"Design moves things from an existing condition to a preferred one." (Graser, 2000, p. 8)
Brands are important intangible assets that significantly impact firm performance (Morgan and Rego, 2009 and Rao et al., 2004). Indeed, customers can develop deep, meaningful relationships with a brand (Fournier, 1998, Park et al., 1986, Schau et al., 2009 and Thomson et al., 2005), which result in increased brand purchase (Park, MacInnis, Priester, Eisingerich, & Iacobucci, 2010), reduced customer price sensitivity (Ailawadi, Lehmann, & Neslin, 2003), and lower marketing costs (Mizik & Jacobson, 2008). Yet, the harsh business reality for firms remains that customers view many brands as indistinguishable and commonplace.
A brand's logo has typically served as a means for resolving the problem of indistinguishability. As one of the most salient visual elements of a brand (Wallace, 2001), logos facilitate the identification of the brand and its differentiation from competing alternatives (Janiszewski and Meyvis, 2001 and MacInnis et al., 1999). Throughout history, logos have enabled the efficient identification of individuals (e.g., in ancient China, emperors used the dragon as a symbol of imperial power) and groups or movements (e.g., the cross is used on top of church buildings and the swastika on some Buddhist temples). However, logos can be more than simple tools for identification and differentiation. The Christian cross symbolizes sacrifice and life's victory over death, while in Buddhism the swastika embodies auspiciousness and good luck—hence suggesting that logos can, among others, convey key information about the brand they stand for.
In fact, prior research on branding notes that logos act as the primary visual representation of a brand's general image and meaning (Henderson and Cote, 1998, MacInnis et al., 1999 and Swartz, 1983). As a result, logos can shape the brand's reputation (Baker and Balmer, 1997, Olins, 1989 and Van den Bosch et al., 2005) along with consumers' attitudes, their purchase intentions (Woo, Chang-Hoan, Hyuck Joon, 2008) and their brand loyalty (Müller, Kocher, & Crettaz, 2011). Brand logos also have an impact on the financial value of a company (Schechter, 1993 and Van Riel and Van den Ban, 2001). However, no available research investigates the specific nature of these relationships. This paper builds on extant research by examining the impact of brand logos on customer commitment and firm performance and extends current research in three critical ways.
First, this study investigates the mechanism(s) through which logos, as the summary representation of what a brand stands for, strengthen customer commitment and firm performance above and beyond the mere brand identification benefit noted in past work.
Second, since no prior work studies when logos are more effective at engaging customers beyond enhancing brand identification, this study explores the role of brand logo type in offering benefits to customers. Specifically, logos may show the brand name alone (e.g., Intel, Ford, Samsung, IBM), or in combination with a unique visual symbol (e.g., McDonald's golden arches, Mercedes-Benz's three-pointed star). In this latter case the symbols serve as the actual brand logos, such that the brand names appear as complements alongside the symbols, or may even be dropped altogether in favor of the visual sign (e.g., Apple, Target). This study assesses whether or not logos showing brand names alone and brand names accompanied by separate visual symbols have differential effects on providing customer benefits that go beyond mere brand identification.
Third, given that brands frequently use extensions to other product categories to leverage their current customer base and parent brand image (e.g., Aaker and Keller, 1990 and Broniarczyk and Alba, 1994), this study addresses the question of how the frequency of such extensions influences the positive effects of brand logos. In sum, the overall purpose of this study is to identify how brand logos contribute to customers' brand commitment and firm performance, and when such impact is most pronounced.
An important caveat to the present study exists. Specifically, this study does not assume brand logos' effects to be independent of a brand's marketing efforts, nor does it intend to test the contribution of logos relative to other marketing strategy elements (such as product quality, distribution power, pricing). Instead, the study relies on the assumption that a firm's marketing activities are reflected in consumers' understanding of the firm's brand logo(s).
The following sections discuss the purpose and conceptual background of this study and then introduce a set of formal hypotheses. Afterward, the research method and results follow. Finally, a discussion of the findings' implications for management practice and future research ensues.
The results of this research indicate that managers need to consider brand logos as more effective and powerful tools in the management of customer–brand relationships than previously thought. More specifically, just because consumers can quickly identify a brand based on its logo does not mean that they will invest resources towards sustaining their relationship with the brand. That is, brand logos that are easily recognizable, yet which do not convey the brand's symbolic and functional benefits or do not provide aesthetic gratification, fail to take full advantage of their own potential.
Visual symbols as brand logos offer an untapped opportunity frequently. This study's findings indicate that brands with symbols as logos are more effective at providing self-identity/expressiveness benefits than logos that consist purely of brand names. They are also more successful at communicating the functional benefits of a brand than brand name-based logos are. Finally, the finding that the aesthetic appeal of brand logos significantly strengthens customers' commitment to a brand answers the need for business academics to examine the positive effects of visual attractiveness on consumers (e.g., Bloch, 1995). Managers should further take note that visual symbols as logos appear particularly effective at providing aesthetic appeal to customers. Taken together, these results clearly demonstrate the added value of using visual symbols for branding purposes.
Today's marketplace is very noisy. Brands must be particularly clear about what they want consumers to remember about them. This study shows that focusing on the management of brand logos–as the summary representation of what a brand stands for–provides marketers with a valuable, largely untapped tool in their efforts to deepen customer–brand relationships and enhance firm performance. In addition, contrary to what one might expect, a brand's extension efforts to different product categories strengthen, rather than weaken, the benefits of brand logos. This bodes well for brands' future growth and rejuvenation strategies, as logos can help customers connect with a brand across product categories.
We consider several limitations of the present research when interpreting the results. First, the study controls for customers' familiarity with a brand, the worth of a firm's intangible assets, advertising spending-to-sales ratio, as well as operating margin, leverage, and past revenue growth, all of which can affect firm performance and customer brand commitment. Due to lack of data, the authors do not account for changes to brand logos over time (e.g., some corporate brands continuously modify their logos while others do not alter them for long periods of time), which can interact with customer commitment to impact firm performance (Walsh et al., 2010). They do, however, acknowledge the importance of testing the present model using longitudinal data, and invite future research to explore how brand logos impact customer–brand relationships over time. Second, since managers can develop a brand's visual identity not only through logos (including colors and shapes), but also through elements such as packaging and product design, future research can expand the model proposed in this research by accounting for the multitude of ways in which brands connect to customers' selves, communicate functional benefits, and offer aesthetic appeal.
Third and finally, the effectiveness of a visual logo likely depends on multiple design properties of the logo (e.g., color, shapes, and sizes). Because an analysis of specific logo design elements is beyond the scope of the present study, the authors encourage future research that addresses these shortcomings.
