58 Business Horizons / May-June 2002
In 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
the company’s book value. This estimate reflects the pres-
ent value of the economic profits the brand is expected to
earn—over and above “normal” profits, or over and above
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
brand in the United States and in the world based on rat-
ings on “share of mind” and “esteem” (Owen 1993).
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 the absence of other factors, brands provide much
needed differentiation and influence customers’ choice.
The approval rating for Kellogg’s Corn Flakes increased
from 47 percent in a “blind” test to 59 percent when the
name was revealed. Similarly, reports Aaker (1991), the
preference for Armstrong tiles rose from 50 to 90 percent.
The pace of today’s technology changes has made it diffi-
cult to differentiate purely on physical attributes. Con-
sider the various brands of televisions, VCRs, and per-
sonal computers. It is ironic that in such technologically
sophisticated products, the similarity between different
brands is not unlike the remarkable similarity between
various brands of gasoline. They have become commodity
items. The only strong differentiation is based on the
Economic globalization is reducing price differentials.
Costs are becoming lower, and often the only way to
charge a premium is to cultivate a brand. Success in
implementing an effective brand image can greatly affect
success in the market. In the international arena, Volkswa-
gen Fox receives favorable evaluations because it is Volk-
swagen, a brand image based on its German origin. Only
In an increasingly saturated
marketplace, brands help create
preference for a product. And as
a key component of brand identity,
a logo provides instant recognition for
the brand and the product. Logos help
transcend international boundaries and
language barriers because of their “visual”
character. But although companies spend
considerable amounts of money to create and
promote effective logos, there are no clear
guidelines for doing so. With supporting
evidence from a review of the academic
literature, the findings and recommendations
presented here should help in making logo
designs stronger and more objective.
Professor of Marketing, California State University, Fullerton
Visiting Assistant Professor of Marketing, School of Hotel
Administration, Cornell University, Ithaca, New York;
Assistant Professor of Marketing, Drexel University,
Philadelphia (Fall 2002)
Associate Professor of Marketing,Concordia University,
Creating effective logos:
Insights from theory
8 percent of the people surveyed,
says Ratliff (1989), knew that it is
manufactured in Brazil.
Interestingly, globalization is pro-
moting the standardization of
products. However, with the
increasingly fragmented commu-
nication media, the only thing
standardized from the consumer
perspective is the look and feel of
the product. So marketing man-
agers use brand identity to create
a distinctive image. A brand name
goes a long way, but can be lim-
ited because of language differ-
ences. Logos help transcend
country boundaries and language
barriers because of their “visual”
character. They are particularly help-
ful in nations with lower literacy
rates, providing instant recognition
for the brand.
Brand identity has three components:
name, logo, and slogan. Undoubtedly,
the name is the most important, but a
logo can be an immensely helpful tool.
There is a fair amount of research on
names, but we were unable to come up with
a comprehensive article on logos. That’s what
we aim to accomplish here, providing some
suggested guidelines for their design and use.
The role of logos
Logos 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
and logo—than it spends on advertising. Nike’s swoosh
has become so prominent that the company’s ads often do
not even mention the name. Despite their importance and
the investments made in logos, however, there are no well-
established guidelines for creating them. It is not surpris-
ing, then, that many logos are unrecognizable or even
viewed negatively, which could end up hurting the brand
or company image.
With the competition for in-store purchasing intensifying,
it is evident that the instant recognition resulting from
packaging and logos is a good investment to make. Trade-
marks and logos help cut search costs for consumers by
providing them with a sense of assurance about product
quality. Their role is particularly helpful in aiding recogni-
tion, especially for low-involvement, frequently purchased
items such as gasoline. This should not be surprising, con-
sidering that some 60 percent of consumer purchase
decisions occur inside the store. Cues provided by well-
designed logos can lead to faster recognition, which is very
helpful because consumers spend, on average, less than 15
seconds to make a purchase in many product categories.
Logos can help a brand in two ways. First, they can be used
in conjunction with the name. Not only can a picture en-
hance the memory for accompanying words, but using a
logo influences the speed of recognition. While logos may
be used to stimulate the memory for a brand directly, they
may also help remember the brand name. A study of pre-
schoolers was conducted to understand their learning of
brand names. According to Macklin (1996), when visual
cues were provided along with brand names, children re-
membered the brand names better. The presence of addi-
tional visual cues, such as a picture and color, helped im-
prove the memory further. This is because with nonverbal
59Creating effective logos: Insights from theory and practice
processing, all elements—text and graphics—are processed
simultaneously, whereas verbal processing follows a se-
quence. Thus, pictorial representations are retrieved from
memory much faster than non-pictorial ones, especially
when there is consistency across the various elements of brand
identity. Because all logos contain some degree of pictorial
representation (even logotypes, a stylized presentation of a
name), retrieval is faster and more efficient because all ele-
ments can be processed simultaneously and it does not
have to follow a sequential pattern.
Second, logos can be used in place of the name when
there is a space or time constraint. Billboard advertising,
for example, does not provide an opportunity for pro-
longed exposure. Similarly, the ready in-store recognition
provided by logos helps stimulate purchasing. “I think if
you’ve got two or three kinds of peanuts sitting there,”
said a survey respondent, “I would probably grab the one
that has [Mr. Peanut’s] picture on it…just because it’s
something you know” (Callcott and Phillips 1996). This
is particularly important in this day and age, when there
are so many brands and the market is saturated with pro-
motional messages. A logo that readily cues the product
is a big advantage.
There are two facets of logo design: content and
style. Content refers to the elements contained in
the logo, including text and graphic representation.
Style, on the other hand, refers to how these elements are
presented. The main thrust of logo design is on the con-
tent. Bell, Holbrook, and Solomon (1991) suggested that
individuals may rely on social value and aesthetic value in
the same consumption context. This was supported by a
qualitative study by Pimentel (1996), in which respon-
dents were shown color photographs of geometric patterns
and were asked about the content and visual quality. The
respondents’ evaluations were influenced by both, but
with a stronger emphasis on content. Most remarks were
about content, even when specifically asked about visual
quality. People apparently look for meaning in logos.
Giberson and Hulland (1995) support this assertion. They
found that a logo is retrieved faster from memory when a
product category is cued in the logo. This makes a case for
the emphasis of content over style by suggesting a connec-
tion with the product category. Thus, logos that incorpo-
rate a hint of the product category would be more effec-
tive. Examples include the Gerber baby, the chicken icon
for “Chick-fil-a,” and the hitter in the Major League Base-
ball logo. The study also found that although having a
logo had a strong effect on recognition speed, the type of
logo—graphics- or text-dominated—did not. Style, then,
is not critical.
This does not imply that style elements should be over-
looked. Sometimes low-content and high-image logos are
a necessity. In the case of multiproduct companies, it is
difficult to have a logo with high content. This explains
the use of purely abstract logos by such multinational cor-
porations as Citibank, AT&T, Fujitsu, and Agilent Tech-
nologies. Besides, style can be important; according to
Berlyne (1971), survey respondents had fairly consistent
aesthetic ratings among themselves, evaluating styling
somewhat objectively and uniformly. To the extent that
style makes a difference, then, companies should proba-
bly pay attention to it.
Not many studies have looked at the myriad logo ele-
ments in an effort to understand how logos are evaluated
and on what dimensions. Henderson and Cote (1998)
performed a very thorough factor analysis of a large num-
ber of design dimensions on which logos are evaluated
(independent variables) and the response dimensions
(dependent variables), with some interesting and prag-
matic results. The response dimensions that emerged
included correct recognition, false recognition, affect, and
familiar meaning. Correct recognition occurs when the
respondents recognize the stimuli they have seen in the
past. False recognition occurs when they profess recogni-
tion but have not really seen the logo in the past. It is
important to note that false recognition can be desirable
when only a low investment can be made. While care
should be taken not to infringe on another company’s
trademark, the desire may be to make people believe they
have seen the logo. Affect refers to the overall liking for
the logo, and meaning refers to the ability of a logo to
capture a clear connotation of the product or the com-
pany. Logos with high meaning are “highly codable” sym-
bols that evoke consensually held interpretation within a
culture or subculture.
The emerging design dimensions included elaboration (a
combination of complexity, activeness, and depth), natu-
ralness (representative of commonly experienced objects),
harmony (balance), parallelism (placement of multiple
lines or elements adjacent to each other), proportion (the
relationship between horizontal and vertical dimensions),
60 Business Horizons / May-June 2002
Elements of logos should be
chosen and designed with an
eye toward the relevant and
specific marketing objectives.
repetition (elements being similar to each other), and
roundness (primarily circular elements).
Henderson and Cote found that correct recognition is
bolstered by high naturalness. A moderately high level of
harmony but slightly less perfect symmetry also makes
recognition easier. This is partly because of the plethora of
perfectly symmetric logos, which makes them more com-
monplace and confusing, and leads to false recognition.
False recognition is aided by moderately high parallelism
and high harmony—almost reaching symmetry. This
makes sense because these elements make logos less dis-
tinctive and more commonplace.
Strong positive affect logos can best be created with high
levels of naturalness and elaboration. Elaborate logos
maintain the viewer’s interest. A high level of naturalness
makes them more satisfying to look at and leads to a
stronger positive affect, which is particularly helpful in
high-image logos. Finally, familiar meaning can be im-
proved by selecting a design that can be easily interpreted.
Logos with familiar meanings, as discussed above, also
increase recognition and are evaluated more favorably.
Although the variety of marketing objectives and the
resulting appropriateness of the design dimensions may
seem complex, it underscores the lack of rules that can be
universally applied. Elements of logos should be chosen
and designed with an eye toward the relevant and specific
Updating logos: Good
business or needless hype?
Should a company update its logo? If so, when?
Because logos make recognition and information
retrieval quicker and more efficient, one of their
main purposes is to cue a brand more efficiently. This
tends to make a strong case for building recognition with
a logo and not changing it. It is why companies such as
Arm & Hammer retain the same logo for decades. In
doing so, they are maintaining instant recognition.
However, logos may need to be changed, perhaps due to
changes in the company name (Federal Express to FedEx),
a strategy change (United Airlines becoming employee-
owned), a shift in service emphasis (the US Postal Service
wanting to emphasize speed), or a desire to update to a
more modern image. Some logos make a straightforward
case for change and update. Betty Crocker’s hairstyle and
clothing have been continuously updated over the years
because the company wants to portray an image appeal-
ing to the contemporary woman. Not updating her ap-
pearance would have made her look old-fashioned. The
same held true for Aunt Jemima, whose image was mod-
ernized from its original stereotypical image of a smiling
black “mammy” on a pancake mix box or syrup bottle. If
it had not been updated, the logo may have turned off
too many consumers.
Logos may also be changed for other reasons. Companies
may find novelty appealing and so continuously update
their logos. Examples include the Prudential Rock and
General Electric. In these circumstances, the important
question is, “If a logo has to be changed, what kind of
change is most effective?”
If not done right, a logo change or update may be coun-
terproductive. To really determine whether logos need to
be updated, it is important to focus on how they are eval-
uated (1) over time and (2) by individuals of varying lev-
els of expertise. Viewers process information differently,
both at perceptual and experiential levels. Naïve respon-
dents tend to be subjective and have strong preferences
for familiar subjects. They rely exclusively on affective
responses. Viewers trained in graphic design, on the other
hand, are more objective in their evaluations and prefer
“high art,” which challenges them and expresses the artist.
They use cognitive and objective evaluations. Logos are
created by graphic designers (trained), but are meant for
the general public (naïve). This leads to a discrepancy
between the evaluations the market will provide and the
choice the designers will impose, with important implica-
tions for the effectiveness of the logos that are chosen and
the subsequent decisions to update them.
Logo evaluation also changes over time, with repeated
exposures. The “familiarity effect,” also documented
under the name “mere exposure effect,” results in a more
favorable evaluation. However, the “boredom effect” may
also come into play, resulting from too many exposures.
In other words, subjects exposed to the same stimuli over
a period of time may raise their evaluation; too many
exposures, and they’ll lower it. Berlyne (1970) and Born-
stein (1990) refer to this up-and-down in evaluations as
the “two-factor” model.
Objects presented for the first time can be perceived as
threatening. The threat is reduced and viewer liking in-
creased with repeated exposures to the stimulus (stimulus
habituation). But when too many exposures result in the
boredom effect, liking decreases. Thus, consumers may
become bored with logo designs that are not updated.
Once people have adapted to a stimulus (a logo), a
slightly altered version of it might create a novelty effect
and they would prefer the new image over the former.
However, if the stimulus is changed too much, they per-
ceive it as a new image and prefer the former. Conners
(1964) reported similar results using incrementally
altered versions of abstract geometric designs as stimuli.
Another plausible interpretation, supported by Sherif and
Hovland (1961), is that a slightly altered logo may fall
within the latitude of acceptance, whereas further alter-
61Creating effective logos: Insights from theory and practice
ation may make the logo different enough to fall within
the latitude of rejection. If this holds in the case of prefer-
ence for logo designs, slight changes are tolerated rather
than preferred. This provides justification for incremental
changes in logos, rather than drastic ones. A series of
empirical studies by Pimentel and Heckler (2000) found
support for this assertion.
Other factors may also explain the discrepancy between
the familiarity effect and the boredom effect. Simpler
images, maintain Cox and Cox (1988), tend to get a lower
evaluation over repeated exposures, whereas the evalua-
tion of complex stimuli improves. Harmon-Jones (1995)
came up with a list of factors that demonstrate the most
robust familiarity effects, including a heterogeneous
sequence of exposure to stimuli. This means being ex-
posed to different stimuli in succession, rather than to the
same stimulus (a homogeneous sequence). While a homo-
geneous sequence may occur in lab settings, the heteroge-
neous effect is more representative of what happens in the
real world. As such, we can expect the familiarity effect to
be stronger and more prevalent. In such a circumstance,
unnecessary logo changes are not advisable.
A small survey of graphic designers used in one of
Pimentel and Heckler’s studies concluded that clients
often stimulate these (unnecessary) updates. Of those
designers, 54 percent felt that logos should not be up-
dated on a regular basis, while 29 percent felt that logos
should be changed for the sake of change alone. Not sur-
prisingly, it was also found that consumers do not seem
to prefer change. The decision to change logos, in the de-
signers’ experience, came from the client, not from the
designers themselves. Thus, if logos are to be changed,
they should be changed for content, not for style, and the
change should be incremental.
Considering the importance of logos for product suc-
cess, it is not surprising that companies make sub-
stantial investments in creating them. It is surpris-
ing, however, that there is no framework available to guide
their design. As such, logo design is still treated more as an
art and less as a science. With this in mind, we present the
following guidelines, based on our discussion of the exist-
1. Choose the image carefully, because
it has a profound impact.
The three branding elements are at the core of a com-
pany’s communication efforts, representing tremendous
investment. Accordingly, the strategy and the creation of
these three elements should be well thought out, because
they have a profound impact on the product. Oldsmo-
bile’s continual struggle and eventual demise is convinc-
ing proof for this assertion. The image of a stodgy car for
the older generation has been impossible to shake off.
The slogan “This is not your father’s Oldsmobile” did not
help much. As a result, the company decided to introduce
the Aurora without any prominent association with the
Olds name, and with a new logo. The lesson to be learned
here is that a strong image may take a long time to build,
but an even longer time to shed.
2. Look at the big picture, and ensure
consistency over time and between the
In Callcott and Phillips’s 1996 study, respondents had a
clear preference for a character whose personality was
consistent with the brand. It follows that consistency
across all elements of brand identity contribute to a
stronger brand image. Good examples include Dow’s
“scrubbing bubbles” (because consumers want lots of
bubbles when scrubbing) and the Energizer bunny
(because consumers want the batteries to go on forever).
More important, each element should support the others.
This is well demonstrated by Exxon’s communications. The
Standard Oil tiger was introduced as a symbol of power
with the accompanying slogan “Put a tiger in your tank.” A
more friendly cartoon version of the logo was created in
1962, and again in 1972 when the company’s name was
changed to Exxon. The tiger logo helped ensure continuity
and consistency during this transition, along with the slo-
gan “We’ve changed our name, but not our stripes.” In the
1990s, a personified version of the tiger was introduced,
with an appropriately supportive slogan, “Rely on the
Tiger.” The ‘90s tiger drives a car and relaxes in a boat, sug-
gesting ways in which Exxon gas has enriched the lives of
its customers. Consistency and continuity have been main-
tained throughout all these changes. This was particularly
important in the case of Exxon; because the company
operates in so many nations, it chose a coined name,
which made it difficult to capture any meaningful image
from the name itself. In such a situation, the logo and the
slogan complemented the name very well and did a com-
mendable job of supporting and projecting it.
62 Business Horizons / May-June 2002
If logos are to be changed, they
should be changed for content,
not for style, and the change
should be incremental.
3. Be careful about what you can and
Names cannot be changed, at least for products and serv-
ices. Logos may be changed. Slogans should be changed
to shoulder the bulk of the effort when adjustments in
brand strategy are required. This is because slogans can be
used as succinct selling statements, while the name and
the logo can be used to provide continuity. If a logo is
changed, the change should be made in (1) content,
when it is warranted by a shift in brand strategy, or (2)
style, when the need for an update is felt. The alteration,
however, should be kept to a minimum.
There is ample evidence in support of incremental change
only. Consider Pepsi-Cola. The name Pepsi has remained
the same since its inception. The logo has been the same
in content, but has been continuously updated. The slo-
gan has been changed several times over the years to tout
the product and the brand image:
●1902: “Cures nervousness. Relieves exhaustion.” (to
emphasize Pepsi as an aid in digestion)
●1903: “Cooling and Satisfying”
●1934: “Cost small! Liked by all! Bottle tall!” (to reflect
its value package)
●1941: “Nickel, Nickel!” (with a 15-second jingle played
around the world)
●1950: “More bounce to the ounce” (post-WWII infla-
tion stressed fun rather than cost)
●1953: “The light refreshment” (to reflect consumer
demand for fewer calories)
●1961: “Pepsi—for those who think young” (coinciding
with a logo update)
●1963: the hugely successful “Come alive! You’re in the
●1969: “You’ve got a lot to live; Pepsi’s got a lot to give”
●1973: “Join the Pepsi people—feelin’ free.”
●1981: “Pepsi’s got your taste for life” (in some ways
stimulating the “disastrous” launch of New Coke by
●1984: “Pepsi—the choice of a new generation”
●1995: “Nothing else is a Pepsi”
4. Don’t go with the flavor of the month.
Too many managers are tempted to copy whichever brand
has succeeded lately, or what the market leader has done.
The success of the Nike swoosh prompted several compa-
nies to include swooshes—or rings of Saturn—in their
logos. The swoosh seems to have a ubiquitous presence,
with interpretations ranging from global reach, impact,
full offerings, and spectrum to high-tech feeling and con-
tinuity. Variations now adorn logos for Vanteon, Open
Market, and Ameritech.
There is a problem, though. Such copying lessens distinc-
tiveness and makes a logo look like everyone else’s. Fol-
lowing market leaders is not necessarily a good practice
because they are in a different position and therefore have
a different strategy. Copying a competitor will never give a
firm the opportunity to stand apart, and may land the
company into trademark infringement problems. Besides,
it will cause confusion in the minds of the consumers.
This is undesirable, unless a “me-too” strategy is being
pursued and false recognition is the primary intent.
5. Be systematic and objective.
As much as a simple, blanket solution may seem appeal-
ing, there is none. Every application is unique and re-
quires a different set of criteria. And every design compo-
nent influences the logo’s efficacy. Managers are well
advised to develop a set of criteria for each project, which
will be dictated by the brand strategy. Logos should then
be designed with these criteria in mind, and with an eye
toward specific marketing communication objectives.
6. Test logos in the marketplace.
Slogans are generally tested extensively because they are
often a significant part of an ad campaign. But the testing
of logos is often short-circuited. The presence of a mere
exposure effect makes the situation worse, because evalua-
tions based on a single exposure are not stable or reliable.
This is significant, because industry and academia alike
have traditionally relied on evaluations after one expo-
sure. Practicing managers should temper survey results
with the expected effects of mere exposure to come up
with a logo that will be well-liked by the market in the
medium to long run. Moreover, inputs from both naïve
and trained viewers—consumers and designers—are com-
plementary and add value. A logo choice based on the
input of designers only may be inappropriate. ❍
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