University-branded goods are big business in the US - but it's a different story in the UK. Kate Worsley looks for the bottom line on what a logo is worth in profit and image

The last time the college sweatshirt was trendy was the 1970s. Student radicalism made university-crested gear as cool as long hair and loons. Today the last logo most students would wear is that of their own institution.

Seeing their students parade about as walking billboards for international companies from sportswear manufacturers to fashion houses - everything but their own college - keeps UK university marketing managers awake at nights. How can campus merchandise hope to compete with the likes of Camper, Nike and Man United?

It is a whole different ball game in the United States. Ivy League institutions such as Yale and Harvard universities have long exploited their names by marketing a range of branded goods. In 1997, Yale went as far as introducing its own branded mineral water and gave it away to freshmen and in promotional gift bags. The university has also trademarked a range of clothing that alumni have adopted with enthusiasm.

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John Hilsdon of the Chartered Institute of Marketing puts such successes down to the nature of the US market. Colleges there, he explains, sell to a tight-knit student and graduate body, which already has a strong sense of community, as well as to all those who would like to join the varsity club. Over here, it tends to be the wider public perception of an institution that is marketed, especially its role in the nation's heritage. Helpfully, many British institutions have long been preoccupied with dress and presentation, and this led to the creation of prototype branded goods such as coded ties and scarves. This makes the heritage market - tourists and students' families - perhaps the most lucrative target market.

It is no surprise, therefore, that Oxford University is the UK's top merchandiser. It makes about ?250,000 a year out of licensed merchandise that is sold in outlets worldwide.

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The university's commercial conversion came late. In the 1980s, Oxford's streets were awash with cheap sweatshirts and scarves produced by canny merchants. The university did not see a penny of profit and felt that its image was being tarnished. After a tussle with local traders, who argued that the university arms was so ancient as to be in the public domain, the university introduced a new, offical logo.

In 1990, the university and its licensing managers gave their stamp of approval to a quality merchandising operation called the Oxford Collection. The collection became a subsidiary of Liberty and was sold in its Oxford shop and to top-end outlets such as Harrods. When Liberty closed its out-of-town stores, "University of Oxford Collection" opened a high-street shop of its own.

The company has an annual turnover of more than ?5 million. Its university-linked souvenirs are sold more widely around the world than even Ivy League memorabilia. Its Oxford High Street shop alone turns over ?350,000. Kathryn Fulton, the marketing and development manager for Oxford Ltd, says profit goes directly to the university for "general purposes".

Japanese and US tourists will buy almost anything bearing the Oxford trademark, says design director Ray Stringer; British buyers go for items that evoke that "Oxford feeling" - resin gargoyles and pewter inkwells.

Cambridge University does not have its own shop, but since 1993 it, too, has been licensing souvenir producers. "We have no plans to set up our own trading company," says assistant director for marketing Neil Stevenson. "We get the profits without any of the hassle, and I'm told our way tends to be more profitable than Oxford's."

According to Chris Hesketh of Cambridge University's development office, income from licensing the university name is about ?100,000 per annum.

Licensees' designs are tested by the university's agents and sold in approved outlets around the city. A range of toys produced last year by Toy Brokers Ltd is on sale nationwide.

Ryder and Aimes, a 120-year-old outlet in the high street that also sells the university official robes and ties, is the longest-serving licensee. It pays a varying percentage of the wholesale price of each item to Cambridge's development office. "We were quite sceptical at first - after all, we'd been trading for 120 years without paying any money to the university - but the licensing arrangment protects our interests too," says Ryder and Aimes partner Tony Chamberlain.

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Students tend to go for their college T-shirts, while tourists want the Cambridge University logo. Over the past decade, the tourist trade generated by rising numbers of conferences, summer schools and language schools has grown to make up 50 per cent of their business.

Most other institutions lack the public profile to try anything like the scale of the Oxbridge operations. Even institutions in tourist hot spots such as Edinburgh and Bath are not sufficiently associated with local heritage to make much impact. Their merchandising activities are a motley assortment, shared between the development, marketing and student operations.

Cranfield University, with its huge contingent of overseas business students, is a case in point. "No, we don't sell to tourists," says Sue Richardson, the university's executive administrative assistant, amenities. "We're in the middle of nowhere. We only have 2,000 students, but we sell a lot of goods on graduation. Lots of students from Hong Kong buy the more expensive gifts as long-term mementoes."

At Brighton University, Solveig Grover, who had worked for W H Smith and HMV, became conference and events organiser in the business services department two and a half years ago. She has increased sales by 475 per cent, mainly by making the products more visible and more available.

"I'd like to do more smaller items such as a good ball-point pen or keyring, and we do get asked for a scarf or tie quite a lot," she says. "Part of our logo is a silver star, and we're developing photo frames with the star on them. But you have to be careful. We did a very nice crystal tankard with a silver star that was just too subtle and didn't really sell."

Any profit is returned to the university, but the aim is to raise the profile and break even rather than to make money.

The University of Bath handed its merchandising over to the student union last year, while the University of Edinburgh sells merchandise through its information centre, which turns over ?50,000 a year. Any revenue goes towards staff salaries.

The University of Manchester's development office puts any profit into its student hardship fund. "It's no good trying to make a quick buck out of selling them beer mugs," says Manchester's director of development, Will Eades. "Our suppliers say that being able to claim that 10 per cent of an item's price goes into college funds works as a sales technique, but that's about it."

Eades concentrates on "affinity marketing", which includes university credit cards (which have netted Manchester ?130,000 a year since 1994) and targeted goods and services such as email networks for students. "We're more concerned to look at the sort of aftercare we provide. Graduates are more hard-nosed now, they want to see where the benefit is to themselves."

So could colleges do more to make money out of merchandise? John Hilsdon thinks not. He feels that attempts to build image, let alone revenue, on merchanising alone are misguided. "People buy branded merchandise because of how they feel about the institution itself. It then becomes a self-fulfilling prophecy: if someone in the sixth form sees a student wearing their university T-shirt in the summer holiday, they realise that if people are prepared to pay money to wear a logo, that says something good about the place.

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"If I were a marketing officer, I'd be concentrating my efforts on marketing the institution itself and hoping that the merchandising revenue came along as a byproduct of that."