MIT. the Power of a Good Logo

8/12/2019 MIT. the Power of a Good Logo

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The Power of a Good Logo

Research HighlightOctober 22, 2013 Reading Time: 7 min

C. Whan Park, Andreas B. Eisingerich and Gratiana PolTopics

Marketing,Marketing Strategy

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Get our RSS FeedRecent research finds that effective corporate logos can have a

significant positive effect on customer commitment to a brand

andeven on company performance

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Imagecourtesyof Flickr userStuck in Customs.

Think about legendary brands such as McDonalds, Apple, Aflac, Michelin andStarbucks, and one of the first spontaneous associations is often with the brandlogo: the golden arches, bitten apple, Aflac duck, Michelin man or Starbucks
http://http/www.flickr.com/photos/stuckincustoms/6306983152/http://creativecommons.org/licenses/by-nc-sa/2.0/http://creativecommons.org/licenses/by-nc-sa/2.0/http://creativecommons.org/licenses/by-nc-sa/2.0/http://www.flickr.com/photos/stuckincustoms/http://www.flickr.com/photos/stuckincustoms/http://www.flickr.com/photos/stuckincustoms/http://www.flickr.com/photos/stuckincustoms/http://creativecommons.org/licenses/by-nc-sa/2.0/http://http/www.flickr.com/photos/stuckincustoms/6306983152/


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mermaid. Red Bulls two charging red bulls in front of a yellow sun differentiate itfrom numerous competing brands and signify the brands promise to provideenergy.

Differentiating your brand from others is critical to business survival. So iscommunicating the benefits of your brand. Our research suggests that brand logos

offer a viable, albeit often neglected, means to help brand managers achieve thesetasks. We found that the brand logo can be anintegratorof the marketing efforts ofthe brand, a reflectorof such effort and the icon of what the brand means to itscustomers. In short, a good logo can be a synthesizerof a brand that is readily usedby customers for identification, differentiation and positive associations.

In our research, we found that the enhanced identification benefit offered by abrand logo (in other words, making it easier to identify a brand in the sea ofcompeting offerings) has no significant impact on customer brand commitmentand only a small impact on company financial performance. In contrast, when theyexpress a brandssymbolic,functionalor sensorybenefits, logos have a significant

positive effect on customer commitment to a brand and thereby a significantimpact on company performance in terms of revenues and profits.

The goal of our research was to answer the following questions:

1. Which important benefits can logos offer other than enhanced brand identification,and how can logos influence customers brand commitment and companyperformance?

2. Which type of logo most effectively strengthens customer commitment andcompany performance?

3. Can brand logos promote the companys growth? Specifically, do brand logos helpbrand extensions succeed?To explore these questions, we first did several pilot studies in which we conductedface-to-face, in-depth interviews with customers of varying age, gender andethnicity, as well as with managers across different industries. The interviewresponses were coded by two trained coders. Our interview findings then informedthe formulation of questionnaire items, which were subsequently pretested with165 respondents. Our main study of 77 corporate brands from the Fortune 500involved 450 respondents, each answering questions about different and randomlyassigned brand logos. Tobins q, defined as a companys market value over thereplacement cost of its assets, was used as a measure of company performancebecause it is a forward-looking, cumulative measure that facilitates comparisons

across companies in different industries.

A Point of Connection

Throughout history, logos have been an important part of cultural and religiousrituals. Roman legions of the ancient Roman Republic proudly carried SPQR (forthe senate and the people of Rome) standards. Under the Meiji constitution, no


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one but the Emperor of Japan was allowed to use the Chrysanthemum or ImperialSeal. The Jolly Roger flag (with skull and crossbones) that ship crews flew toidentify themselves as pirates symbolized the pirates ferocity and willingness tofight until the bitter end.

As the visual representation of a brand, corporate logos have the potential to

communicate and reinforce a brands core values and principles, which we call itssymbolic benefits. Logos thus play a critical role in serving as a point of connectionbetween a company and its customers.

For example, Polo Ralph Laurens swinging polo horseman logo conveys thebrands exclusive, casual-chic style, while the logo of Patagonia, Inc., featuring amountain range against the background of the sky, helps the brand communicateits connection to the environment and free-spirited ruggedness. Nike Inc.s swooshlogo visually communicates activity, flow and energy. Even the word swooshstands for moving with or making a rushing sound. The tagline Just Do It! furtherreinforces Nikes call for action. Apple Inc.s logo, the bitten apple, in and of itself

effectively communicates a company that is different and unique and does thingsits own way. It was a very unusual and radically different logo for a high-technologycompany. The U.S. Marine Corps logo of the eagle, globe and anchor strikes achord with young people to become one of the few and the proud.

However, surprisingly few companies trade upon the opportunity that logosrepresent; most logos fall short in visually expressing a brands values andprinciples.

In our research, we found that logos are capable of communicating andunderscoring a brands functional benefits. Consider Arm & Hammers logo, whichclearly expresses the brands ability to get things done be it in baking or in

getting rid of odors in the refrigerator. Similarly, Swiss Army Knives bold,equilateral cross logo suggests quality and dependability, reinforcing the companysSwiss craftsmanship and problem-solving capability in a way that makesconsumers feel self-confident and helps them in their quest for self-reliance.

Or consider Glocks stylized safe-action gun trigger logo that symbolizes the firmsfocus on firearms engineering, design and manufacturing quality. It givesconsumers confidence to live your life. Brands that are able to create a sense ofcapable and efficacious self in customers are likely to be rewarded with deeper,more meaningful customer-brand relationships.

It is surprising how unappealing many logos are. Yet logos are capable of offering

fun, aesthetic appeal and pleasure to consumers, which we call sensory benefits.For example, Aflac Inc.s now-famous duck logo helps to create warm feelingstoward an industry (insurance) generally perceived as rather cold and boring.Logos that are aesthetically pleasing or fun have a positive impact on customerrelationships.

Visual Logos vs. Text Logos


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Some logos consist only of the brand name. Think of IBM, Goldman Sachs, Oracleor Samsung. Other logos use the brand name in combination with a unique visualsymbol, such as Nikes swoosh or Arm & Hammers flexed muscle arm with rolled-up sleeve. Others drop the brand name altogether and rely on a visual for theirlogo, such as Apples apple or Mozilla Firefoxs stylized fox.

Our research found that separate visual symbols used as logos tend to be moreeffective than brand names at creating a sense of emotional connection withconsumers. This may not come as a big surprise, because symbols have long beenconsidered more effective than words as communication tools. Symbols betterovercome language barriers and are easier to interpret than words. However,despite the commonly understood benefits of symbols versus text, surprisingly fewcompanies take advantage of separate visual symbols. Logos with separate visualsymbols thus represent a largely untapped opportunity in reaching out toconsumers.

Related Research

C.W. Park, A.B. Eisingerich, G. Pol and J.W. Park, The Role of Brand Logos inFirm Performance,Journal of Business Research66, no. 2 (February 2013): 180-187.

Strengthening a Logo with Brand

Extensions

There is a critical symbiotic relationship between brand logos and brandextensions. First, brand logos can offer an important strategic advantage thatfacilitates the success of extending a brand name to other product or servicecategories. Once successfully introduced, brand extensions make brand logos morevisible and prominent, reinforcing the brands key benefits. Indeed, our researchfindings indicate that the positive effects of brand logos on customer commitmentand company performance are stronger when companies extend their brands withthe same logos.

By offering additional connection points in daily life (for example, Arm & Hammer

shower gel in the morning in addition to the use of baking soda in the kitchen orrefrigerator), brand extensions with the same logos strengthen customerrelationships with both old and new products.

Unleashing the Power of Brand Logos


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We are not arguing that great logos are imperative for a brands success. A businesscan do well despite having a seemingly weak logo one that is not aestheticallyappealing or fun, that does not communicate a brands functional benefits toconsumers and that does not express its core values. We also do not suggest thatbrand logos themselves automatically create meaningful positive associationsbetween a brand and consumers.

These associations must be created for a brand through marketing, such as taglinesand advertising. However, once such associations have been created, brand logoscan further reinforce them. What our research shows is that effectively managedbrand logos can help companies to build stronger customer brand commitmentand thus allow a brand to improve its financial performance.

Logos offer a frequently untapped opportunity for companies to communicate andsymbolize a brands essence to consumers, thereby building closer relationshipswith them, creating strong positive emotions and facilitating top-of-mind recall.Overall, logos are the most crucial visualsynthesizersof a brand that consumers

turn to on a daily basis. We strongly encourage managers to rethink their use ofbrand logos to help them strengthen customers commitment to a brand, facilitatenew brand extensions and thus trade upon new business opportunities in thefuture.

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MIT. the Power of a Good Logo