CHAPTER 4
The Power of the Luxury Brand
So far in this book, we have spoken more readily of brands than of businesses. In fact, the luxury business is, above all, a business of brands. When customers have a preference for a brand, they are ready to spend a little more on it. Sometimes a brand goes through periods when perhaps the creativity is a bit weak, and new products are not as good as they should be, yet it manages to keep its loyal customers. There is always a strong value attached to a strong brand for reasons that are historical and social, as well as emotional.
For luxury goods, brand identity is a very important element of the business. In certain ways, it can also be a constraint: It is not possible to launch a product that is outside of its sphere of legitimacy.
How do we measure the strength of a brand? The first question to ask is: How well known is it? This can be ascertained by asking 500 target consumers: “What are the brands of luxury watches that you know?” Immediate answers—Rolex or Cartier, say—will provide what is called spontaneous awareness. But, from the same answer, researchers will be able to provide other information. They will record the number of times any one brand is mentioned first, which provides the top-of-mind answer, an indication of great strength of a given brand for a product category. For example, if we ask a group of consumers to name all the brands of scarves that they know, they are more than likely to mention Hermès first. However, recording such information will give the percentage of respondents who put a particular brand first, which allows us to determine any increases or decreases over time. It is also enables us to see any changes in the respective positions of the leading brands in the consumers’ top-of-mind responses.
In a second phase, interviewees are presented with a list of brands and asked to indicate which of them they know. This will give researchers what is known as aided awareness, which provides an indication of the familiarity of a brand with customers.
Generally, top brands such as Chanel, Dior, and Armani have a spontaneous awareness of between 40 percent and 60 percent, depending on the country in which the test is conducted. But they probably have an aided awareness between 80 percent and 90 percent in the perfumes or the ladies’ luxury ready-to-wear categories. Smaller brands perform less well on spontaneous awareness, and are generally mentioned only by those who have the product and use it.
Of course, as we will discuss in Chapter 6, the level of awareness is only a secondary aspect of the total picture. The most important aspect of the brand is its identity, that is to say, the specific contents of the awareness it generates.
In this chapter, we will discuss the value of a brand and how it can be assessed, then analyze the different ways of looking at the brand and what it represents.
The Value of a Brand
In this section, we concentrate on a study conducted every year by the consulting firm Interbrand, the main results of which are published in Businessweek. Interbrand rates almost every brand in the world, assigning to each an overall value.
The Interbrand Methodology
Interbrand relies on a specific brand-value management model that summarizes all of the different elements of a brand as they relate to the customer. This is shown in Figure 4.1.
This model puts the consumer at the center and divides the brand management world into three activities: the evaluation (through research) of brand opportunities, the creative process (brand strategy, verbal identity, and brand design), and the management process (culture, implementation, and protection).
Interbrand’s selection criteria for the annual study include:
- The company must be publicly traded.
- It must have at least one-third of its revenues generated outside the country of origin.
- It must be a market-facing brand.
- The economic value added must be positive.
- The brand must not have a purely business-to-business single audience, with no wider public profile and awareness.
The methodology Interbrand uses to assess the value of the different brands is:
- It forecasts the current and future revenues specifically attributable to the branded products.
- It subtracts the cost of doing business (operating costs, taxes) and intangibles such as patents and management strengths to assess what portion of earnings is directly attributable to the brand.
In other words, the idea is to assess the flow of added revenues that come because the product has a given brand, rather than no brand at all. The brand justifies a premium price, which, after subtracting the investment necessary to keep the brand where it is, can be considered the gross profit directly attributable to the brand.
Luxury Brands in the Total Brand Universe
Table 4.1 shows how the luxury field fares compared to the other industrial sectors where brands exist. This shows that the luxury sector, with a brand value of nearly €47 billion, ranks only fifth in the 100 most valuable brands. This amount is much smaller than the stock-market value of the major luxury groups. For example, the stock-market valuation of LVMH alone is around €63 billion. This probably arises from the fact that many profitable brands are not among the top 100, and that private family companies are not taken into account.
TABLE 4.1 The Place of Luxury in the Global Brand Picture (2006)
Source: Interbrand, 2006.
It is worth noting that the fast-moving consumer goods sector is three times bigger than that of luxury brands.
Luxury, like the automotive and consumer-electronics segments, is a field in which there are few American brands. In fact, there is only one U.S. brand among the group of fourteen listed in Table 4.2, which serves to reinforce the statement we made earlier that this is basically a French and Italian field.
TABLE 4.2 Interbrand’s Top Luxury Brands (2010)
Source: Interbrand, 2009, 2010, and 2011.
| Brands | Countries | Value (€ million) |
| Louis Vuitton | France | 11,152 |
| Coach | United States | 8,277∗ |
| Gucci | Italy | 6,357 |
| Chanel | France | 3,785∗∗ |
| Hermès | France | 3,415 |
| Tiffany | United States | 2,947 |
| Cartier | France | 2,894 |
| Moët & Chandon | France | 2,872 |
| Smirnoff | United Kingdom | 2,588 |
| Johnnie Walker | United Kingdom | 2,540 |
| Lancôme | France | 2,430 |
| Burberry | United Kingdom | 2,221 |
| Ralph Lauren | United States | 2,209∗ |
| Remy Martin | France | 1,500∗∗ |
| Lacoste | France | 1,225 |
| Christian Dior | France | 1,178∗∗ |
∗Figures come from 2011.
∗∗Figure come from a specific French study dating back 2009.
∗∗∗All other figures come from 2010.
Note: Interbrand’s figures were expressed in U.S. dollars, but for consistency we have converted these to euros using an exchange rate of US$1 = €0.7143.
It is striking that most brand values are gathered around the computer hardware, software, and services and financial services fields.
The Luxury Brands in the Top 100
There are several observations arising from this list of luxury brands appearing in Interbrand’s top 100 for 2010 or 2011 as shown in Table 4.2.
First, the estimated brand value of Louis Vuitton is more than double that of Gucci, and three times that of Chanel. Second, it is significant that ten out of the sixteen brands listed come from France and Italy.
Another peculiarity of this list is that, for some reason, Interbrand does not seem to have respected its own rules. Contrary to its stated criteria, some of these brands (notably Chanel and Lacoste) are privately owned. Indeed, if we add the privately owned firms and the companies that are public but still have strong family control, they account for eleven out of the sixteen firms. Family control, either total or through a majority shareholding, is almost a peculiarity of these top brands. This probably has something to do with the need for a long-term focus in this business, as mentioned in Chapter 2, which is easier to obtain in family-controlled firms.
How has this position evolved over time? Table 4.3 gives an indication by comparing the Interbrand results for 2001 and 2011.
TABLE 4.3 Brand Value Changes Between 2001 and 2010 (€ million)
Source: Interbrand, 2001 and 2011.
Seven brands appear in the results for both 2001 and 2011; two of these have experienced very fast growth: Louis Vuitton, with annual growth of 30 percent, and Gucci with 10 percent.
There are anomalies in the tables: Hermès, Cartier, and Burberry should have been in the 2001 list. In the same way, Bacardi, which was listed in 2001, should not have been omitted from the 2011 list. The fact that this is a private company may explain this but, then again, so are others that appear in the list.
What lies waiting outside the top 100? A joint effort between Interbrand and the magazine L’Expansion provides the opportunity to find some additional values, although this analysis was restricted to the French market. They took all French brands that had a value of over €1 billion, of which they found 23. The luxury brands among them are listed in Table 4.4.
TABLE 4.4 Luxury Brands in the 23 Top French Brands (€ million in 2009)
Source: L’Expansion, June 2010.
| Louis Vuitton | 11,325 |
| Chanel | 3,981 |
| Lancôme | 3,739 |
| Hermès | 2,950 |
| Cartier | 2,542 |
| Moët & Chandon | 2,493 |
| Remy Martin | 1,297 |
| Lacoste | 1,225 |
| Dior | 1,108 |
Three brands that did not appear in the international list are interesting: Lacoste, which will also appear in the RISC ranking in Chapter 5; Remy Martin, the second cognac of the French list; and Dior, which, surprisingly, is listed at a quarter of the value of Chanel, despite the fact that their perfumes and cosmetics businesses are of comparable size. Dior is probably considered to be less profitable.
Another study conducted by L’Expansion in November 2006 asked, “Which brands best represent luxury?” The question was designed to elicit an overall impression of different brands and, in order of importance, respondents mentioned Dior, Chanel, Louis Vuitton, Yves Saint Laurent, Cartier, and Hermès. Might this not suggest that while Dior is not necessarily the brand that people want to buy, it is the one they consider most in tune with luxury and its activities?
The Characteristics of a Brand
Where does the brand get its power? A study by Bernard Dubois and Patrick Duquesne1 found that a brand’s value came from the following elements:
- A mythical value: This incorporates its reason for being and how representative it is of its time.
- An exchange value: This refers to the best value for money, which in itself incorporates the mythical elements mentioned above, and other value components.
- An emotional value: This is quite different in that it deals with emotions and impressions.
- An ethical value: This is linked to social responsibility and the way the brand reacts in the marketplace.
- An identity value: This relates to the way the brand can be used by consumers to convey something about themselves.
We’ll begin by looking at the different aspects of the brand, starting with the brand as a contract. We will then look at the time dimension and finish with the role of brands in society.
The Brand as a Contract
When one company purchases a competitor for an amount above the sum of its net assets, there is a line item called goodwill in the consolidated balance sheet following the merger. This designates the sum total of the intangible, but extremely valuable, positive attitude of consumers toward the acquired company and its products.
Given the market uncertainty that prevails currently, goodwill does not have good press. And, yet, though evaluating it can be problematic, it is a genuine added value, built up gradually as consumers become convinced that a certain brand can provide them with a product whose style and quality is above that of its competitors.
When consumers buy a Burberry or Aquascutum raincoat, they’re not simply buying a raincoat; they’re buying a fashion product, branded by a reputable name and one that has a strong emotional value.
In the perception of the customer, this capital is embodied, above all, in a name. At the beginning of the history of luxury brands, this was, as we saw in earlier chapters, generally the name of a skilled designer/craftsman, and was intended to raise the product above an otherwise standardized level, and to emphasize high-quality production criteria. This seems logical enough because if, as we have said, a brand comprises first of all a capital of confidence, then putting his or her name on a product is, for the vendor, the simplest way of winning that confidence. We are dealing with a fundamental structure in a great number of human exchanges.
As we will see, the name of a brand, or its logo, is an important, visible part of a more complex reality. It provides the mediation between the essential values of a luxury company—its identity—and the perceptions its customers have of it: its image.
Note that what the consumer is looking for behind the brand is the guarantee of specific and superior quality, and strong exclusivity. That long-term assurance forms the basis of the relationship between the consumer and the producer.
This holds for products and sales policies alike. The Saks Fifth Avenue department-store chain has a rule under which a customer can return any product purchased within the previous six weeks for a refund, with no questions asked. For a long time, the Saks stores had Revillon departments. Every year, certain customers bought fur coats there on December 15, and returned them at the end of January. The Revillon teams, pointing out that these customers were abusing the return policy to get a free fur coat every winter, tried several times to convince the store’s management to make an exception to the policy. Saks always refused, considering that even if it left them vulnerable to abuse, the return policy was part of the store’s ground rules, that it constituted a commitment, and that it was one component of its brand identity.
It’s common for managers to speak of the brand as an expression of the company’s genetic program: a stable structure, rich in potential, which concretizes the company’s existence and can win customers’ confidence, but which also imposes strict ground rules. While this is an expressive image, it is can also be a little unclear. We prefer to speak of semiotic invariants and of a brand’s ethic and aesthetic. As we will see in Chapter 6, the manifestations of a brand can be considered for meaning, and these invariants simply make up a basic grammar, a signature of form and content that allows the brand identity to come into being.
In fact, in ordinary discourse, two brands such as Armani and Sonia Rykiel do not express the same values and have distinct brand identities. Giorgio Armani is a very strong proponent of the traditional woman, dressed in a very conservative modern way, with a definite Italian flavor. Sonia Rykiel appeals to a relatively mature and modern woman who is very independent in her choices and who wants to make a different statement. She is also identified very much with Paris, particularly with the Left Bank. Products and positioning must take into account these representations with which they are associated in the customer’s imagination. As a result, they adopt slightly different strategies in order to be recognized, and to win and keep consumers’ trust.
A brand is therefore a contract, one that is implicit in nature and governs the relations between a given company and its customers. This relationship is two-dimensional: It is not only economic in nature, but also, over time, creates emotional ties that are sometimes very intense, with infidelity on both sides, momentary or permanent abandonment, and, above all, a capacity for reciprocal influence on the behavior of the two contracting parties.
The competitive dimension of the brand can be included within its contractual dimension. The brand exists only because it differentiates itself from its closest competitors. This is one of the bases of its identity. The consumer chooses a brand for the specific qualities it offers, and, in this sense, the differentiation of the brand is part of the contract between the two parties.
Because it is founded on differentiation, which is the raison d’être of any brand, such a contract remains implicit. As such, it cannot be confused with the standard regulations of laws governing commerce, which are the same for all. What the brand pertains to is a relationship of another nature, which is exemplified in the automatic-return policy of Saks stores. The brand implies the promise of superior quality and better service; in short, it guarantees added value.
Brands and Time
The prolongation of a contract is intrinsic to the notion of guarantee. In order to exist, a brand must not only establish its reputation, but do so durably. Thus, a chronological perspective is fundamental to understanding brands.
We will begin with a short historical sketch. In looking at brands as abstract entities, we tend to forget that, behind them, there is nothing more than a vendor who is concerned about his customers keeping him in mind. This concern is as old as commerce itself. As early as 2700 BC, artisans affixed a sign to their creations in order to affirm their originality.2 In classical Greece and Rome, merchants used generic symbols to designate the business they were in: a ham for butchers, a cow for creameries, and so on. Individual marks, in the form of seals identifying a particular merchant, made their appearance circa 300 BC. More than six thousand different seals used by Roman potters have been catalogued.
The large-scale explosion of brands—that is, the emergence of the brand phenomenon as we understand it—is largely a result of the Industrial Revolution. Should we view this, then, as a mercantilization of the world? It’s more a case of a transformation of commerce itself. As exchanges became standardized, it became necessary for producers to establish a relationship of proximity with consumers by other means.
The extension of industrial property to the concept of brand appears in Europe in the second half of the nineteenth century. The U.S. Congress enacted the first federal trademark law in the late 1800s and, between 1850 and 1890, the number of patents granted each year in the major Western nations increased by a factor of ten.
The major brands underwent sustained development between 1900 and 1945, and development accelerated between 1945 and 1990. On the other hand—and contrary to what their omnipresence in the media might suggest—the trend since 1990 has been toward a concentration and reduction in the largest companies’ portfolios of brands.
To understand these recent developments, we must look at things on a smaller scale. These fundamental trends, like the individual fate of a given business sector, can be explained by the differential between, on the one hand, the cost of maintaining and developing a brand, and, on the other, the immediate or longer-term profits to be made from it.
The fashion sector has passed through several phases. It underwent its major explosion, characterized by the emergence of the Italian brands, after the Second World War. Armani, Ferré, Moschino, Trussardi, and Versace emerged in the 1970s. During the same period, slightly older brands—Fendi, Salvatore Ferragamo, Gucci—experienced extraordinary growth. Certain provincial brands left Florence or Milan and were soon found everywhere in Italy. They quickly became international, generally with a strong presence in the United States and Japan. However, at the same time or slightly later, a large number of French brands, such as Phillipe Venet and Per Spook, disappeared and others, such as Grès, reduced their activities to a single store in Paris and some license contracts in Japan or South Korea, which brought in royalties to cover monthly expenses. The Grès store in Paris was recently closed altogether. While the luxury and fashion industry doesn’t escape from the concentration of capital, the reduction in the number of brands is less evident there, perhaps because of the versatility of the markets. The novelty effect is a determining factor in consumers’ choices. The result is a permanent renewal of the available brands, yet the total number has been significantly reduced. In France, twenty years ago, twenty-four French firms would present an haute couture parade twice a year in Paris. Today, in 2012, there are nine French brands: Adeline André, Ateliers Gustavolins, Chanel, Christian Dior, Christophe Josse, Franck Sorbier, Givenchy, Jean Paul Gaultier, and Stéphane Rolland.
And yet, an analysis of the effectiveness curves of fashion advertising shows the emergence of what is called a threshold effect. Such studies show that advertising expenditures targeting a very broad range of consumers are only effective beyond €500,000 in France, €750,000 in Germany, and probably €3 million in the United States. The costs of advertising and internationalization have clearly changed the rules of the game. Small brands will have to remain local or disappear.
History hasn’t had the last word yet. There are brands positioned in a specific market that manage, below critical mass, to develop name recognition without advertising. In certain highly selective markets made up of devotees, word of mouth is a powerful force and even more of an advantage than advertising. In the case of fashion, a small, highly innovative brand will sometimes be extremely well received by the press and magazines, fashion writers will adopt it as a favorite discovery, and it will be talked about for its originality. However, middle-sized and older brands, already publicized, but with smaller budgets than those of the competition, will have trouble staying in the race.
While it is true that the globalization of the economy, technological progress in communications, and the volume requirements of the traditional production/distribution industries have made brands indispensable, stronger, and less numerous, we will show that their evolution also depends on the economic sectors in which the brands operate.
Brands and Society
When we think of the presence of brands in today’s society, the first idea that comes to mind is not the quality of the products, but the intensity of the messages.
On his desert island, Robinson Crusoe would not have needed his name if Friday hadn’t turned up. Brands exist only because we can recognize them. We recognize them because we perceive the messages they send, their specificity, and a certain constancy over time. We will have occasion to mention these components—communication, differentiation, and duration—throughout this book.
The communicative dimension of brands operates in two ways. First, the brand sends its messages to the consumers it targets. This is at first a shotgun type of relationship, where a wide net must be cast to be sure of pulling in the targeted consumers. Second, signs, like money, circulate. Brands, too, display this phenomenon.
Let’s imagine the reaction of extraterrestrials who arrive in Times Square in New York, in the Ginza in Tokyo, or in Via Monte Napoleone in Milan. The logos and brand names on the buildings and on the clothing worn by the passersby would probably loom large in their first impressions. They would discover a civilization where brands play an important role in social communication. They would also discover, by comparing different places, the multitude of global brands, their systematic presence in the most famous shopping streets, and the apparent homogeneity they impose on lifestyles.
The explosion of brand communication our civilization is now experiencing would never have happened were it not for the crucial social role that brands now play. The three stripes on running shoes, the polo player embroidered on a shirt, the swoosh on the cap, or the Kelly bag—not to mention the cars people drive or the restaurants they go to—often say more about the personality of those who wear them than their curriculum vitae.
It shouldn’t be surprising, in a society characterized by exponential growth of communication in all its forms and contents, that brands should be at the heart of contemporary life. They guide the purchases we make, influence our judgments about products and people, and force us to position ourselves in relation to the values, or countervalues, or the absence of values they communicate.
These effects are not limited, of course, to the isolated moment of communication (the glimpsed billboard or spot). The way in which brands circulate, are copied, worn, or co-opted shows the extent and depth to which they affect our society. In fact, they have changed our way of living.
First, by claiming a conspicuous share of commercial and communication territory, they have contributed strongly to the transformation of our urban landscapes.
Further, brands convey values. As we will see in Chapter 6, a brand’s identity is made up of invariants that express its vision of the world, the values it believes in and attempts to promote. Nike is the pursuit of excellence in athletic performance, Hermès the aristocratic life, Armani relaxed elegance in the Italian style. Brands oblige us, through their presence in the commercial circuits, to position ourselves in relation to these values. The offering of products and the values associated with them has grown strongly in recent years, giving us a choice our parents could never have dreamed of. We can choose temporary lifestyles as we see fit, and reflect our moods in the way we consume.
Finally, brands are at the origin of numerous actions of solidarity. Whether under the influence of consumers or under the leadership of enlightened managers, they have greatly increased their commitments to causes in the general interest. Again, we will return to the mechanisms and the consequences of such commitments. As we will see, they are closely linked to the communicative dimension of the brands. At this early stage in our examination, we have only touched on these tangible effects on our society.
The Brand and Its Signs
With these initial analyses, we have tried to characterize the broad outlines of a brand’s presence. What are the signs through which that presence asserts itself? They are of several orders, in fact, though often closely interlinked. To express itself, the brand uses these different elements, which are not interchangeable but are complementary.
The most important among them, of course, have to do with the name of the brand itself. The logo, now an unavoidable part of our urban landscape, is what immediately comes to mind. However, the name, in its literal and onomastic dimension—how it sounds to the ear—is also given a great deal of thought and attention by the brands.
We will consider this literal dimension before focusing on the phenomenon of the logo and other mechanisms of recognition.
Brand Names
The name remains the first sign of recognition of a brand. It is never neutral. As we have seen, many brands start with the first name and surname of their founders.
For luxury products, the first name, since it identifies the creator, remains an indispensable part of the excellence and creativity of the brand. Saint Laurent never comes to mind without Yves, or Ferragamo without Salvatore. Yet there are exceptions, which have existed in their present form from the brand’s origins: Gucci, the name of whose founder, Guccio, would doubtless result in an awkward alliteration; Coco Chanel always preferred to use only her surname.
However, when a brand name has taken hold in the collective memory, beware of ill-advised changes. The change of the Marcel Rochas brand to simply Rochas was not at all lucky for the business. In the early 1990s, an attempt was made to return to the original by opening a men’s clothing store by that name in Paris, but the attempt was soon abandoned.
In the field of brand-name management, one of the most interesting phenomena in recent times has been the progressive disappearance of the Christian from Christian Dior. Until 1995, the products and the advertising always bore the complete signature. Then, the first name progressively disappeared. For a long time, it was not shown in full size on the advertising, but on the baseline of the advertising and on the packaging. Today, the brand appears generally without the first name in, for example, the signs of the new stores and in all the advertising material. How should we view this change? Some will think that the company’s directors are playing a dangerous game, and are in danger of progressively diminishing the affective component of the brand among traditional European customers and creating a completely new brand, with fewer roots and more appeal to young Asian and American clients. However, the brand’s excellent results over the last ten years seem to indicate that this segmentation strategy was a good one.
In the history of brand creation, the names of perfumes under a luxury brand umbrella have become more symbolic. Attached to the poetics of evocation, perfume makers set the tone in the 1920s, with “Shalimar” from Guerlain in 1925, and “Shocking” from Schiaparelli in 1931.
In conclusion, what needs to be remembered is that there is no ideal name. If there were, it would be the name of a person, easy to remember in all languages, that evokes the qualities of the product or service offered, that suggests the company’s philosophy, connotes intelligence and creativity, and begins with the letter A or Z to stand out in the listings.
The fact remains that the name, in itself, constitutes a vital asset. It is a source of much worry and enormous investment for companies. A good name has two characteristics: It is easy to remember and has a significant emotional component or rational element. Yet, in these two areas, the best is to be found alongside the worst. Such judgments, of course, imply a high degree of subjectivity. For that reason, we won’t presume to give examples. But we’re reminded of Juliet’s lovely speech in Shakespeare’s Romeo and Juliet:
What’s in a name? That which we call a rose
By any other name would smell as sweet.
That may be so for the name of a flower, but certainly not for the name of a brand.
Logos
Logo is the abbreviation of logotype. It contains the Greek logos (“speech, discourse”) and the suffix type, which in this case suggests the process of impression, as in typography.
Originally, for typographers, this word designated a group of signs that were all printed at once and that were part of the same typographical character. Later, the term began to mean any fixed group of graphical signs representing a brand, product, or company.
Codification is an essential component of a logo. To be easily recognizable, it must present an invariable visual grammar, where the shape of the characters, the size of the symbol, and the colors used are rigorously defined and protected by patent. Also note that the simple fact of codifying the spelling of the name of a brand, even without accompanying visual symbols, already constitutes a logo.
The logo, then, is not the brand, but a particular way of writing the brand. It is the heraldic shield of modern times—a combination of letters or signs, an image, an ideogram, or a group of graphical elements.
The Functions of the Logo
The logo, a unique and recognizable sign, has always served to mark an object, work, or building as belonging to a specific category. Logos appear to have always existed. Stone carvers placed their mark on their work, as did the great cabinetmakers. Roman slaves were tattooed with their masters’ signs, and aristocrats and armies used escutcheons or standards. The word brand originally stood for the mark burned into the hide of cattle with a hot iron.
Communicating via symbols—language, mathematical signs, road signs—is one characteristic of humans. Logos are to modern communication and consumption activities what numbers are to mathematics or words to language: They constitute a new typology of conventional signs. In a way, logos are the new alphabet of an overcommunicating society, the symbols of our time.
The logo plays a role in social relations for two complementary reasons: on one hand, for the informational content it communicates to the consumer before the purchase; on the other, for the perception it will create of this same consumer after the purchase, when he or she will be associated with the logo.
It’s not surprising to see logos occupying such a dominant place in our overmediatized society. They often fill the need for communicative synthesis pushed to its extreme: a maximum amount of information in a minimum number of signs. The synthetic expressiveness of signs as different from each other as the Nike swoosh and the Christian cross is remarkable; independently of their referents, they accomplish an analogous semiotic function. In a few strokes, a maximum number of values or a vision of the world are summed up.
It is difficult to draw a strict typology of logos, since they borrow from a great number of expressive processes. One of the founders of semiotics, philosopher Charles Sanders Peirce, proposed a classification of signs into three categories: icons, indices, and symbols.3 Each of the three evokes a particular type of relation between the sign and the thing it represents.
The icon, Peirce says, is a representation of a “literal” type, based on the notion of similarity. For example, to represent an apple, we draw the contour of an apple.
Indices correspond to a relationship that is more mental, yet extremely strong, between the sign and the thing. It is a trace, an effect, or an element of the thing, which designates its presence without the slightest ambiguity. For example, if we see smoke on the horizon, it does not literally draw fire, but signifies its presence very strongly. (“Where there’s smoke, there’s fire.”) In this case, the association is based on objective correspondences, in the sense that they are guaranteed by laws that are identical for everyone: In Tokyo, as in New York, fire generally makes smoke.
Symbols, finally, correspond to the establishment of an arbitrary link between the sign and the thing: for example, a lion for the Republic of Venice. The force of the symbol rests on the establishment of a common culture. There is no graphical similarity between one and the other, nor is there an objective link of a physical or logical nature. A foreigner confronted with the symbol would not be able to decode it; on the other hand, for all the members of a given community, its meaning is obvious. We could say that a symbol is a federating element. In Greek, symbolon designated the fragments of a clay tablet that had been broken. These pieces were then distributed to the members of a group, who reconstituted the tablet at each of their meetings. When Nike issues a sports advertising spot that it signs only with its swoosh, without even giving its name or slogan, it is obviously playing on the symbolic and federating dimension of its logo as well as its fame.
These categories are abstract. In practice, logos are often hybrid, making use of all three at the same time. It might be better, then, to speak of the different functions of the sign. Let’s take the example of the original Apple logo, which Jean-Marie Floch has analyzed in detail by comparing it to IBM’s logo.4 It can be called iconic, since it represents an apple; indicial (extrapolating a little), since the hollow in the outline clearly indicates that a bite has been taken out of this apple; and, above all, symbolic—the bitten-into apple is laden with rich suggestions, and the rainbow of the original logo also connotes the cultural blend that is California society.
Nevertheless, the symbolic function is by far the one most called upon. This is not surprising. To say that a logo functions as a symbol for a brand is to describe this notion of consumers’ belonging to and having membership in a special and prestigious club. Note that logos that are purely typographical (a very specific way of writing the brand—font, letter size, spacing, and so on) also participate in this symbolic function. In fact, they rely on a set of visual conventions. For example, a serif character5 will tend to connote classicism or neoclassicism, as in the case of Bulgari; a sans-serif font will connote modernity, as illustrated by the Lancel logo.
Ideally, a logo also seeks to take on the indicial function. The brand’s dream, of course, is for its logo to represent it in a way that is as elementary as the way smoke signifies fire, even though such an ambition is utopian. Very interesting examples of this indicial function can be found on the boxes of matches given away by cigarette producers in France. Very strict regulations prohibit the display of their name, their brand, their slogan, or any other distinctive sign on the box; however they’ve still managed to develop very abstract visual grammars, derived from their logos, which still carry meaning. It’s a kind of graphical guessing game, and trying to decode them blind provides a good indication of a brand’s graphical renown.
A Few Types of Logo
In this rapid overview, we claim neither to be exhaustive nor to propose a coherent typology. We devote the bulk of our efforts to logos that are strongly graphical, in an attempt to suggest the diversity of this universe.
Like the seals of the ancients, most logos consist of an image or of intertwined letters.
In the past, certain logos expressed themselves in three dimensions: Rolls-Royce chose the Winged Victory of Samothrace; Jaguar used the Leaper—a metal statuette of a leaping jaguar—as a hood ornament on its sports cars.
Certain logos have a more iconic function. In the category of images, the most frequent are those of animals. This harks back to the heraldic tradition, when animals were a prime source of inspiration for the escutcheons of the aristocracy.
Most often, we will find ourselves in the symbolic register, where the animal is an allegory for virtues that are assigned to it by convention. The choice of the brand name Jaguar, with its stylized but representational logo, is obviously associated with the aspiration to such virtues. And the list is long. There is Ferrari’s rearing horse, an expression of indomitable vitality. The emblem was given to Enzo Ferrari by the family of a national hero, the aviator Francesco Baracca, who had it mounted on his plane when he was shot down over Montello during the First World War. For energy and speed, there is the shark of Paul and Shark; the elephant of Hunting World. For perseverance, there is Morabito’s tortoise; for toughness and intelligence, the Lacoste crocodile. However, many other representative images exist: Hermès’ coach, Ralph Lauren’s polo player.
Another very widespread category draws more from the history of writing and the signature. These are monogram logos, made up of the brand’s initials and its derivatives. What comes to mind first are obviously the two intertwined Cs of Chanel and Cartier, Gucci’s G, Yves Saint Laurent’s YSL, and Loewe’s crab, with its L reflected in two axes.
Finally, there are logos of a more abstract nature, where the arbitrariness of the symbol predominates. This is not a new phenomenon. As with the choice of brand names, abstraction has been a trend for some decades. This is so with Tommy Hilfiger, with its red-white-and-blue rectangle, an extrapolation of the American flag, or Bally’s red-and-white square.
Regardless of the choices made, a good logo should have the power to express and synthesize the characteristics of the brand, symbolic force, and ease of retention through a certain formal simplicity. Achieving all this is not as simple as it might seem, but success gives a brand a considerable competitive advantage.
Managing Logos
Formal fashions change. Those who are responsible for creating graphics are more sensitive than others to such issues and often ask for a logo to be transformed or rejuvenated. They rarely win. This issue is a manager’s nightmare. Many brands prefer to make do with a logo that is seen as somewhat dated rather than take the risk of damaging its fame. The graphical evolutions of logos at major brands extend over entire decades, and each stage of the process is often almost imperceptible.
Examples abound. The British brand Burberry’s decided to alter its name to make it more accessible to an international clientele and, in general, to make the brand more competitive by giving it more modern connotations. This involved removing the apostrophe and the possessive “’s.” (This form is extremely widespread in English in the names of brands and restaurants, but it is less easily perceptible for other cultures.) Thus “Burberry’s” became “Burberry.” Removing the apostrophe and the “s” implies a change in the lettering as a whole, modernizing the brand, doubtless internationalizing it, but maybe slightly destabilizing part of its Anglo-Saxon clientele. These are not the kinds of decisions that can be taken lightly.
Logos are therefore always extremely sensitive to management. Their creation, their aesthetic evolution, and their utilization must be precise and organized to correspond with the general strategy of the brand.
What happens when there is no logo, or at least no graphical emblem? This is the case, for example, with Armani, Tiffany, Ferragamo, and Bulgari, among others. Generally, the company looks for one. But, in the case of an established brand with a rich history, this is not easy.
In the early 1990s, Ferragamo wanted to stylize the brand name, to shorten it and make the founder’s signature more legible. Also, the founder’s baroque logo was very dated and not much used. The company also wanted to attach a graphical emblem. Numerous trials were undertaken. A design with six horses, recalling the founder’s six children, was studied, as was a drawing of the Feroni Palace, the company’s headquarters. However, the best intentions are not always successful, and the brand continues to use the Salvatore Ferragamo signature, whose calligraphy and, above all, whose length, contributes to easy recognition.
Certain brands simply have no emblem and get along without one. The name of the brand, with its colors, graphics, and sometimes its calligraphy, is still the first point of recognition. The pointed Bulgari “U” has such strength as to make the search for an emblematic logo superfluous.
Logomania
Logos are almost omnipresent. Disseminating these totems in all the registers of communication is an easy way of universalizing the representation of the brand. They are visible on products to the point where they have become concrete signs of added value, particularly in the fashion sphere.
Logomania is also cyclical, the last craze dating back to the spring of 2000. By the 2002 fall/winter collections, there was a marked decrease in the number of products that were covered with logos. But, starting in 2004, logos made a comeback, it seems. This has implications that have to be faced; fashion changes every season and can make obsolete an element that is strongly attached to the identity of the brand itself.
As for logos of public or private sponsors, they have proliferated in the past few years on posters and billboards for sports and cultural events. Their presence and, very often, their size on the poster are contractually imposed. Graphic artists often complain about this, pointing out that these additional signs, to which they are sometimes required to devote as much as 20 percent of the total display area, can have a negative impact on the relevance of their communication; they have a point.
We have said that logos, as symbols, presuppose a cultural community, and taking local specificities into consideration appears to be a determining factor in establishing a threshold of tolerance.
Perceptions vary greatly from one country to another. Logos are much better received in Japan than in the United States or Europe. While a majority of Europeans refuse to wear a necktie printed with the acronym of a brand, Americans have no problem with it, and the very same necktie might well become a genuine fad in Japan.
The majority of brands with global ambitions have the wisdom to take these cultural differences into account and have integrated them. Louis Vuitton, for example, offers its Japanese clientele strongly monogrammed bags; for European consumers, the brand offers a fabric in identical colors, but with a checkerboard pattern, or else épi or Taïga leather, where the monogram appears only episodically.
Consumers in Paris and Tokyo are very happy with their Vuitton purchases. They’ve made the effort of acquiring an expensive product and feel that a prestigious logo, one which reflects well on them, is the reward for that effort, provided that it remains below their own particular tolerance threshold. They feel that by carrying the bag in public, they are affirming the values they seek (a certain elegance, perhaps) without the risk of suggesting those they shun (bad taste).
The logo, as the ultimate synthesis of the brand’s communication, must appeal to the eye, heart, and intelligence.
A logo is not a necessary and sufficient condition of success. However, not to have an adequate logo is to miss an incredible opportunity to communicate more effectively.
Other Signs of Recognition
Signs of recognition don’t end with the name of the brand or its logo. Certain brands or products have succeeded in appropriating other elements of recognition and differentiation, often by chance or through repeated usage. Yet they manage these additional distinguishing elements closely.
Baselines have become more frequent as they come to complement a logo that is not always sufficiently explicit of the brand characteristics. Certain advertising slogans, so often heard and repeated in association with the brand, have become extensions operating like synonyms: Nokia’s “Connecting people,” HP’s “Invent,” or Sony’s “Go create,” for example. Faced with the difficulty of finding a logo and a name able to synthesize the brand identity, the addition of a few words often does the trick. Intel’s taking advantage of a logo change to add the words “leap forward” provides a recent example of this. In luxury, brands have often used expressions such as “The art of. . .,” which sounds more vintage than trendy, and seem to have abandoned the creativity theme to the technology companies.
There are examples of cult products that become emblematic of a brand, such as the Hermès Kelly bag or Gucci moccasins. There are also certain distinctive characteristics such as the matte-metallic feel used in most Porsche design products. Color is another important element: A red sports car has to be a Ferrari. Indeed, Ferrari’s monopoly on the color is so strong that it seems a little presumptuous to buy a sports car of another make in the same shade of red. Ducati has done the same with red in the motorcycle sector. Distinctive sound can even be an identifying element: Porsche, Harley-Davidson, and Ducati take great pains to maintain a very specific engine noise for their products, which they have even attempted to patent.
Packaging can also be an element of recognition. Tiffany’s light-blue box and the Hermès orange box are strong aesthetic elements of their individual identity, which travel with the product and are an integral part of the gift.
Labeling, too, is another. It is more important in categories such as ready-to-wear, but it is being discovered, beyond its original function, as an important creative element. For instance, the hot Argentine brand La Martina is attaching—inside and out—all sorts of labels to its famous polo shirts, T-shirts, and leather accessories, and this has become a strong element of its brand recognition.
Whether through names, logos, or other elements, a brand’s signs must be identifiable, expressive, and easy to remember. They must create a feeling of closeness, familiarity, and even humanity. They must communicate a message of belonging, not only to the brand (at the first level), but to its universe and its values. This last point is what will distinguish between a brand that projects meaning and one whose significance is vague. Finally, they must stay in their proper place, not be a nuisance, and never give themselves over to semantic inaccuracy, which could complicate decoding. Their primary role is to speak the brand and its universe with elegance and conciseness. It is the brand’s responsibility to keep a close watch over its signs, their nature, and their frequency.
The Legal Aspects and the Defense of a Brand
There are hundreds of very good books on brand protection, written by legal experts. In this book, it would be impossible for us to even summarize what has been said on the subject. Nevertheless, this is so much of a concern for luxury goods—particularly for watches, perfumes, and leather goods—that it is necessary here to at least give some indication of the methods available for dealing with the issue.
Brand Protection
Brand Registration
The first step with any new brand is to register it. Registration must be done by country and by class. Table 4.5 gives a broadly accepted list of brand categories. For registering a fashion brand, categories 25 and 24 are essential, but so is 18 for leather goods, 9 for glasses, and 16 and 34 for writing instruments and lighters. That’s a total of six categories. For perfume, registering in classes 3 and 5 is essential, and if the ultimate goal is perhaps to come up with promotional articles such as combs or brushes, then it is also advisable to look at class 21. Jewelry and watches have their own class, 14.
TABLE 4.5 Brand Registration Categories
| 1. Chemical products |
| 2. Paint, varnishes |
| 3. Perfumes, soaps, cosmetics |
| 4. Oil, candles |
| 5. Pharmaceutical products, disinfectants, cosmetics |
| 6. Metal tools |
| 7. Machine tools |
| 8. Tools, razors |
| 9. Technical instruments, optical products, glasses |
| 10. Medical and veterinary products |
| 14. Jewelry, watches |
| 15. Musical instruments |
| 16. Paper products, writing instruments |
| 17. Plastic products |
| 18. Leather goods |
| 19. Construction materials |
| 20. Furniture |
| 21. Kitchenware, chinaware, combs, brushes |
| 22. Ropes, textile, and fabric bags |
| 23. Thread |
| 24. Fabric and textile products |
| 25. Garments, shoes, hats |
| 26. Embroidery |
| 27. Rugs |
| 28. Toys |
| 29. Meat products |
| 30. Food |
| 31. Agricultural products |
| 34. Tobacco, lighters |
The ideal for a new brand would be to register in ten categories, but this is not cheap. Brand registration in one country could cost anywhere from €1,000 to €2,000 (taking into account the lawyers’ fees as well as the tax levied by the national registration authorities). In one hundred countries and in ten classes, this could cost from €1 to 2 million. This is not easy for a brand just starting up.
At the outset, it is not necessary to be registered everywhere in the world; indeed, most European countries that have signed the Madrid Convention require only one registration. However, registering in the United States, Japan, China, and in Latin American countries is essential—not to do so is to leave the way clear for unscrupulous local companies to register the name for counterfeit activities.
Registration Renewal
Registration does not remain active forever. It can, depending on the country and the legislation in place, last for either five or ten years. This means that every year it is necessary to renew approximately 20 percent of all registrations at a cost of anywhere between €200,000 and €400,000 for each of the ten classes mentioned.
To renew registration in a given class, local authorities will request proof of usage. If nobody takes legal action for lack of usage and forfeiture of the original registration, things should be fine. Should such action be taken, however, the courts can be very demanding.
For example, in the 1980s, Paco Rabanne was the leader in the field of men’s eau de toilette in Brazil. It was heavily advertised and had a very strong awareness locally. However, as customs duties on perfumes were very high, the company’s local distributor was smuggling the products into the country. When the court asked for proof of payment of import duties, these could not be presented. The court’s judgment was that the brand had never been officially present in Brazil and it enacted forfeiture in classes 3 and 5. The brand was then immediately registered by someone considered by the company to be a counterfeit operator, but whom the Brazilian courts continued to consider to be the genuine brand user for many years.
Very well-known brands can fight this situation by pointing to the worldwide awareness of the brand and, in some cases, to the fact that the brand is the patronymic of a given individual, and that the local operators knew of the brand’s world status when they registered it and were thus not acting in good faith. Paco Rabanne eventually succeeded in recovering its name in Brazil, thanks to the fact that the brand was the official name of Mr. Paco Rabanne, but it took six or seven years to enforce this judgment.
In their main businesses, luxury companies generally do not have difficulty in protecting and renewing their brands. In secondary product categories, it is not that simple. For example, to protect itself against actions for nonusage under classes 24 and 25, Cartier has developed a range of scarves. Very famous brands that do not have a perfume business are well advised to make a standard perfume every three to five years and to invoice it to their overseas subsidiaries or distributors to ensure that there is minimum proof of usage, in the form of receipts for payment of customs duties, in most parts of the world.
The potential dangers of not protecting registration rights are evident in another case involving Cartier. In Mexico, an individual registered the brand before Cartier itself, opened a Cartier store, and traded in Cartier watches before the company could manage to regain its full registration rights. For many years, Lacoste had problems in Hong Kong and China with a locally registered brand, Crocodile, which had a similar logo. The brands finally came to an agreement that the Chinese company would modify its logo in such a way that it would not be confused with the Lacoste crocodile.
While registration for any brand can be difficult, costly, and tedious, it is absolutely necessary, and is even more so for perfume houses. Dior, for example, has to register both its brand and each of its individual products: Poison, Dolce Vita, J’adore, Fahrenheit, L’Eau Sauvage, Capture, and many others.
The Original Registration
It is not easy to register a new brand, not least because, for perfumes, with such names as Romance, Romantique, or Romantic it is likely that the name has been registered and is already in use somewhere. Generally, brand names are generated through creative group discussions or creative sessions, at the end of which maybe fifty names have come up for consideration. A first run on the Internet will probably eliminate most, if not all, of these: The names are already in use or may have sufficient legally acceptable proofs of usage to discourage their adoption. Sometimes a registered letter to a company indicating a desire to start a legal action for lack of usage and forfeiture of its early brand registration may give rise to an opportunity to buy that registration. Where there is no real proof of usage, this may be done for €10,000 to 20,000. Where there are strong worldwide registrations and convincing proof of usage, this may rise to anywhere from €200,000 to 500,000. This is not a very easy subject.
When Paco Rabanne launched its La Nuit perfume, it was possible to sell it everywhere in the world except Venezuela. Caron had tried and failed to get permission to sell its own Nocturne fragrance because a local manufacturer had an eau de cologne registered under the same name. Caron had tried to purchase the name or to negotiate a coexistence agreement with the local manufacturer, but to no avail. So Caron’s Nocturne was sold under a special label, La Nuit, in Venezuela. However, it was willing to free the La Nuit name if Paco Rabanne could obtain a coexistence agreement from the local manufacturer, enabling Caron to sell its Nocturne fragrance under that name. Paco Rabanne tried but never succeeded, and its La Nuit perfume has never been sold in Venezuela.
Fighting Counterfeit Activities
Some activities are considered legal in one part of the world and illegal in others. We examine some of these first, look at the specific case of China, and then move on to what we call the lenient countries.
Knockoffs and Tables of Correspondence
In the United States, supermarkets sell cheap perfumes with labels that proclaim: “If you liked Youth Dew by Estée Lauder, you will love our No.36,” or “If you liked Chanel No.5, you will love our No.17.” In most countries, such products, known as knockoffs, would be prohibited because they exist only by feeding off the awareness of and preference for established brands. Elsewhere they would be seen as unfair competition or, to put it more accurately, commercial parasites, but in the United States consumer advocates take the view that such products provide fair value to the customer and reduce selective luxury perfume houses to what they really are: providers of a given scent that can be copied. Each country has its own system and its own specific characteristics.
Tables of correspondence are the German equivalent of knockoffs. Here, perfumes are sold with a designated number that corresponds with the customer’s usual, more expensive, brand of choice. To openly link any known name brand with a cheaper corresponding numbered brand is prohibited by law as unfair competition. German firms have found a way around this: As long as they and their sales staff don’t make such links, in writing or orally, products can be sold in this way. Again, consumer advocates are very much in favor of these products and this approach, and such sales are strong.
What can brands do about this? The answer is, with both knockoffs and tables of correspondence, absolutely nothing. In other countries, such practices would be fought very strongly.
This is not unlike the Thai T-shirts with the name Chanel, Dior, or Prada embroidered on the front. Such products are clearly counterfeits and are clearly perceived as such. In a way, they are the unwanted outcome of the brands’ success. Whether such things should be fought against is debatable, since the consumers who buy these products are well aware that they are not buying the real thing.
Chinese and Korean Counterfeits
Tourists walking around in Seoul or Shanghai will be stopped quite frequently by people offering fake watches, shoes, or handbags. If they show some interest, they are led to a store down a back street somewhere, and are then presented with as many copies of luxury watches as they could hope for. It seems as though every single brand of watch is on offer, along with any number of handbags. While the watches sometimes don’t work for more than two or three minutes, the handbags are more or less no risk, even if the product finishes are not in line with those of the genuine products.
Again, some might say that it is not necessary to fight such counterfeiting activities, because those purchasing know that the products are fake and would never have bought the genuine articles. This is to put the genuine branded product and the fake into two different market segments. A Japanese or other Asian customer would not be interested in a fake product; they value the legitimacy of the authentic goods too highly. Americans, too, are not interested in anything other than the genuine article. The only ones who are really interested are the Europeans, who believe that they are smart and can get a good deal, and that nobody would know the difference anyway, which is almost never true.
The fight against counterfeiters is never a simple task. It requires both the will and the means to tackle the whole distribution chain, from those offering the fakes in the streets, to the back-street shops, to the wholesaler, and on to the manufacturer. Even if the manufacturer is located and sued, the machinery and equipment are simply moved to another location or sold to another company, and the cycle will start all over again.
Though it may seem an endless fight, it is nevertheless a necessary one, if the development of such counterfeiting is to be curbed and its volume curtailed.
The Lenient Countries
In some countries, authorities are not particularly interested in curbing an activity that provides local jobs and brings in hard foreign currency. Morocco is a case in point. There it is possible to buy copies of every type of branded leather goods, a trade that obviously provides jobs for local leather-goods specialists.
Italy provides another example of where perhaps the authorities may sometimes turn a blind eye where counterfeiting is concerned. In Rome or Vintimille, for example, you can find copies of every single French luxury brand: Chanel, Louis Vuitton, Dior. Strangely, though, it’s much more difficult to get Gucci or Ferragamo copies. Here again the Italian government and police could be more active and more effective. We can only hope that the European Union can bring the necessary pressure to bear to counter such activities more effectively than simple bilateral discussions have been able to achieve to date.
What makes counterfeiting such an interesting activity is the fact that the margins of luxury goods are very high. The higher the power of the brand, the more interesting it is to move into the field. Counterfeit goods are, in their own way, a clear indication of the desirability and power of the original brand.
1. “Des Brevets et des marques, une histoire de la propriété industrielle” (Patents and Trademarks: A History of Industrial Property), INPI (French Patent Office), Fayard 2001.
2. Austria-Hungary, France, German States, Great Britain, and United States. Source: S. Lapointe, for Leger Robic Richard.
3. C. Harsborne and P. Weiss (eds.), The Collected Papers of Charles Sanders Peirce, vols. 1–6, Cambridge: Harvard University Press, 1931–35.
4. Jean-Marie Floch, Identités visuelles, Paris: PUF, 1995.
5. A serif is the horizontal line that serves as the base of the letter in certain typefaces. Fonts of more recent invention tend not to have serifs (and are referred to as sans serif).