Despite Customer Outrage, Starbucks' New Logo May Be Better For Business

Despite U.S. consumers' threats of protests in response to the redesigned Starbucks logo unveiled yesterday, the new look may be a smart move in the long run as the coffee company expands into Asian markets, according to a Rice University researcher who has studied consumer reaction to logos.

Rice Professor of Marketing Vikas Mittal said a company’s logo is much more than a pictorial representation of the brand, it acts as a visual conduit that enables consumers to identify with the brand.

“Our studies have shown that highly committed consumers also have very high levels of brand attachment. As such, any changes to the brand conduit -- the logo -- are seen as a violation of the psychological contract between the brand and the consumer," said Mittal, who has co-authored two studies on customers, logos and brand commitment.

Starbucks dropped both its name and the word "coffee" from its 40-year-old logo as the Seattle-based coffee chain prepares to triple its locations in China from about 400 to 1,500.

The change has elicited outrage among the coffee-chain’s most loyal fan base. But according to Mittal’s past work, consumer outrage is to be expected. In one of his studies, Mittal found companies that changed their logo design were most likely to estrange their most committed customers.

That would be bad news for any company, big or small. But Starbucks may be making the logo change in the hopes of reaching out to their new Asian consumers.

More rounded

A second study by Mittal found when angular logos were changed to rounded logos, they were more acceptable in interdependent and collectivist cultures -- often found in Asian countries, like India and China -- than in Western countries, which tend to have a more independent or individualistic culture.

Mittal and his co-authors on both studies, Michael Walsh of West Virginia University and Karen Winterich of Penn State University, found the higher the consumer's commitment to the brand, the more negative the consumer's reaction to any changes in the logo design.

A logo change elicited three times more negative thoughts among strongly committed consumers than among consumers with weak commitment to the brand.

The study showed after a change in the logo, strongly committed consumers held a more negative attitude of the brand than consumers who had low brand commitment.

"It is important for companies to refresh their logos, but the process of doing so must be carefully managed," Mittal said.

"Our research shows that companies need to carefully consult customers -- whether through Internet sites or chat rooms -- to ensure that customers feel they have been heard in the redesign and repositioning process.”

Mittal said companies who make their highly-committed customers feel like their voices have been heard will have a better chance at keeping them.

And if Starbucks loses some American fans, they may not worry too much about it.

According to Mittal, though Starbucks seems to have alienated some of its loyal U.S. customers -- some customers have planned protests -- the redesign will likely generate more brand loyalty among new customers in countries such as China, India, Taiwan and Singapore, all of which are strong emerging markets and have consumers who tend to be culturally collectivist and interdependent.

Mittal said Starbucks removing the lettering from its logo gives it a more rounded appearance.

In Mittal’s second study, he compared two groups of consumers: one group was told to have a collectivist mindset and the other was told to have an independent mindset.

The participants were then shown a rounded logo or an angular logo and asked to rate how much they liked the brand on a seven-point scale.

Results showed changing the logo to be more rounded led to a more positive brand attitude among the group told to think as a group (5.9).

In contrast, changing the logo to be rounded was negatively perceived by the group told to think for themselves. (5.0).

Interestingly, in both groups, the weakly committed customers had high brand attitude (5.6 or more).

"Research in aesthetics shows that interdependent cultures prefer rounded shapes as they represent harmony, which is consistent with an interdependent view of the world," said Mittal.

"Those countries tend to have a higher percentage of rounded logos compared with individualistic countries, and logos and product shapes that are rounded are more acceptable and embraced in those cultures."

Armed with this knowledge, maybe the Gap can dig out the updated logo they scrapped a few months ago and see if it flies in Asia?