I spend a several hours every week reading different newsletters on a variety of investment, business and marketing topics. Here’s an interesting piece on the value of branding.

If what people feel and remember about your business is positive and translates into more loyalty and sales, you’ve just made your business more valuable. Here is an example which opened my eyes even wider to the importance of branding.

On a news television show I watched recently, a test was performed on children and their breakfast choices. The first test involved placing a banana and a cupcake in front of the child and asking which they preferred to eat. In the test, they placed stickers of popular cartoon characters such as “Shrek” and “Spongebob” on the banana and left the cupcake plain. Almost all the kids chose the banana for what they would prefer to eat for breakfast.

In a second test, they placed a rock (yes, I said rock) with stickers on it and a plain banana in front of the child. Almost all of the children said they would prefer to eat the rock for breakfast!

How many of you subconciously buy stuff solely based on the branding? Clothes, food products, electronics and maybe even investments are made on our perceived value of the item and not on its actual merits or even our needs.

Why is my wife willing to spend more for jackets just because they have a tag on the inside which says its from some high-end clothing store? Or for sweatpants which have sparkly BCGC studs across the rear?