Why We Buy Brands: Identity, Signaling, and the Economics of Logos

By Selina Huang

Photo by Umut Sarıalan on Pexels

Every time we choose a sneaker with a noticeable logo, carry a designer bag, or drive a certain car, we are sending messages. The messages are not just functional ones about comfort or transportation, but deeper ones about who we are, who we’d like to be, and how we want others to see us. Brands don’t just sell utility, they sell identity, membership, and symbolic capital.

A large body of research shows that consumers use brands as tools for self-expression and identity construction. In “Identity Signaling and Product Domains,” Jonah Berger and co-authors argue that people often buy products for what they symbolize, not just what they do (Berger et al. 2013). For example, wearing a luxury watch or a high-end car isn’t always about telling time or reaching destinations, it’s often about showing status, taste, or group belonging. These symbolic benefits contribute to why visible logos matter: they are readable by others as cues of group membership or personal success.

Similarly, research on “Consumers’ Identity Signaling Towards Social Groups” (Raimondo et al. 2022) found that individuals are more likely to prefer brands that align with their social groups and the identities they wish to project. People think, consciously or unconsciously, about how brand choices will be interpreted by peers: does this logo signal that I belong to X social class or lifestyle? Brands become social symbols.

The theory of self-congruity also helps explain this: consumers prefer brands whose identities feel consistent with their own self-image. When a brand’s values, style, or symbolism align with the consumer's internal values or the image they wish to present, satisfaction and loyalty increase. Recent work confirms that brand identity not only affects how well a consumer feels a brand matches their lifestyle but also strongly predicts whether they’ll buy it again (Acar et al. 2024).

From an economic perspective, logos and visible branding serve as signals: of quality, status, or group belonging. For many consumers, paying more for an item is partly paying to send the right signal: that one can afford premium goods, values aesthetics, or belongs to a community that respects certain brands. Signaling theory and conspicuous consumption (a term going back to Thorstein Veblen) show that part of what we pay for is the social recognition that comes along with visible brand use. The more visible the brand’s markers, such as logos and other recognizable design elements, the stronger the signaling. Research by “We buy what we wanna be”: Understanding the effect of brand identity and luxury consumption  supports this: consumers derive social value by aligning themselves with brands that match their desired social self-concept, not just internal values (Xi et al. 2022).

Brands also act as anchors in a social environment shaped by reference groups, such as family, peers, and cultural norms. What your friends or family think influences which brands you see as acceptable, desirable, or “cool.” The 2024 Acar et al. study also showed that peer or family influence moderates the strength of the connection between brand identity, lifestyle fit, satisfaction, and repurchase intention. If people important to you value certain brands, you are more likely to adopt them.

Finally, logos offer a blend of visibility and symbolism: they must be seen, recognized, and carry meaning. Many luxury and premium brands invest heavily not just in quality, but in logo design, publicity, and symbolic associations, because the economic return comes from that identity-based premium.

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Acar, Ayşegül, et al. “The Role of Brand Identity, Brand Lifestyle Congruence, and Brand Satisfaction on Repurchase Intention: A Multi-Group Structural Equation Model.” Humanities and Social Sciences Communications, vol. 11, article no. 1102, 2024.

Berger, Jonah A., Benjamin Ho, Yogesh Joshi. “Identity Signaling with Social Capital: A Model of Symbolic Consumption.” SSRN Electronic Journal, 2011.

“Consumers’ Identity Signaling Towards Social Groups: The …” Raimondo, M. A., et al. Wiley Online Library, 2022.

Xi, X., et al. “‘We buy what we wanna be’: Understanding the Effect of Brand Identity and Luxury Consumption Behaviour.” PMC, 2022.