Learning from Branding History
It's probably a result of less-than-fully applying myself during my college years, but I tend to pre-judge any book by an academic as boring. I'm glad that didn't stop me from reading Nancy Koehn's book, "Brand New: How Entrepreneurs Earned Consumers Trust From Wedgwood to Dell."
Koehn is a professor at no less than the Harvard Business School. She is also an excellent writer, and she understands that the essence of getting good information across is stories. Brand New is a book of stories about branding. It is anything but boring.
Koehn divides the book into two giant sections, The Past and The Present.
In The Past, she includes the stories of Josiah Wedgwood, H. J. Heinz and Marshall Field. All the stories are told in detail enriched by facts, insights, and quotes. All of them contain lessons for today's businessperson. Most of the lessons are about branding, but there's a lot more.
Read this book and you will find out all about how Josiah Wedgwood changed the common practice by impressing his own name in the unfired clay of his works. That's impressive. But you will also learn how his partnership with Thomas Bentley took Wedgwood's strengths and his insight about branding and turned them into a highly profitable business.
You'll learn about why H. J. Heinz packed his product in glass jars and how he kept control of his distribution. You'll hear about the 1902 giant opening at Marshall Field's and you'll learn about Field's varying relationships with his partners.
In the section on The Present, you will get the story of Estee Lauder and how she changed not only her name and image but also the face of cosmetic marketing through magnetism and incredible persistence. You'll hear how Howard Schultz wound up at Starbucks Coffee and why it bears his imprint, and you'll hear about Michael Dell without overmuch mention of the legendary dorm room.
The stories themselves make delightful reading, but the learning is probably even more important than the enjoyment. These stories illustrate how specific, successful entrepreneurs took a look around at things that were happening in society and developed products and brands and marketing and distribution systems to take advantage of them. These insightful and inspiring stories will help you understand your own business and find ways to make it more profitable.
a very useful and interesting business history book
Did you know that in 1859 Americans consumed about eight pounds of coffee per year, per capita? Or that by 1939 it was fourteen pounds? If this is your cup of tea, then I think you will like this book. This is not a criticism, I liked the book because it looks at the growth in demand which was supplied by the entrepreneurs who formed the brands described in the book. Indeed this demand-side view is part of the book that made the biggest impact on me.
Some of this is obvious, but somewhat in the backround of our knowledge - "between 1860 and 1920 the population of the US grew from 31.5 to 107 million" - and some of this is well extracted in this book - e.g. "in 1844 (when Henry J. Heinz was born)less than 10% of American's lived in towns of greater than 2,500 population, 75 years later (when he died) 50% were urban dwellers and 20% lived in cities of greater than 250,000 people". Koehn builds up this demand side very well in each of the six cases she uses to illustrate who entrepreneurs build up branded business - Wedgwood , Heinz, Marshall-Fields, Estee Lauder, Starbucks and Dell.
Koehn, a Harvard business historian, is also quite good at showing how developing technology is put to use to serve this demand (or does it create it?) - "In 1830 it took three weeks to get calico from New York to Chicago, in 1860 it took three days, by 1880 ... less than 24 hours"
Again we all knew the importance of the railroad, but here its phrased in a way that makes sense of the dynamic growth and gentrification of the Mid West. She illustrates well the need that urbanisation created for prepared food that could be trusted and describes very well the increasing sophistication of industrial level food preparation - " by the 1860;s the introduction of calcium chloride to boiling water cut sterilization times from five hours to 25 minutes". She can even make innovations in canning technology sound exciting. So much for the good stuff, I did find the tone of the descriptions of each entrepreneurs a bit fawning. Each had the feel of a business case, with the usual tone of awe and deference to the wit and wisdom of the main characters. With the exception of the Starbucks case - where Howard Shultz openly tells of his mistakes and wrong turnings - each case seems to highlight the wisdom of the main character, whereas it seems to me its their determination that marks them out, more than anything else. Henry Heinz went bankrupt three times in food products, before he became successful, Michael Dell was still seen as a cloner into the late 1980's.
Koehn makes no judgements about the more unpleasant side of this determination - Estee Lauder staged a meeting with the Duke of Windsor, which she had photographed and publicised, in order to make it appear she had high-society connections, Josiah Wedgwood supplied free gifts to royalty in the certain knowledge that the aspirations of the middle classes to emulate royalty would drive demand for this his products.
There are good insights into how these individuals drove modern marketing techniques - Wedgwood emphasized showrooms, Estee Lauder the free gift. And all had tremendous energy for customer service and production detail. However in each of the early cases we are told that 20th Century techniques were unknown to the industry " Brand marketing was virtually unheard of in the 18th Century" [ Wedgwood]; " Between 1869 and 1899, real per capita income increased at an annual compound rate of 2.1%. Henry Heinz had no access to these statistics. These numbers are based on economic concepts developed in the 20th Century". This kind of clumsiness crops up in each case, ok we get the point that these pioneers instinctively did something which is now solidified into great theory, but surely this point could be illustrated with more deftness. This apart, a very useful and interesting book, a book for anyone interested in the general history of business. Some excellent details, too much fawning and praise too little criticism of the central characters who built the brands. A fascinating story.
If you liked this book, check out books by Arthur Chandler and John Drewer. One final fact, Charles Darwin had the time and money to devote to his famous voyage on the Beagle - which laid the basis for the theory of Evolution - because his wife's grandfather was Joshua Wedgwood. Was this financial evolution at work?
Overview of successful entrepreneurial approaches to brands
Koehn has produced a weighty and informative look at the way successful entrepreneurs have used brands to achieve a number of goals. These goals include long-term differentiation from competitors, internal quality control, profit margin protection, and facilitation of additional product introduciton. To make her case, she chose three cases from the past (Wedgwood, Heinz, and Marshall Field) and three cases from the present (Estee Lauder, Starbucks, and Dell Computers). Finally, she concludes the book with a chapter which addresses the issue of historical forces and entrepreneurial agency. I particularly found the cases from the past persuasive in their argumentation for a long-term differentiating factor in brand. The newer cases are obviously harder to make in that (particularly with Starbucks and Dell) how long-term the success will be remains to be seen. One of the best features of the book is the depth with which she treats each case-- she provides enough information to build her thesis (and often entertain with the anecdotes) but not so much that the book becomes bogged down. The excellent footnotes provide whatever's necessary to someone looking for further information. One minor quarrel is that I would have liked to see the further reading pulled out into a better organized bibliography. There were obviously quite a few good sources scattered amongst the footnotes and if you were interested in a particular subject matter it required some patience to pull all of the citations out.
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