FROM PERCEPTION TO THE PLACEBO EFFECT AND ILLUSION
	With comments about tea
www.neuromarketing-labs.com/services/neuropricing/the-starbucks-study/

FROM PERCEPTION TO THE PLACEBO EFFECT AND ILLUSION With comments about tea

The word placebo is normally used to convey that a medical treatment has been replaced with a neutral dose with no chemical component that can cause a physical change to the patient. I want to use the word placebo in exactly the same sense that the cup of coffee does not change in any way but that the consumer interprets the taste and flavor which bears no resemblance to its actual characteristics. In other words, the consumer has a normal cup of coffee in front of them but is under the impression that they are drinking something different in character. The trick effect on the brain when the medical placebo is taken is very similar to the trick effect on the brain when a perception is applied. The cup of coffee stays the same but the rush of blood to the brain changes with the presentation of different perceptions as when the cup of coffee is served in a paper, plastic, enamel, earthenware, stainless steel and finally fine ceramic cup.

So far we have looked at the bean and how it is transformed into the cup ready to drink. There has been an examination of the different factors that change the perception of the bean from what it actually is. It is my contention that the gap between what the experts taste and the ordinary consumer is enormous. The consumer is not in a sterile room devoid of outside influences capable of registering every nuance of flavour but just wants something called a cup of coffee. The most interesting question in the history of coffee is how and why it has remained so popular over almost four centuries even though the first cups of coffee were probably bitter and almost undrinkable. The improvements in the coffee process have been in fits and starts until it is now possible to say that most consumers have the ability to make a reasonable cup of coffee.

Tea is transformed from the plucked leaf into tea in many different forms. Tea has been around for much longer than coffee and has remained popular in the East forever.

The most interesting question is to understand how the industry has been structured in so many different ways in so many different countries and the answer is I believe the placebo effect which has been manipulated by the strong and powerful players to achieve what they want. Their hidden message is designed to convince you that the cup of coffee you are drinking which might be quite ordinary is in fact special and can only be created with their special beans and machines.

I think it is instructive to see the thought process that brought me to this novel conclusion. I was watching a television program and had a light bulb moment as one of the commentators, Jo Marchant, began talking about the placebo effect. I had actually written about the placebo effect a few days earlier but her comments confirmed what I had been thinking. I contacted her and received confirmation that I was on the right track.

I contacted her with the following statement:

‘The constant chatter about coffee raises the problem for a lot of consumers that somewhere there is a better cup of coffee out there and even the perfect cup of coffee if they can get it just right. Whatever they are doing can be improved by taking into consideration a lot of factors. These act as placebos. Because the consumer is not able in fact, in a blind testing, to detect that there is a problem, the placebo works. The placebo causes the release of pain-relieving or pleasure producing endorphins in the brain to reinforce the idea that the new coffee is better if not perfect.

Example – A customer has the choice of using

1.  A cheap Blend in an old, cheap espresso machine OR a cheap tea in a simple cup

2.  An expensive coffee in a $2,000 espresso machine. OR an expensive tea in fine porcelain.

In a blindfolded test he cannot tell which is better but when given the two coffees and teas and their descriptors, perceptions sway his opinion, the placebo effect kicks in and the customer definitely prefers the expensive coffee when given the choice.

Jo Marchant’s reply was,’ Placebo effects do influence our perception of taste and smell, and yes, if someone believes that a particular coffee (or wine, or perfume, or whatever) is more expensive, then they may prefer it to an alternative that they believe is cheaper (even if the two are in fact identical). But this isn't necessarily working through the same biochemical mechanisms as placebo analgesia. There are lots of other mechanisms, for example the release of dopamine (a neurotransmitter involved in desire/reward) that may be more relevant when it comes to tasting coffee.’ If the word ‘placebo’ is not strictly correct, then the words ‘placebo effect’ conveys the same meaning.

In a tasting test, subjects were asked to evaluate a prestige brand wine and a budget brand. ‘When tasting from the prestige brand bottle they rated the wine quite positively. Of course, the researchers gave them the same wine in both cases, so that what they tasted was completely determined by their brand expectations. Using a neuromarketing approach the same experiment was repeated with consumers having their brains scanned in a functioning magnetic resonance imaging while they enjoyed their wine. The results were quite stunning. Participants actually experienced the taste of the wine differently when it was presented as a prestige brand instead of a budget brand’. [i] The brand creates the placebo effect.

The human brain responds to things that have given pleasure in the past by releasing dopamine in their brains when it appears again. This explains how consumers remain faithful to brands and situations over a long time.[ii]

I remember that many years ago I entered into a brewing competition at a local Specialist Coffee Association event. I was at least twice the age of all the other competitors. I had seen the antics that go on at the Barista championships so I was a little bit prepared for what happened when the other competitors started making coffee with dramatic performances explaining what they were doing. Most of them seemed to be using Aeropress brewers with different procedures and different results and one even used an Aeropress to make half the coffee and another brewer to make the other half. I was using a simple device using a 60 μm (micron) filter and pouring boiling water over finely ground coffee. None of the judges had ever seen anything like it before and were probably confused as to how to evaluate it. When the results were announced I came a resounding last and I wondered to myself what the judges had been seeking since some members of the audience who tasted my coffee had come to me and said it was the best tasting coffee of all. The Aeropress had captivated their imaginations as a brewer which somehow made very good coffee in their eyes. I now believe the result was determined by perceptions and placebos.

 

All in all, the senses influence our emotions and decision-making. Touch, smell, taste, sound, and the look of a product all play an important role in our perceptions, attitudes and consumption of a product. Understanding those roles provides a valuable advantage in today’s marketplace.

A few ideas from Jo Marchant’s book, Cure: A Journey into the Science of Mind over Body will demonstrate the importance of the placebo effect. 

This is the problem with placebo effects – in trials they are elusive and ephemeral, rarely disappearing completely but often altering their shape. They change depending on the type of placebo and they vary in strength between people, conditions and cultures. For example, the percentage of people who responded to placebo in trials of a particular ulcer medication ranged from 59% in Denmark to just 7% in Brazil. The same placebo can have positive, zero or negative affects depending on what we’re told about it and the effects can change over time. Such shifting results have helped to create an aura around the placebo effect, as something slightly unscientific, if not downright crazy.[iii]

The placebo effect was achieved by a clinician wearing a uniform of some sort delivering four different injections. It was the clothing that made the difference. [iv]

One of the big barriers to using placebos in medicine is the concern that it is unethical to deceive patients. [Coffee and tea companies have so no such barriers.]

A company in England sells placebos. ‘The products are not cheap at between £10 and £25 but as the website points out studies show that the more a product costs the better it works’.[v]

The perception that you pay for what you get applies.

Studies suggest that anything that helps to create the impression of a powerful, potent notification will produce a stronger effect.

‘A pill with a recognizable brand name stamped across the front is more effective than one without.’ [vi]

In a test of placebos for Irritable Bowel Syndrome (IBS), in the no-treatment group, ‘28% of patients said they got adequate relief from the symptoms just from being in the trial. Of those who got placebo acupuncture alone, 44% got adequate relief. In the group that received both acupuncture and empathic treatment, that figure jumped to 62% – as big an effect has ever been found for any drug tested for IBS.’ [vii]

I am suggesting that the coffee drinker approaches a cup of coffee with a list of requirements; the brand, ecology, made with a certain machine, served in a special cup, served in the right sized cup, with a special pattern on the frothed milk, etc. - as each one is mentally ticked off so the placebo effect rates the experience that is coming and that is the placebo effect.

In an article, ‘Dollars and Sense: The Impact of Multi-Sensory Marketing’ the following appeared:

Now, imagine what would happen to the ambience if Starbucks chose to change any of its delivery methods—paper plates and plastic forks for the bakery, for example, or automatic coffee machines that eliminated the need for steam-frothed milk. Customers would not only see and feel the changes, they would hear them. The ambience would be perceptively changed and incongruent with the brand’s upscale image.[viii]

Peter Giuliano writes in ‘The Power of Expectation, or, Coffee and The Placebo Effect ‘:

They also preferred Coke labelled “Coke” to Coke in an unlabelled cup. When researchers did MRIs on these people, they found that their brains actually responded in a different way after being exposed to the “Coke” brand, with stronger signals in the part of brain connected to “appetitive aspects of reward”; i.e. the positive feeling of satisfaction of bodily needs.

All of this supports the idea that expectations are powerful- and they actually change the perception of things we taste. The interaction of the coffee professional- the barista or coffee merchant - is absolutely essential: not just in preparing a delicious cup or roast, but in building context and expectation.

A complete coffee/tea experience is a multifaceted event, which includes thoughtful engagement, aesthetic context, tactile experience, and finally flavor and caffeine stimulation. Of course, some of us know this intuitively: most great coffee professionals put great care into the way they introduce a coffee to the consumer: the coffee’s name, the environment of the coffee space, the kind of cup, and the nonverbal cues which accompany the coffee’[ix]

Biometrical tests also measure a wide range of physiological body responses – facial expressions, facial muscle movement, skin conductance due to perspiration, heart rate, blood pressure and respiration that can be used across most marketing areas. [x]

Neuroscience and neuromarketing

‘In 2001, there were just two firms billing themselves as experts in the techniques of what is now called neuromarketing – the word neuromarketing appeared only in 2002. There are now more than 300 such companies alongside neuromarketing departments in more traditional research companies. There are university degrees in the subject’. [xi]

Marketing techniques commonly used in advertising research include

1.  Eye tracking and EEG brain wave measurement to track attention

2.  EMG to track momentary emotional reactions by measuring microbial movements of facial muscles.[xii]

It follows directly from knowing that placebos exist to being able to measure impulses in the brain using electroencephalog raphy (EEG) and other scientific devices. The fact that EEG devices are becoming very inexpensive means that they will eventually become widely used to help the coffee industry design its responses for maximum profitability.

The effects of store lighting on the other hand are so very pronounced that researchers found it was possible to control the time consumers spent examining products and the number of items they looked at purely by adjusting the level of brightness.[xiii] There is even speculation that even the design of the shops front door can influence purchasing decisions. [xiv]

 In an experiment, changing the font from Courier to Lucida Calligraphic on a tin of soup was enough to persuade consumers that the soup was tastier, fresher and more enjoyable. [xv]

A psychologist, Dr. Ernest Dichter, understood that what a product was used for and how it looked were of course important in a way, but it was the ‘gestalt’ or personality of objects ‘the soul of the product’ as he put it, that really mattered when it comes to our hidden motivations.[xvi]

It is interesting to note the great success of Starbucks in countries where espresso coffee was hardly known – USA, UK, China etc. and it’s almost non-existence in countries where espresso culture was already deeply established such as Italy and Australia.

The following examples use information relating to Starbucks.[xvii] I imagine they were happy for to be released on the basis that it probably wasn’t much use to the competition. Even though there is no published information about other companies, you can be sure they are using the same techniques. The largest coffee companies with their huge resources will continue to do research to maintain their positions against their competitors. As our understanding of the human brain improves in leaps and bounds so will our understanding of human behaviour and how it relates to the whole coffee experience.

An article in the Wall Street Journal, [xviii] “Using scent as a marketing tool, stores hope it--and shoppers--will linger” demonstrates the lengths beyond the coffee itself that Starbucks has gone to improve business.

Starbucks went to great lengths to make sure odours conflicting with coffee were removed from their stores. Starbucks created an aroma task force to fix the odour problem.[xix]

‘Starbucks certainly understands the olfactory benefit of scent – “an atmosphere really special, the coffee smell, it has a certain something that makes you feel comfortable, relaxed.” The smell of coffee is not accidental, it comes from fresheners placed strategically to ‘invite’ us to fancy a coffee in a very subtle way.[xx] The Starbucks’ music selection is a key in order to create this atmosphere that invites to relax while you are reading the newspaper, have a chat with your friends or even work with your laptop.

In other words, companies, like Starbucks, that are more concerned with increasing the spend-per-customer ratio, use slower music to create longer dining times, leading to a 29 per cent increase in the average bill according to one experiment.

The Starbucks-Study [xxi]

To measure the willingness-to-pay, we ran a university funded study.

‘We asked subjects to come to the lab and recorded their EEG. On a screen we presented them with the price for a small cup of Starbucks coffee. Immediately after that we showed them a either the word “cheap” or “expensive”.

 The subject then either agrees or disagrees via button press, thus telling us whether he or she perceived the price as cheap or expensive. This way we were able to record the brain response to the price and to the attributes expensive and cheap.

In the following graph one can see the brain response to the presented price. It is one component of the immediate brain response, which is strongest when the price is reasonable. However, when the brain had to process unexpected prices, feelings like shock, doubt or surprise surfaced.

 

We were able to visualize their equivalents in the EEG data via a series of complex analyses. As you can see in the graph, the brain reacts stronger to a matching price than to one that doesn’t fit. The strength of the brain response at the different electrode positions is illustrated in colours.’

I am confident that everything that applies to coffee applies equally to tea and perhaps more so because I have seen tea available in Shanghai for $1200 per Kg.

 


[i] Stephen J. Genco, Andrew P. Pohlmann, Peter Steidl, Neuromarketing for Dummies, p. 39

[ii] https://www.cell.com/current-biology/abstract/S0960-9822%2816%2900043-9

[iii] Jo Marchant. Cure: A Journey into the Science of Mind over Body, 2016, p.29

[iv] ibid., p.30

[v]  Ibid., p.33

[vi] Ibid., p.34

[vii] ibid., p.45

[viii] https://info.4imprint.com/wp-content/uploads/blue-paper-sensory-marketing.pdf

[ix] Pax Coffea. Peter Giuliano's Coffee Blog November 4, 2012 ‘The Power of Expectation, or, Coffee and The Placebo Effect’ https://tmblr.co/ZeAmmxWc50pb

[x] Stephen J. Genco, Andrew P. Pohlmann, Peter Steidl, Neuromarketing for Dummies, p. 291

[xi] James Garvey, The Persuaders, p.192

[xii] Stephen J. Genco, Andrew P. Pohlmann, Peter Steidl, Neuromarketing for Dummies, p.47

[xiii] James Garvey, The Persuaders, p. 195

[xiv] Ibid., p.185

[xv] Ibid., p. 196

[xvi] Ibid., p. 162

[xvii] https://informationsnippets.blogspot.com.au/2011/05/starbucks-marketing-experience.

[xviii] https://www.wsj.com/news/articles/SB10001424052702303468704579573953132979382

 

[xix] Howard Schultz and Joanne Gordon, Onward: How Starbucks Fought for Its Life without Losing Its Soul, Rodale Books, Emmaus,2011

[xx] https://neuroexpression.wordpress.com/category/neuromarketing/

[xxi] https://www.neuromarketing-labs.com/services/neuropricing/the-starbucks-study/



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