The Power of Branding

Here's a new way to try to get your kids to eat their broccoli: Wrap it in the golden arches packaging of McDonald's (NYSE: MCD  ) . Very funny, you might be thinking. Har, har. Well, wait a second -- this wasn't a silly suggestion I just made up. It's based on the results of a recently reported study.

Researchers presented several dozen children with a taste test, offering them various foods such as carrots, milk, and apple juice in both unmarked and McDonald's-branded wrappers. As you might expect, the McDonald's-branded foods received uniformly higher marks.

Think about what this means. It shows how powerful brands can be in our minds. A mere brand label can affect how we perceive something. According to the study, the children's perception of taste was "physically altered by the branding."

Keep this study in mind the next time you consider a purchase. If you find your eyes drawn to a Lexus, ask yourself whether it's really a better car for you than, say, a Toyota. Both car brands come from the same company, Toyota. But one might be trading more than the other on its brand value.

Marketing to kids
Also at issue here is how powerfully food and drink companies can attract young eaters and imbibers via their brands and advertising. If you find yourself worried about this, take some comfort in the fact that 11 leading food and drink companies recently announced new, self-imposed restrictions on marketing to children under age 12. Coincidentally (wink, wink), that announcement was made shortly before the Federal Trade Commission met to discuss limits on marketing food and drinks to children.

Makers of a variety of products have agreed to these restrictions. Beverage companies Coca-Cola (NYSE: KO  ) and PepsiCo (NYSE: PEP  ) will participate, as will cereal maker General Mills (NYSE: GIS  ) , candy company Hershey (NYSE: HSY  ) . Campbell Soup (NYSE: CPB  ) and Unilever (NYSE: UN  ) are also part of the agreement. Their plans include offering more healthful fare to youngsters and reining in the use of cartoon characters to sell unhealthful products, while employing them to promote more nutritious foods.

Learn more
Here are some other Fool articles that focus on the power of branding:

If you'd like to invest in companies with powerful brands, check out our Motley Fool Stock Advisor newsletter (you can try it for free). In it, Fool co-founders David and Tom Gardner recommend several impressive companies each month. For help in discovering some of tomorrow's big brands, consider test-driving (for free) our Rule Breakers newsletter.

Longtime Fool contributor Selena Maranjian owns shares of Coca-Cola, PepsiCo, and McDonald's. She was surprised to learn recently that lions have oily fur. Coca-Cola is a Motley Fool Inside Value recommendation. Try any of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.

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10/27/2016 4:00 PM
MCD $112.08 Down -0.03 -0.03%
McDonald's CAPS Rating: ***
CPB $53.00 Down -0.66 -1.23%
Campbell Soup CAPS Rating: **
GIS $60.72 Down -0.12 -0.20%
General Mills CAPS Rating: ****
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The Hershey Compan… CAPS Rating: ***
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PEP $106.63 Down -0.44 -0.41%
PepsiCo CAPS Rating: ****
UN $41.67 Down -0.20 -0.48%
Unilever CAPS Rating: *****