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Rajneesh Suri
I n the year 2000, Coca-Cola appeared once again at
the top of Interbrand’s list of the “World’s Most Valu-
able Brands,” with an estimated value of $72 billion.
Coke’s brand is worth more than half the market capital-
ization of the company itself, and a staggering ten times
Visiting Assistant Professor of Marketing, School of Hotel the company’s book value. This estimate reflects the pres-
Administration, Cornell University, Ithaca, New York; ent value of the economic profits the brand is expected to
Assistant Professor of Marketing, Drexel University, earn—over and above “normal” profits, or over and above
Philadelphia (Fall 2002) what an otherwise equivalent product might achieve
without the benefit of the brand. This is understandable,
considering that Coca-Cola was found to be the strongest
Mrugank Thakor brand in the United States and in the world based on rat-
Associate Professor of Marketing, Concordia University, ings on “share of mind” and “esteem” (Owen 1993).
Montreal, Quebec Everyone recognizes the name and its stylized logotype.
Nike's swoosh logo is worth $3.6 billion. And of course,
every kid can recognize the “golden arches,” which has
helped lead McDonald’s to success in the marketplace
and boost the value of its brand name to $27.9 billion.
In an increasingly saturated In the absence of other factors, brands provide much
needed differentiation and influence customers’ choice.
marketplace, brands help create The approval rating for Kellogg’s Corn Flakes increased
from 47 percent in a “blind” test to 59 percent when the
preference for a product. And as name was revealed. Similarly, reports Aaker (1991), the
a key component of brand identity, preference for Armstrong tiles rose from 50 to 90 percent.
The pace of today’s technology changes has made it diffi-
a logo provides instant recognition for cult to differentiate purely on physical attributes. Con-
the brand and the product. Logos help sider the various brands of televisions, VCRs, and per-
transcend international boundaries and sonal computers. It is ironic that in such technologically
sophisticated products, the similarity between different
language barriers because of their “visual”
brands is not unlike the remarkable similarity between
character. But although companies spend various brands of gasoline. They have become commodity
considerable amounts of money to create and items. The only strong differentiation is based on the
promote effective logos, there are no clear brand image.
guidelines for doing so. With supporting Economic globalization is reducing price differentials.
evidence from a review of the academic Costs are becoming lower, and often the only way to
charge a premium is to cultivate a brand. Success in
literature, the findings and recommendations
implementing an effective brand image can greatly affect
presented here should help in making logo success in the market. In the international arena, Volkswa-
designs stronger and more objective. gen Fox receives favorable evaluations because it is Volk-
swagen, a brand image based on its German origin. Only
L
ogos are a key part of a company’s communica-
tion efforts. Taco Bell spends 20 times more on its
permanent media—signs that carry only its name sidering that some 60 percent of consumer purchase
and logo—than it spends on advertising. Nike’s swoosh decisions occur inside the store. Cues provided by well-
has become so prominent that the company’s ads often do designed logos can lead to faster recognition, which is very
not even mention the name. Despite their importance and helpful because consumers spend, on average, less than 15
the investments made in logos, however, there are no well- seconds to make a purchase in many product categories.
established guidelines for creating them. It is not surpris-
Logos can help a brand in two ways. First, they can be used
ing, then, that many logos are unrecognizable or even
in conjunction with the name. Not only can a picture en-
viewed negatively, which could end up hurting the brand
hance the memory for accompanying words, but using a
or company image.
logo influences the speed of recognition. While logos may
With the competition for in-store purchasing intensifying, be used to stimulate the memory for a brand directly, they
it is evident that the instant recognition resulting from may also help remember the brand name. A study of pre-
packaging and logos is a good investment to make. Trade- schoolers was conducted to understand their learning of
marks and logos help cut search costs for consumers by brand names. According to Macklin (1996), when visual
providing them with a sense of assurance about product cues were provided along with brand names, children re-
quality. Their role is particularly helpful in aiding recogni- membered the brand names better. The presence of addi-
tion, especially for low-involvement, frequently purchased tional visual cues, such as a picture and color, helped im-
items such as gasoline. This should not be surprising, con- prove the memory further. This is because with nonverbal
T
here are two facets of logo design: content and
style. Content refers to the elements contained in performed a very thorough factor analysis of a large num-
the logo, including text and graphic representation. ber of design dimensions on which logos are evaluated
Style, on the other hand, refers to how these elements are (independent variables) and the response dimensions
presented. The main thrust of logo design is on the con- (dependent variables), with some interesting and prag-
tent. Bell, Holbrook, and Solomon (1991) suggested that matic results. The response dimensions that emerged
individuals may rely on social value and aesthetic value in included correct recognition, false recognition, affect, and
the same consumption context. This was supported by a familiar meaning. Correct recognition occurs when the
qualitative study by Pimentel (1996), in which respon- respondents recognize the stimuli they have seen in the
dents were shown color photographs of geometric patterns past. False recognition occurs when they profess recogni-
and were asked about the content and visual quality. The tion but have not really seen the logo in the past. It is
respondents’ evaluations were influenced by both, but important to note that false recognition can be desirable
with a stronger emphasis on content. Most remarks were when only a low investment can be made. While care
about content, even when specifically asked about visual should be taken not to infringe on another company’s
quality. People apparently look for meaning in logos. trademark, the desire may be to make people believe they
have seen the logo. Affect refers to the overall liking for
Giberson and Hulland (1995) support this assertion. They the logo, and meaning refers to the ability of a logo to
found that a logo is retrieved faster from memory when a capture a clear connotation of the product or the com-
product category is cued in the logo. This makes a case for pany. Logos with high meaning are “highly codable” sym-
the emphasis of content over style by suggesting a connec- bols that evoke consensually held interpretation within a
tion with the product category. Thus, logos that incorpo- culture or subculture.
rate a hint of the product category would be more effec-
tive. Examples include the Gerber baby, the chicken icon The emerging design dimensions included elaboration (a
for “Chick-fil-a,” and the hitter in the Major League Base- combination of complexity, activeness, and depth), natu-
ball logo. The study also found that although having a ralness (representative of commonly experienced objects),
logo had a strong effect on recognition speed, the type of harmony (balance), parallelism (placement of multiple
logo—graphics- or text-dominated—did not. Style, then, lines or elements adjacent to each other), proportion (the
is not critical. relationship between horizontal and vertical dimensions),
S
hould a company update its logo? If so, when? a period of time may raise their evaluation; too many
Because logos make recognition and information exposures, and they’ll lower it. Berlyne (1970) and Born-
retrieval quicker and more efficient, one of their stein (1990) refer to this up-and-down in evaluations as
main purposes is to cue a brand more efficiently. This the “two-factor” model.
tends to make a strong case for building recognition with
a logo and not changing it. It is why companies such as Objects presented for the first time can be perceived as
Arm & Hammer retain the same logo for decades. In threatening. The threat is reduced and viewer liking in-
doing so, they are maintaining instant recognition. creased with repeated exposures to the stimulus (stimulus
habituation). But when too many exposures result in the
However, logos may need to be changed, perhaps due to boredom effect, liking decreases. Thus, consumers may
changes in the company name (Federal Express to FedEx), become bored with logo designs that are not updated.
a strategy change (United Airlines becoming employee- Once people have adapted to a stimulus (a logo), a
owned), a shift in service emphasis (the US Postal Service slightly altered version of it might create a novelty effect
wanting to emphasize speed), or a desire to update to a and they would prefer the new image over the former.
more modern image. Some logos make a straightforward However, if the stimulus is changed too much, they per-
case for change and update. Betty Crocker’s hairstyle and ceive it as a new image and prefer the former. Conners
clothing have been continuously updated over the years (1964) reported similar results using incrementally
because the company wants to portray an image appeal- altered versions of abstract geometric designs as stimuli.
ing to the contemporary woman. Not updating her ap-
pearance would have made her look old-fashioned. The Another plausible interpretation, supported by Sherif and
same held true for Aunt Jemima, whose image was mod- Hovland (1961), is that a slightly altered logo may fall
ernized from its original stereotypical image of a smiling within the latitude of acceptance, whereas further alter-