The report by the Family and Parenting Institute also recommends advertising on websites used by children should be clearly marked as promotional material, particularly advergames, and urges businesses to promote positive messages to kids.
The study also highlights some of the ways companies target children and challenge current regulation by pushing expensive products that are out of reach of the average family budget.
Mary MacLeod, chief executive of the Family and Parenting Institute said: "Parents tell us they are constantly put under pressure by their own children for the latest must have toy or computer games.
"This can cause family arguments as parents tell their kids that they can't have everything they see advertised on TV or online.
"It is important that regulation is adhered to and businesses should work together to make sure that it is."