Rob Nelissen and Marijn Meijers of Tilburg University in the Netherlands conducted a series of experiments taking a look at people's reactions to people wearing Lacoste and other designer clothing brands. As they report in a paper in Evolution and Human Behavior:
"Across seven experiments, displays of luxury — manipulated through brand labels on clothes — elicited different kinds of preferential treatment, which even resulted in financial benefits to people who engaged in conspicuous consumption"In other words, buying expensive designer clothes may be a good investment strategy--the costs of the clothes covered by the benefits received. But the effect only works when the origin of the clothes is obvious (i.e. people can see the label).
Dr Nelissen and Dr Meijers think that people react to the labels as signals of underlying quality and propose that this is an adaptation of what goes on in the animal kingdom all the time--the peacock with the best tail wins. However, as The Economist points out, what works in biology doesn't work so well as a status-assessment mechanism. The label takes on more than its fair share of significance--it's our mental shortcut and proxy not just for the quality of the clothes but also for the character and value of the person wearing them.
So, a brand may not be a logo but a logo sure can be an important repository for a brand.