by directing subconscious preferences. Businesses optimize packaging from an economic perspective to increase perceived value and reduce cognitive overload. Consumer willingness to pay is influenced by the prospect theory (highlighting possible gains, such as "30% more") and the scarcity effect (e.g., limited-edition packaging). A well-designed box can influence demand, making buyers more inclined to choose a product even if it is more expensive than competitors. 

For example, Chips Ahoy altered its packaging after research revealed that the prior design lacked visibility and engagement. Increased sales resulted from the brand's efforts to improve consumer attention and purchase intent by refining colors, improving text accessibility, and making the cookie image livelier.

« Neuromarketing Ethics: Persuasion or Manipulation

Should companies be allowed to know what your brain wants better than you do—and then use that information to influence you?

This ethical question is crucial in neuromarketing, where sophisticated neuroscience methods now enable firms to pinpoint exactly what grabs attention, evokes emotions, and increases desire. This deep understanding often surpasses consumers' own awareness, creating significant information asymmetry—highlighting a classic economic issue: the principal-agent problem. Here, businesses (agents) use privileged information to subtly influence consumers (principals), sometimes prioritizing profits over consumers' interests.

Take the Pepsi Challenge: in blind tests, Pepsi was preferred, yet when brands were revealed, Coca-Cola consistently won. Neuroscience revealed Coca-Cola's branding activated emotional and memory-related brain areas, showing choices were driven by brand-induced feelings rather than taste alone.

This raises concerns about informed consent. Consumers usually don't realise their subconscious reactions are monitored and exploited—especially troubling for vulnerable groups like children or anxious individuals.

What have we learned?

In this blog, we have taken a deep dive into the mystery of neuromarketing. We’ve discussed the neuroeconomic theory behind company’s marketing decisions, such as loss aversion and the “Left-Digit Effect”, and we’ve also discussed the ethical grounding of neuromarketing through the idea of “informed consent”.  We hope this blog has given you a basic introduction to this topic, the economic theory behind it and the ethical problems surrounding it; is it simply an innovative revolution in marketing or something more sinister? At least it gives you something to think about next time you’re shopping!

Reference

·         Kahneman, D. and Tversky, A. (1979). Prospect theory: an Analysis of Decision under Risk. Econometrica, 47(2), pp.263–292.

·         Elsevier.com. (2025). Redirecting. [online] Available at: https://linkinghub.elsevier.com/retrieve/pii/S0896627304006129 [Accessed 3 Apr. 2025].

·         Tomas, D. (n.d.). 10 Neuromarketing Examples and Studies. [online] www.cyberclick.net. Available at: https://www.cyberclick.net/numericalblogen/-neuromarketing-examples-and-studies.

·         ‌Juicebox Interactive (2018). The Pepsi Challenge: How Pepsi Won the Battle but Lost the Challenge. [online] Juicebox Interactive. Available at: https://juiceboxinteractive.com/blog/how-pepsi-won-the-battle-but-lost-the-challenge/.

·         Lee, N., Broderick, A.J. and Chamberlain, L. (2007). What is ‘neuromarketing’? A discussion and agenda for future research. International journal of psychophysiology: official journal of the International Organization of Psychophysiology, [online] 63(2), pp.199–204. doi: https://doi.org/10.1016/j.ijpsycho.2006.03.007.