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The role of logos in building brand awareness and performance: Implications for entrepreneurs

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This conceptual paper develops a model that determines whether: (1) brand/logo awareness; (2) prior consumer shopping experience with a retailer; (3) consumer sentiments of logos, and (4) consumer shopping intentions significantly and positively associated with the performance of the top 100 US retailers. The performance measurements include retailer revenues, profits, number of stores, number of employees, sales per employee, and earnings per share. Brand awareness based on logo is measured by determining which of the top 100 US retailer logos are recalled by the respondents correctly without any aid. The significance and implications of this study for entrepreneurs are discussed.
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Entrepreneurial Executive, Volume 18, 2013
THE ROLE OF LOGOS IN BUILDING BRAND
AWARENESS AND PERFORMANCE:
IMPLICATIONS FOR ENTREPRENEURS
Tulay Girard, Penn State University - Altoona
M. Meral Anitsal, Tennessee Tech University
Ismet Anitsal, Tennessee Tech University
ABSTRACT
This conceptual paper develops a model that determines whether: (1) brand/logo
awareness; (2) prior consumer shopping experience with a retailer; (3) consumer sentiments of
logos, and (4) consumer shopping intentions significantly and positively associated with the
performance of the top 100 US retailers. The performance measurements include retailer
revenues, profits, number of stores, number of employees, sales per employee, and earnings per
share. Brand awareness based on logo is measured by determining which of the top 100 US
retailer logos are recalled by the respondents correctly without any aid. The significance and
implications of this study for entrepreneurs are discussed.
INTRODUCTION
Entrepreneurial firms, organizations, and institutions use brand name, logos, slogans,
jingles, brand characters/personalities, URL, signage, packaging, letterhead paperwork, and
advertising to increase brand awareness as part of their external branding efforts. Brand logos are
also seen on labels, promotion materials, trade dress and employee uniforms, distribution trucks,
and business cards. These external branding strategies and tactics help firms build not only
corporate identity and brand persona to differentiate themselves from the competition, but also
brand loyalty. Entrepreneurs can develop their brand’s persona throughout the years with guided
and planned actions and in turn consumer responses to their brand. Herskovitz and Crystal
(2010) state that brand persona is essential in driving the continuity of the overall brand message.
They (2010, p. 21) add that brand persona is “what makes the difference in strong or weak brand
associations.” Consumers attach human like characteristics to brands based on their
understanding of brand’s values and behaviors. Logo is an important part of the brand as it
signals brand character through a stylized treatment of the company or brand name. It is like a
signature of a person. Its main function is to remind the brand and make sure that “it remains at
the forefront of the audience’s thoughts” (Herskovits and Crystal, 2010, p.21).
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Schecter (1993, p.33) defines logos as “the official visual representation of a corporate or
brand name, and the essential component of all corporate and brand identity programs.” Due to
the entrepreneurial importance of logos in consumer sentiments (positive or negative attitudes)
and brand awareness, great amounts of “investments are made because management expects that
logos can add value to the reputation of an organization” (van Riel and van den Ban 2001, p.
428). Indeed, in 1994 over 3,000 new companies in the United States spent an estimated total of
$120 million to create and implement a new logo (Anson, 1998). Timmons (1999), however,
points out that entrepreneurs work with minimal resources.
Although the theoretical assumptions and evidence from practice underline the
importance of logos in consumer perceptions of a company and its products (Schecter 1993) and
their preference of brands, empirical research on the added value of logos are limited (Green and
Lovelock, 1994). In fact, the impact of a logo’s added value through its associations with brand
awareness, consumer sentiments of a brand’s logo, likelihood of brand purchase, and the
entrepreneurial organization’s performance has not been researched in the literature. Prior
research did not pay much attention to logos. As the brands become more similar and struggle to
gain unique associations in the presence of strong competitors, investigating the correlation of
brand and logo associations become critical. As brand association researchers mentioned, brands
are focusing on trivial attributes for unique brand associations and losing the core value of the
brand. Logos may help brands to avoid lose focus. They may act as cues to elicit stronger
associations than mere attributes and help differentiate in the presence of strong competitors.
Boyle (2003) suggests that brand building efforts are more likely to succeed if associations are
created based on personal identification rather than on abstract concepts. In support of this idea,
Herskovits and Crystal (2010) suggests story-telling to build brand persona.
In this study, the authors develop a model that reflects the effectiveness of logos on
organizations’ performance. Specifically, the study examines the logo brand awareness level of
the top 100 retailers, consumer sentiments of these retailers’ logos, their prior shopping
experience with the retailer, purchase intentions, and the relationship of these factors with the
organizations’ performance. The following sections provide a review of the relevant literature
that substantiates the proposed model, the measurements and methodology to be used in a future
empirical study, and discussions of the entrepreneurial significance of the findings from such
research.
LITERATURE REVIEW
Brand Awareness, Prior Shopping Experiences, and Shopping Intentions
Aaker (1996, p. 10) defined brand awareness as the “strength of a brand’s presence in the
consumers’ mind.” Percy and Rossiter (1992, p. 264) deliberated the brand awareness as “a
buyer’s ability to identify a brand within a category in sufficient detail to make a purchase.”
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Brand awareness has been measured with unaided recall of a brand and/or brand recognition
(Aaker, 1991; Percy and Rossiter, 1992; Keller, 1993). Hence, brand awareness is the ability of a
potential buyer to recognize or recall that a brand is a member of a certain product category
(Aaker, 1991). Brand recognition usually happens at the point of purchase where a visual image
such as a logo or package stimulates a response. After recognizing the brand, a buyer considers
whether s/he needs to buy the category. Conversely, brand recall happens prior to purchase and
customers have to remember brand name in sufficient detail when the brand is not present (Percy
and Rossiter 1992). In situations where brand recall is necessary, consumers first pull category
knowledge related to the recognized need (such as hunger) from their memories, then they make
a selection among identified brands in their evoked set (such as which fast food restaurant they
want to go).
Services generally, and retailers specifically elicit both very positive and very negative
emotional responses. However, a gap exists in research exploring the nature of affective
responses to brands and retail experiences, including the role of logo perceptions in triggering
the retrieval of delightful and terrible experiences from memory (Arnold, Reynolds, Ponder, and
Lueg, 2005). The interactions among service brand awareness, consumer sentiments of logo, and
prior shopping experiences need further investigation. By definition, the logos of admired brands
evoke trust and initial compliance by a customer to an offer. Starting with an interesting question
“Would you take and taste a food sample offered to you by a stranger on the street (p.845)”
Rafaeli, Sagy, and Derfler-Rozin (2008) find that presence of a known and relevant logo makes
the offer legitimate and causes higher compliance rates especially in high-risk situations. They
conclude that reduction in perceived risk may enhance consumer compliance in the presence of
logos.
Among the relevant studies, Kanungo (1969) finds that in order to ensure that a consumer
recalls the brand name and the product category it represents, marketers need to pay attention to
meaningfulness (for response learning) and fittingness (for brand-product association learning)
of the brand name. She concludes that highly meaningful names evoked a larger number of
associations, and that a fitting brand name would be retained better than an ill-fitting brand
name. In a 2007 study, Romaniuk and Gaillard examine the relationship between unique brand
associations, brand usage, and brand performance of 94 brands across eight brand categories.
They state that unique brand associations and brand knowledge are essential for consumer based
brand equity; as such strong, favorable and unique brand associations act as cues to retrieve a
brand name from memory. Unique brand associations and brand knowledge also should help in
the brand evaluation process leading to choice and eventually purchase. However, these
researchers find inconsistent results among customers and non-customers of brands of eight
categories. They conclude that there is no strong positive relationship between the presence of
unique associations and past usage of a brand or a brand preference. Apparently, the majority of
a brand’s current customer base cannot elicit any unique brand associations even though they
regularly buy the brand. This result suggests that unique associations are not very different from
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shared associations in the choice process. Another finding of this study is that brands with larger
market share have neither more nor less unique associations than brands with lower market
share.
Romaniuk and Nenycz-Thiel (2011) extend consumer brand association research and
examine buying frequency and share of category requirements as the antecedents of brand
associations. They find behavioral differences between loyal and non-loyal consumers.
According to their results, the higher the buying frequency is the higher the propensity to give
brand associations. They also suggest that models of brand associations should include strength
of competitors in memory as well as the strength of the brand itself.
In addition, Arnold, Reynolds, Ponder, and Lueg (2005) investigate delightful and
terrible shopping experiences. They theorize that customers spend more emotional effort during
negative experiences, and negative experiences may have more prominent consequences for the
customers; therefore, the brand might be easily recalled from memory compared to neutral and
slightly positive experiences. Outcomes of both types of experiences as stated by respondents
had direct impact on brand awareness and customer shopping intentions for the brand. They
conclude that while customers are “often fickle about brands they buy and stores they patronize,
they are adamant about the ones they do not buy…” (p. 1142). Negative brand associations
resulting from terrible shopping experiences seem to make more permanent mark and can be
recalled easily from memory compared to positive brand associations. Therefore, the following
hypotheses will be tested:
H1: Consumer sentiments of logo will be positively associated with brand awareness and
prior shopping experience.
H2: Shopping intentions will be positively associated with brand awareness and prior
shopping experience.
H3: Brand awareness and prior shopping experience will be positively correlated.
Consumer Sentiments of Logo, Shopping Intentions, and Performance
Henderson and Cote (1998) define logo as “graphic design that a company uses, with or
without its name, to identify itself or its products” (p.14). They also provide a systematic
topology to investigate multiple elements of logos, which include concepts such as naturalness,
harmony, elaborateness, parallelism, repetition, proportion, and shape. They suggest that brand
logos should be unique, transmit proper meaning and propose something about brand benefits
(Kilic, Miller and Vollmers, 2011). Using a cross-sectional survey, Henderson, Giese, and Cote
(2004) find that western consumers prefer abstract and asymmetric logo designs whereas eastern
consumers prefer natural and harmonious logo designs with more rounded features. The driving
design elements of logos are found to be elaborateness, naturalness and harmony.
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Usually, brands that need revitalization start with logo redesigns. As brands get old, there
are erosions in brand knowledge structures, and brand awareness. Consumers increasingly
associate an aged brand with less desirable descriptions, and prefer more stylish and trendy
alternatives (Keller 1999). The results are loss of market share, difficulties with channels of
distribution and eviction from evoked set in consumers mind. Muller, Kocher, and Crettaz (2011)
show that logo change has a positive effect on brand modernity, brand attitude and eventually
brand loyalty in case of aging brands.
Conversely, logos as the signatures of the brand persona are so important that redesigns
are risky, and sometimes may hurt the brand instead of helping. Although there is a trend
towards designing more rounded logos, entrepreneurs attempting to change their logos should be
aware of potential negative impacts of the change on loyal consumer base. Walsh, Winterich and
Mittal (2010) find that strongly committed customers of brand react more negatively to rounded
logo redesigns. They also have a lower brand attitude as they may see this change as a threat to
their long nurtured relationship with their brand.
Van Riel and Van den Ban (2001) explain the intrinsic and extrinsic properties for logo
designs. Intrinsic properties of logos are the degree of representativeness of the logo, in other
words, a perception of the graphical representation of logo. Hynes (2009) provides empirical
evidence that color and design of the logos are directly related with representativeness. Color and
meaning of the logo are closely linked for implicitly illustrative or pictorial logos. Consumers
can elicit strong associations among designs and meanings for abstract logos, however, color
choices can vary widely. In short, consumers can drive meaning from color as well as designs.
Extrinsic properties of logos, on the other hand, originate from associations with the
company or brand. Accumulation of perceptions about past actions of the brand and intensity of
communications of values of brand to internal and external audiences define brand associations.
In one of the few studies about logo - brand associations, van Riel and van den Ban (2001) draw
attention to the fact that organizations should be careful about choosing or redesigning their
logos, as they are symbolizing desired characteristics of organization. They find that logos of
organizations with positive reputations appear to evoke more positive and desired attributes than
organizations with negative or less positive reputations. This finding provides evidence that
logos have added value in the creation and maintenance of a favorable corporate reputation.
Another study regarding NASCAR sponsorship (Levin, Joiner and Cameron, 2001)
indicate that logos generate higher level of recall for corresponding brands than recalls generated
by traditional ads, especially for consumers with higher level of involvement. Researchers draw
attention to the fact that there is a lack of underlying theory and conceptual foundation on how to
link sponsorship activities to desirable consumer responses. The role logos played in
sponsorships need to be investigated further.
Kilic et. al (2011) summarize that the development of brand identity is essential for
strong, well known and trusted brands. The brand identity depends on a set of brand associations
that consumers perceived as unique promises of the brand. These associations are related to the
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brand awareness and ultimately brand choice in purchase decisions. Brand logo serve as the
visual cue in consumer choice and purchase decisions.
Given the importance of the role of logos on brand identity and performance, most
literature on logos have focused on how to design effective logos and associations made based
on the design. Most of them are nonacademic articles. Similar to brand associations, logo
associations may be product attribute, service quality, and experience related (John, Loken, Kim
and Monga 2006). Although research on the relationships of consumer sentiments of logos with
shopping intentions and in turn performance does not exist, extant research imply a positive
relationship between brand awareness and consumer sentiments of logos (Levin et al., 2001),
prior experience and consumer sentiments of logos (van Riel and van den Ban, (2001), consumer
sentiments of logos and performance (Keller, 1999), consumer sentiments of logos and shopping
intentions (Muller, Kocher, and Crettaz, 2011). Therefore, the following hypotheses will be
tested:
H4: Consumer sentiments of logo and shopping intentions will be positively correlated.
H5: Performance will be positively associated with brand awareness, prior shopping
experience, consumer sentiments of logo, and shopping intentions.
FIGURE 1: CONCEPTUAL MODEL
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METHODOLOGY
Sample
To achieve the objectives of this research, a total of 400 participants from diverse
demographics groups will comprise the sample. Business students at two universities will be
trained to obtain a snowball sample. For example, each student will distribute a paper and pencil
survey to three to five adult nonstudent participants. As an incentive, an extra credit/bonus point
will be offered to the students. Students’ identity will be captured to give the bonus point. In
addition, identity and contact information of the participants will also be captured to verify the
interviews via a 20 percent call back or email method.
Measurements
To measure brand awareness based on logos, the participants will be shown the top 100
retailers’ logos one at a time and asked if they recall the name of the brand. Frequency
distribution of open ended answers (name of the logo) will be coded as: 1=recalled correctly; 0=
not recalled. The brand awareness for a logo will be classified as 3=high if 66 to 100 percent of
the participants recall the logo correctly; 2=medium if 34 to 65 percent recall the logo correctly,
and 1=low if 1 to 33 percent recall the logo correctly.
Using the URL link for slideshare.net, an online PowerPoint slide show with 100 logos
downloaded from the web sites of 100 top retailers will be played sequentially. Participants will
fill out a paper survey with an open ended question for each numbered corresponding logo.
To measure consumer sentiments of logos, the participants will be asked whether logo
represents (-100)=negative, 0=neutral, (+100)=positive associations to them on a sliding scale.
The participants will be asked about how many and types of prior shopping experiences (e.g.,
number of purchase, visit, seeing an ad, return, and inquiry for product/service information) they
had with the specific company using the ratio scale: 0=none, 1=one to two, 3=three or more
times in the past 12 months. If there is any, then the nature of the experience will be asked using
the scale: (-100)=very dissatisfied, 0=neutral, (+100)=very satisfied on a sliding scale. Shopping
intentions will be measured by asking the likelihood of shopping with the retailer on a 100
percent probability scale (Girard and Dion, 2010).
The annual performance data of each top 100 retailer will be obtained from
www.stores.org. The performance variables include revenue, profit, number of stores, number of
employees, sales revenue per employee, and earnings per share. Demographics questions (i.e.,
age, income categories, occupation type, education categories, gender, and zip code) will be
asked at the end of the survey after the participants complete answering the questions in order to
describe the sample and assure a diverse demographic profile representative to the general
population.
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To test the hypotheses in the proposed model in Figure 1, MANOVA or Canonical
Correlations test will be performed. The dependent variables include each of the performance
variable of each retailer and the independent variables include brand awareness, prior shopping
experience including number of experience and satisfaction level (average score per retailer),
consumer sentiments of logo (average score per retailer), and shopping intentions.
Model: Y
1
+ Y
2
+…+ Y
N
= X
1
+ X
2
+…+ X
N
IMPLICATIONS FOR ENTREPRENEURS AND CONCLUDING REMARKS
Traditional manufacture-based consumer brand equity model (Aaker 1991) overlooked
experiential nature of services, including prior shopping experiences of consumers with retailers
and consumer brand awareness. Furthermore, logo associations of retailers are different than
product logo associations, as the logos of retailers usually represent corporations as brands.
Retailers occupy extended media space in daily life of consumers through print, broadcasted, and
online advertising. Even if consumers have no shopping experience with a specific retailer, they
may have negative or positive logo associations based on external communications of that
retailer. This model will allow both researchers and entrepreneurs to assess relative weight of
service brand awareness, prior shopping experiences on logo associations, and purchase
intentions in leading to overall performance of retailers.
This study aims to examine the role logos play in building brand awareness that leads to
the performance of the top 100 retailers based on the consumer sentiments of these retailers’
logos, their prior shopping experience with the retailers and in turn shopping intentions in a
theoretical model. Prior research suggests that entrepreneurs can establish consumer trust by
building brand persona that affect consumer sentiments positively through designing their logos
to carry unique and positive associations (Green and Lovelock, 1994). Because entrepreneurs
have limited resources (Timmons 1999), by creating favorable unique brand associations
attached to logos and delivering positive consumer shopping experiences, entrepreneurs can
create strong customer preferences for their brands.
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Arnold, Mark J., Kristy E. Reynolds, Nicole Ponder and Jason E. Lueg (2005). “Customer delight in a retail content:
investigating delightful and terrible shopping experiences”, Journal of Business Research, 58, 1132-1145.
Boyle, Emily (2003). “A study of entrepreneurial brand building in the manufacturing sector in the UK,” Journal of
Product and Brand Management, 12 (2), 79-93.
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Green, D. and Lovelock, V. (1994). "Understanding a corporate symbol", Applied Cognitive Psychology, 8, 37-47.
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(2), 14-30.
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Hynes, Niki (2009). "Colour and meaning in corporate logos: An empirical study", Brand Management, 16 (8), 545-
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... Logo, color, and slogan are the prime candidates when evolutionary rebranding exercises are conceived (Stuart and Muzellec, 2004). A logo reduces the risk perception and enhances consumer compliance, thus acting as a signature of the brand (Girard et al, 2013). Logo redesign signals revitalization of the brand when it gets old and could lead to consumer perceptions of brand modernity and favorable attitudes (Müller et al, 2013). ...
... at different levels of market strength at varying degrees. For example, if the logo of a well-established brand is redesigned, there is a possibility that the loyalists may not take it kindly and can hurt the prospects of the brand and its equity (Girard et al, 2013) as it would create an information asymmetry. This may not be a concern for a lessestablished brand as the level of information integration it has achieved is low. ...
... Gains in the brand equity were observed for the follower brand on all the six dependent variables for a change in logo and combined change in logo and color scheme. The positive effect of a logo change supports the existing literature (Girard et al, 2013;Müller et al, 2013). The combined effect of the logo and color scheme supports cue utilization theory (Anderson, 1981;Maheswaran and Chaiken, 1991) and also suggests that multiple cues could be effective than single cues (Miyazaki et al, 2005). ...
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