The Emotional Importance of Branding

by Jeremy Powers on August 4, 2010

Most small businesses are not interested in “Brand Equity.”  The idea that just the name, logo, or other brand elements of a company can be worth billions of dollars sounds too much like balance sheet hocus pocus.  You focus on selling more, producing more with less, and making more money.  However, brand equity can help you do all of these things.  A good reminder of the value of brand was posted at Farnam Street a few weeks ago.  The post is titled:  Mind Hack – Why do we prefer Coke over Pepsi?

Please take a minute to read it.  Here are some choice sentences:

“When the final results of this effort were tallied it was clear that people preferred Pepsi. So, by all accounts, Pepsi should be trouncing Coke but it wasn’t. Why?

Malcolm Gladwell outlined one theory in Blink.  He proposed that in small samples-“Sip Tests”-people choose Pepsi because it tastes sweeter. However, in real life, we don’t drink just have a sip and stop and there is a huge difference between a sip and a full can. Over the course of a can, the sweeter taste of Pepsi sent peoples blood sugar levels into overdrive. That, according to Gladwell, is why Pepsi won in the taste tests but Coke continued to lead the Market.”

The above theory about the volume of the soda given during the sip tests was one that was actually explained to me by a former Coke marketer.  It seems this is the solution the internal team at Coke subscribed to in their early analysis.  Originally, everyone thought the taste test was somehow faulty because the results did not mimmick marketplace preferences.  Here comes the cool part:

However, in 2003, Dr. Read Montague, the Director of Neuroimaging Lab at Bayer College of Medicine, decided to explore the test results through the lens of an fMRI machine. First, he asked the volunteers whether they preferred Pepsi or Coke. The results from this simple question mimicked the results of the Pepsi Challenge. The majority of people choose Pepsi. Their brains did too. While sipping Pepsi volunteers experienced a flurry of activity in the the ventral putamen, a region of the brain that’s stimulated when we find tastes appealing.

During the second stage of the experiment, Dr. Montague decided to let subjects know if they were sampling Coke or Pepsi before they consumed the beverage. The result: 75% of the respondents preferred Coke. Why?

Dr. Montague observed that in addition to a stimulated ventral putamen, blood flows were now elevated in the medial prefrontal cortex, the portion of the brain that, among other things, handles higher thinking and discernment. There was a tug of war going on between the rational and emotional spots in our brain. Emotions won. We drink more Coke than Pepsi.”

Taste, while important, is not what determines the most popular soda.  At this point, you probably believe this is not relevant to your business.  You do not have billions, millions, or even tens of thousands to invest each year in your brand.  Yet you know there are local companies with successful regional brands.  Here in Cincinnati, we have Skyline, Gold Star, Montgomery Inn, and Graeters.  Those are just a few of the Cincinnati food brands.  Regional branding works.  If you have never tried a true branding strategy, or have half-heartedly tried in the past, NOW is the time to reconsider the importance of brand.

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