Manufacturing Desire. - Review - book review

A Harvard historian offers six tales of firms that mastered the brand.

Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell by Nancy F. Koehn (Harvard Business School Press, $39.95)

Starbucks founder and CEO Howard Schultz will sell you a large coffee, but he'd rather sell you a "Grande"- same coffee, same cup, but with a little something extra. That something - all the imagery and associations you're buying in addition to the coffee - is Starbucks' brand. Schultz has spent 30 years turning his branding skills into grande profits, building a company with more than $2 billion in annual revenue on the premise that, as Schultz put it, his coffee fills "souls, not bellies."

That may seem like a line - and it is. But smart entrepreneurs have long known that identity and imagery are often as important, if not more important, than actual products or services. And smart business writers have known that branding sells books, too. In Brand New, Harvard business historian Nancy Koehn becomes the latest to tackle the topic.

The book's heft and Koehn's sterling credentials would seem to promise more than the usual consultant razzle-dazzle. And indeed, Koehn takes us through six companies she says have best turned branding to their advantage - Wedgwood Pottery, Heinz Foods, Marshall Field's department stores, Estee Lauder, Starbucks and Dell Computer. The promise, mostly unrealized, is that a deeper look at their histories will provide a deeper understanding of how brands work.

The crux of Koehn's argument is that these companies focused on the demand side of the supply-demand equation. Rather than simply tap an existing market, the entrepreneurs behind these companies made new markets. To paraphrase Edward Bernays, they manufactured desire, even as they manufactured teacups or ketchup or coffee.

Thus, Josiah Wedgwood recognized in 1759 that, with household incomes rising, china was a perfect product to sell to an insecure middle class. Nobody needed china - tin plates worked just fine - but by hitching his product to a sense of ambition and improvement, he created a need. And he associated his name with it: Before 1770, Koehn notes, few potters marked their wares. Wedgwood changed that by stamping every object with his name.

The genius of American branding was H.J. Heinz, who turned bottled horseradish into an empire. In a time of food poisoning and fast spoilage, the Heinz brand was "known to consumers throughout the country as a guarantee of a first-class quality of goods," a contemporary wrote. Heinz took that reputation and honed it, giving factory tours (to show how clean his facilities were), packing everything from pearl onions to mustard in clear glass (to prove purity), and providing manicures to factory workers (to demonstrate both his company's cleanliness and his own paternalism). The gimmicks worked; Heinz was one of the first food manufacturers to distribute his goods nationwide.

Heinz has an honorary descendant in Schultz. By the mid-1980s, coffee consumption was slumping, as America's palate was wearying of Folgers and Maxwell House. Schultz's great insight was to reinvent coffee as an "affordable luxury," a chance to step into another world. Starbucks isn't a place to get a large coffee; it's a "third place" apart from the office or home where we can all get a full fledged "coffee experience" for $1.89.

Koehn's history is fine, but her analysis of that history rarely strays past the well-trod ground of her demand-side insight. Creating demand is hardly an epiphany. As her own historical reach makes evident, exploiting consumers' desires has been a common ploy for eons. Michael Dell's inspiration, for instance, wasn't recognizing the demand side, but knowing what to do with it: In his case, build customers exactly what they want.

A great book could be written about the history of branding, tracing how brands have surpassed products in importance, how brand-building has become an unstable pillar of the new economy. Unfortunately, Koehn seems happier recounting corporate histories than examining their consequences.

COPYRIGHT 2001 Standard Media International
COPYRIGHT 2001 Gale Group