A corporate logo is a component of a brand identity. The shape, color, typeface, etc. should be distinctly different from others in a similar market.
The most effective logos should be recognizable instantly, and should evoke some sort of emotional response. Well designed logos work well at many sizes, and even in one color.
Some well-known examples are: Apple computer's apple with a bite out of it started out as a rainbow of color, and has been reduced to a single color without any loss of recognition. Coca Cola's script is known the world over, but is best associated with the color red; its main competitor, Pepsi has taken the color blue, although they have abandoned their script logo. IBM, also known as "Big Blue" has simplified their logo over the years, and their name. What started as International Business Machines is now just "IBM" and the color blue has been a signature in their unifying campaign as they have moved to become an IT services company.
There are some other logos that must be mentioned when evaluating what the mark means to the consumer. Automotive brands can be summed up simply with their corporate logo- from the Chevrolet "Bow Tie" mark to the circle marks of VW, Mercedes and BMW, to the interlocking "RR" of Rolls-Royce each has stood for a brand and clearly differentiated the product line.
Other logos that have become global: the Nike "Swoosh" and the Adidas "Three stripes" are two well-known brands that are defined by their corporate logo. When Phil Knight started Nike, he was hoping to find a mark as recognizable as the Adidas stripes, which also provided reinforcement to the shoe. He hired a young student (Caroline Davidson) to do his logo, paying her $35 for what has become one of the most well known marks in the world (she was later compensated again by the company).
Corporate identities today are often developed by large firms who specialize in this type of work. However, Paul Rand is considered the father of corporate identity and his work has been seminal in launching this field. Some famous examples of his work were the UPS package with a string (updated in March 2003) IBM, Goodwill Industries and NeXT Computer.
While large corporations spend hundreds of thousands of dollars to update and implement their logos, many small businesses will turn to local graphic designers to do a corporate logo.
An interesting case is the refinement of the FedEx logo, where the brand consultants convinced the company to shorten their corporate name and logo from "Federal Express" to the popular abbreviation "Fed Ex". Besides creating a much stronger, shorter brand name, they reduced the amount of color used on vehicles (planes, trucks) and saved hundreds of thousands of dollars in paint costs. Note also, the right pointing arrow in the new logo is a subliminal hint of motion.
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