The Business of Innovation by Bean Roger;Radford Russell;

Author:Bean, Roger;Radford, Russell;
Language: eng
Format: epub
Publisher: AMACOM
Published: 2002-08-15T00:00:00+00:00

NOTE

1. For an in-depth discussion of decision screens, see Roger Bean and Russell Radford, Powerful Products: Strategic Management of Successful New Product Development (New York: AMACOM, 2000).

CHAPTER NINE

LEVERAGING LOGIC

ARNAUD DE PONTAC WAS A member of the French merchant class, descended from artisans and on the rise socially. Titles would be forthcoming, but the lasting achievement of the Pontac family, and Arnaud in particular, had little to do with titles, French nobility, or French politics.

The Pontacs were lawyers and landowners. They had been upwardly mobile for over a hundred years prior to the period described here—1647. By any measure, they were not poor. But the stone-built family chateau, called Haut-Brion, was an hour from the city, situated on a mean patch of gravelly soil where little would grow. Arnaud’s country property would in fact grow little but vines, vines that had been producing wine here since the Roman occupation. Grapes grew rather well in Arnaud’s modest stretch of rocky terra.

Most of the wine produced here at the time was pretty ordinary and was sold to the Dutch, who were striking tougher and tougher bargains. With the exception of their favorite, sauterne, the Dutch merchants called for bulk wines, undistinguished by area or producer, and as we would say at the onset of the 21st century, price competition for undifferentiated commodity products becomes increasingly fierce. And so it was with wines of 17th-century Bordeaux.

Arnaud de Pontac was no man to stand aside and be driven to penury by the tightfisted Dutch. His property was capable of producing wine well above the average, and he vowed to change his fortune by changing his strategy. Rather than attempt to change the buying habits of the Dutch for the local wine, Pontac turned to London to improve his fortune.

Pontac selected the product of his very best vines to be sold by name, and he called this select produce Haut-Brion, after the family chateau. He produced another, lesser wine from the nearby area of Le Taillan that he sold simply as Pontac. The strategy was highly successful, and the English gentry quickly came to know that wonderful claret could reliably be found in the bottles named Haut-Brion. Samuel Pepys recorded in his diary having an unusually good wine, noting on April 10, 1663, “Drank, as sort of French wine, called Ho Bryan, that hath a good and most particular taste that I ever met with.” The first of the renowned French first-growth chateaus of Bordeaux had been born.1

Pontac had created the first brand name in the world of wine. His Haut-Brion and Pontac wine “brands” were preferred and yielded premium prices over all other claret. Pontac’s innovation was not in technology, production (though he tended to quality), or viniculture. Arnaud de Pontac found his innovation in marketing. He broke out of the mold of bulk production of a commodity-grade product and created increased value by permitting his high quality to be identified by name. He was able to see his situation differently. He was able to think differently.

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