IELTS reading

Many ignore trends in their innovation strategies or adopt a wait-and-see approach and let competitors take the lead. At a minimum, such responses mean missed profit opportunities. At the extreme, they can jeopardize a company by ceding to rivals the opportunity to transform the industry. The purpose of this article is twofold: to spur managers to think more expansively about how trends could engender new value propositions in their core markets, and to provide some high-level advice on how to make market research and product development personnel more adept at analyzing and exploiting trends. Which of the following statements correlates with the content of the passage?

• Rivaling companies spur each other to set their own trends.

• Managers are often reluctant to yield to trends.

• Companies are running a risk of jeopardizing their reputation.

• Companies are being transformed by their competitors.

A further example of this strategy was supermarket Tesco's response to consumers' growing concerns about the environment. With that in mind, Tesco, one of the world's top five retailers, introduced its Greener Living program, which demonstrates the company's commitment to protecting the environment by involving consumers in ways that produce tangible results. For example, Tesco customers can accumulate points for such activities as reusing bags, recycling cans and printer cartridges, and buying home-insulation materials. Like points earned on regular purchases, these green points can be redeemed for cash. Tesco has not abandoned its traditional retail offerings but augmented its business with these innovations, thereby infusing its value proposition with a green streak.

• It was not the first time that Tesco had implemented such an initiative.

• It succeeded in drawing in a more eco-conscious clientele.

• Its main aim was to raise consumers' awareness of environmental issues.

• Tesco was not compelled by the programme to modify its core business activities.

A more radical strategy is 'combine and transcend'. This entails combining aspects of the product's existing value proposition with attributes addressing changes arising from a trend, to create a novel experience - one that may land the (company in an entirely new market space. At first glance, spending resources to incorporate elements of a seemingly irrelevant trend into one's core offerings sounds like it's hardly worthwhile. But consider Nike's move to integrate the digital revolution into its reputation for high-performance athletic footwear. In 2006, they teamed up with technology company Apple to launch Nike+, a digital sports kit comprising a sensor that attaches to the running shoe and a wireless receiver that connects to the user's iPod. By combining Nike's original value proposition for amateur athletes with one for digital consumers, the Nike+ sports kit and web interface moved the company from a focus on athletic apparel to a new plane of engagement with its customers.

• It was the type of strategy that would not have been possible in the past.

• It was the kind of strategy which might appear to have few tangible outcomes.

• It was a strategy that only a major company could afford to follow.

• It was an extremely risky move at the time.

Marketing people are no longer prepared to take your word for it that you favour one product over another. They want to scan your brain to see which one you really prefer. Using the tools of neuroscientists, such as electroencephalogram (EEG) mapping and functional magnetic-resonance imaging (fMRI), they are trying to learn more about the mental processes behind purchasing decisions. The resulting fusion of neuroscience and marketing is inevitably, being called 'neuromarketing’.

• A description of the procedure

• A misleading name

• A potentially profitable line of research

• What is neuromarketing?

The first person to apply brain-imaging technology in this way was Gerry Zaltman of Harvard University, in the late 1990s. The idea remained in obscurity until 2001, when BrightHouse, a marketing consultancy based in Atlanta, Georgia, set up a dedicated neuromarketing arm, BrightHouse Neurostrategies Group. (BrightHouse lists Coca-Cola, Delta Airlines and Home Depot among its clients.) But the company's name may itself simply be an example of clever marketing. BrightHouse does not scan people while showing them specific products or campaign ideas, but bases its work on the results of more general f MRI -based research into consumer preferences and decision-making carried out at Emory University in Atlanta.

• Marketing an alternative name

• What is neuromarketing?

• A misleading name

• Broadening applications

Can brain scanning really be applied to marketing? The basic principle is not that different from focus groups and other traditional forms of market research. A volunteer lies in an f MRI machine and is shown images or video clips. In place of an interview or questionnaire, the subject's response is evaluated by monitoring brain activity. f MRI provides real-time images of brain activity, in which different areas “light up” depending on the level of blood flow. This provides clues to the subject's subconscious thought patterns. Neuroscientists know, for example, that the sense of self is associated with an area of the brain known as the medial prefrontal cortex. A flow of blood to that area while the subject is looking at a particular logo suggests that he or she identifies with that brand.

• Medical dangers of the technique

• A potentially profitable line of research

• An international research project

• A description of the procedure

At first, it seemed that only companies in Europe were prepared to admit that they used neuromarketing. Two carmakers, DaimlerChrysler in Germany and Ford's European arm, ran pilot studies in 2003. But more recently, American companies have become more open about their use of neuromarketing. Lieberman Research Worldwide, a marketing firm based in Los Angeles, is collaborating with the California Institute of Technology (Caltech) to enable movie studios to market-test film trailers. More controversially, the New York Times recently reported that a political consultancy, FKF Research, has been studying the effectiveness of campaign commercials using neuromarketing techniques.

• Drawbacks to marketing tools

• Broadening applications

• Medical dangers of the technique

• An experiment to investigate consumer responses

Whether all this is any more than a modern-day version of phrenology, the Victorian obsession with linking lumps and bumps in the skull to personality traits, is unclear. There have been no large-scale studies, so scans of a handful of subjects may not be a reliable guide to consumer behaviour in general. Of course, focus groups and surveys are flawed too: strong personalities can steer the outcomes of focus groups, and people do not always tell opinion pollsters the truth. And even honest people cannot always explain their preferences.

• Marketing an alternative name

• Medical dangers of the technique

• Drawbacks to marketing tools

• An experiment to investigate consumer responses

That is perhaps where neuromarketing has the most potential. When asked about cola drinks, most people claim to have a favourite brand, but cannot say why they prefer that brand’s taste. An unpublished study of attitudes towards two well- known cola drinks. Brand A and Brand 13. carried out last year in a college of medicine in the US found that most subjects preferred Brand B in a blind tasting fMRI scanning showed that drinking Brand B lit up a region called the ventral putamen, which is one of the brain s ‘reward centres’, far more brightly than Brand A. But when told which drink was which, most subjects said they preferred Brand A, which suggests that its stronger brand outweighs the more pleasant taste of the other drink.

• Broadening applications

• A potentially profitable line of research

• An experiment to investigate consumer responses

• An international research project

“People form many unconscious attitudes that are obviously beyond traditional methods that utilise introspection,” says Steven Quartz, a neuroscientist at Caltech who is collaborating with Lieberman Research. With over $100 billion spent each year on marketing in America alone, any firm that can more accurately analyse how customers respond to products, brands and advertising could make a fortune.

• A potentially profitable line of research

• An international research project

• Broadening applications

• Drawbacks to marketing tools