It is called a lettermark, an illustrated letter, an especially effective type of trademark.
(from Before & After Magazine © 2004)
To design a lettermark, select a typeface and a graphic, then just overlay. Colour and style choices make design possibilities endless.
If your client has a tangible product (the pipe, for example), draw it, a product is usually the most effective identifier. If a literal object doesn't work, try symbolism.
All the designs work by virtue of the psychological concept of Closure in visual perception. Graphic design is a means of communication where inference gives meaning to visual forms.
The concept in force here is called Closure.
It is covered by Gestalt Theories of Perception
Humans are bombarded with countless signals day-to-day. To keep from going crazy, we unify these signals into groups. Gestalt designers are obsessed with how people put objects together in their minds.
Good designs lead people to experience the message you want to convey.
Gestalt Rules of Grouping (Simplicity)
Closure: The mind wants closure. A shape only needs to be implied for the mind to “fill in the gaps” and see what it wants to see. A dominant shape will prevail over seemingly unrelated parts. The substitution of an object for a similarly shaped letter - for example: the use of a banana for one of the ‘ls’ in the word “Kellogg’s implies the use of closure since we see the word mark even though it is incomplete.
Also involved is the principle of
Prägnanz: The mind wants to see things as simply as possible. We will perceive a complex array of lines as a single shape if possible. A tendency to interpret ambiguous images as simple and complete, versus complex and incomplete.