...FACULTY OF ECONOMICS MATEJA PIRNAT, 19554965 UNIVERSITY OF LJUBLJANA INTERNATIONAL MARKETING SCHOOL YEAR 2014/2015 INDIVIDUAL ASSIGNMENT- Chateau Margaux Study Case 1. Describe the current distribution system of the company and explain why it is so important for its brand positioning? Please explain also how the brand is positioned on international markets. Chateau Margaux’s current distribution system is completely traditional, which means that it is handled by the specialized and independent merchants. The merchants are a major part of the distribution system for the Chateau Margaux’s wines. Besides the responsibility for the distribution of wine, the merchants also have other significant roles, for instance negotiating prices, maintaining the relationship with retailers, promoting and positioning the brand. The distribution is dependent on the merchants who are responsible for customer relationships and finding out who the wine consumers are. For this reason they are selected on the basis of their previous relation with the château and their past success in promoting and positioning the brand. One of the major benefits of current distribution system is that it creates a scarcity on the market and helps to gain the better prices and at the same time not give an impression of wide availability to the customers - customers begin to appreciate the wine more and more. The merchants are able to create an enthusiasm around the wine which can affect the whole...
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...harvest. Then they provide with the information the largest buyers. So merchants get the primeur cheaper, but then chateau Margaux can ask for higher process on the bottled markets, which the merchants accept, to get the primeur price for the next year. The merchants allocated wine to their buyers. This makes wine available to their customers. This system profits everybody. For wine industry it’s good because they get the payment earlier and they do not have to worry about distribution. As for merchants they are as well paid early. Customers benefit because they get a high quantity. 2. How is price set? Trace the process from the sale of the first tranche to the sale of a bottle in a wine store for $1,200. Why is the process so complicated? The distribution is mostly performed by the en primeur system. It means that Chateau Margaux sell its wine in barrel and no after bottling when the wine is in advance about the major vintage. This way of distribution is used by most of the chateaux and wine producers because they sell only between 5 and 10% of their wine in after bottling. The en primeur system is characterized by different step that Chateaux and merchants respect in order to fix the final price. This system is complicated because of the number of middle men who are involve in the transaction and how each take a commission , Because Chateau Margaux wants to concentrate on producing the wine they are have many negotiators who are there to sell the wine to the international...
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...Using the aforementioned data, it is easy to conclude that the Chateau de Margaux brand is performing very well, yet there is always a question if a company can be doing even better than they already are. In 1997, the Mentzelopoulos family and Margaux brand had to ask themselves this question- should they extend into the mass market or maintain their exclusivity? In order to draw a conclusion one must investigate alternative ways of expanding, marketing and distributing their brand- which is exactly what we will consider when examining the Château de Margaux business model. New Idea for an Old Brand: As a way to freshen up the traditional brand and to gain more exposure, the granddaughter of the Margaux family wanted to begin mass marketing a new wine brand. The idea would be to use different grapes in order to be more accessible to the younger generation. The target price range would be €20-€25 per bottle (Dessain, 2011). There are a large number of young wine drinkers who cannot afford the high prices of the current Gran Vin brand and are therefore not being attracted to the Château de Margaux vineyards. If these consumers were introduced to an affordable brand of wine from the Margaux estate, then they may be more likely to recognize and trust the brand. That way, when they are looking for a more expensive wine, they will first go to their label of Grand Vin from the Château de Margaux collection. Some of the issues with this suggestion are: maintaining the exclusivity...
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...Consumer Conditions Chateau Margaux Wines Background: Chateau Margaux produces one of the highest quality wines in the world. It is not unusual for a bottle to sell for over $100.00. There has been a tremendous increase in wine usage over the last ten years. This is due to the introduction of lower priced New World Wines in Canada and the United States. These wines come from California, Australia, Chile, Argentina, South Africa and New Zealand. The quality of these wines is very good, and the grape varieties are the same as in France: Merlot, Shiraz, Cabernet, Malbec, Pinot Noir, Shiraz, and Zinfandel. Chateaux Margaux does not participate in the quickly growing segment. They are considering launching a lower priced wine which does not carry the Chateaux Margaux name. They would use the grapes that are very good but are not up to the standards of a Margaux. These lesser quality but great tasting grapes would be able to compete on a price level with Market Measures Size of the Market The wine industry was worth $213.8 billion as of 2005 or 18.9 billion litres. The industry is forecasted to grow 2.7% by 2010 making it worth $243.7 billion. Five percent of global wine production comes from France, worth $10.69 billion in 2005. Category Sales New World wines have created a higher consumer demand for simpler wines. The sales in this category have experienced the most growth of all of the wines. Consumers find the product easier to relate to and...
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...Executive Summary Chateau de Margaux is one of the world’s most renowned premium wine brands for many decades. Their wine offerings include only the first-growth and the second-growth wines. The company been profitable and is considered a very highly reputable and successful premium wine brand from the region of Bordeaux, France. Being successful and profitable often bring up questions like, how can the company do better? With the increasing demand for wine around the world and the increase of number in new wine producers around the world with exceptional potential, could the Chateau de Margaux still be competitive in the future? What are the possible ways for this company to expand and what are the pros and cons of each? In this research paper, we examine the situation of this company, the wine market international viewpoint, and the domestic influence of the wine industry and tradition in Bordeaux. With all the information and data that we researched and analyzed, we were able to locate the problems of the company. In turn, we came up with objectives for the company to fulfill in order to solve all of the problems that arises and to increase profit, increase their skills of today’s new world marketing, increase their knowledge of the consumers and the market, and capture new market opportunities. We come up with a new business model to expand the Chateau de Margaux Company and to help this company fulfill these objectives. The new business model is called the international...
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...Chateau Margaux Case Study International Business March 19th, 2012 “Who knows whether this ancient system will still be working in 20 years or so?” (Executive Manager of Chateau Margaux). This quote, spoken by an executive manager, very proficiently sums up what is happening to the Chateau brand. The Chateau brand has always prided themselves in their unique process for creating one of the world’s finest wines. However they refuse to change their ways because they are afraid it would damage “their soul” (Deighton 9). As the world markets expanded, other companies began changing formulas or changing how they produce their products n order to keep up with the demands for mass production across the globe. Chateau refused to do this because they wanted to keep their identity intact. They were not being affected because of their product but instead were affected due to their management. They refused to market their product or even sell directly to the customer. As other companies began running ad complains, Chateau did not even know who their target market was because they had no information and their suppliers had little information as well. Take the Coke vs. Pepsi war. Both of these companies have mass produced their product and have found the shortest, simplest, and cheapest way to produce their cola and ship it world wide. This does not mean that their product is better than any other cola, in fact there are some minor brewing companies that also make really good cola. Chateau...
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...Candice Yang Week 9 1. What has made Chateaux Margaux (CM) successful? What distinguishes CM’s product, customers and brand equity from that of competitors? During 18th century, Chateaux Margaux experience a golden age because of strong demand for Bordeaux wines by the British; In 1977, Andre Mentzelopouls re-introduced the chateau’s second wine and redefined the Pavillon Blanc white wine. His vision of paying attention to quality and innovation made CM outstanding. After Corinne took over CM, she hired Pontallier to help her. Their combination was very successful. They came up with useful ideas leading to finer wines. They focused on increasing first-growth wine quality. Distinguishes: CM put less of production in the first and second wines and reduced yields overall in the vineyard in order to concentrated the flavors in the remaining grapes. Therefore CM got fewer bottles but with higher quality. While chateau relied on the channel to serve as the distribution and marketing arms for its wine, CM took note of demand shifts. It conducted the “ambassador” program in China to get close to customers in the big increasing market. The brand equity of CM is it offered high quality first-growth wines and good reputation for spectacular wines. 2. Assuming CM will go ahead with a third wine, whom should they target in their marketing efforts? Core customers in traditional markets, like the US, UK, Japan and France. Because CM wines have become inaccessible to the...
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...Château Margaux Case 1- Château Margaux’s distribution system Château Margaux is one of the well-known wines from the Bordeaux region in France. It is famous by the fact that this wine has got a luxury and high quality notoriety, and also stand out from the competitors thanks to the quality of is first growth produce with carefully selected grapes. With only two mains wines (first wine: Chateau Margaux; Second wine: Pavillon Rouge; See in Exhibit 2) Chateau Margaux is a famous wine all over the world. This situation is, in a part, due to its distribution system. Indeed, Chateau Margaux has not got is own distribution system because it entrust the distribution through specialist merchants which have good knowledge about the potential consumer and consequently allocated the product in the right places all over the world. This system allows Chateau Margaux to be concentrate on the producing activity in order to have always the best first growth whereas merchants take care about the promotion and the sale. There are many merchants in the Bordeaux region, where Chateau Margaux’s terroir is located, which assures them to have many choices to select the best specialist to sell the wine. After, selected the right merchant, this one allocate the wine in small amount in markets that they think interesting to create a scarcity climate that search Chateau Margaux to keep is luxury image. More precisely, the distribution is mostly performed by the en primeur system. It means...
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...Background Information & Problem Statement ___________________________________________________________________________ Châteaux Margaux is a historic wine estate in the Bordeaux region of France, which has been producing fine wine since the 15th century. The estate was one of four châteaux to achieve Premier cru, or “first growth,” status in the Bordeaux Classification of 1855, securing its status as one of the finest and most expensive wines in the world. The primary wine produced by the Châteaux, Grand Vin du Châteaux Margaux, is regarded as one of the top wines in the world, while its secondary wine, Pavillon Rouge du Chateau Margaux, was also considered in the top echelon of wines. Although the Pavillon was originally intended to occupy a slightly lower perceived quality point and lower price point, strong reviews of each wines have led to both the first and second wines garnering premier status and commanding exorbitant prices. Due to the increasingly prestigious reputations of the wines fueled by strong reviews by the world’s preeminent critics, Châteaux Margaux has become increasingly selective in selecting grapes for their first and second wines. This increase in selectivity has led to an increase in leftover grapes, deemed to not be of high enough standard for the first and second wines. In the past, Châteaux Margaux had sold the remaining wine in bulk at a low price. In 2009, the Châteaux experienced a particularly strong vintage. This led to extremely...
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...Ottawa Itinerary Attractions Royal Canadian Mint 320 Sussex Drive, Ottawa, ON K1A 0G8 Hours Everyday 9:30AM - 5:00PM Prices | Weekdays | Weekends | Adults (18+) | $6.00 | $4.50 | Kids (5-17) | $3.00 | $2.25 | The Royal Canadian Mint's headquarters occupy the historic building in central Ottawa where the Mint was founded in 1908. Today, the Ottawa facility produces hand-crafted collector and commemorative coins, gold bullion coins, medals and medallions. This is where the master tooling is done to create the dies that strike coin designs for both circulation and commemorative issues. The Mint's gold refining and advanced engineering operations are also located here in Ottawa Canadian War Museum & Museum of Civilization 1 Vimy Place, Ottawa, ON K1A 0M8 Hours Monday – Wednesday 9:00AM – 6:00PM Thursday & Friday 9:00AM – 8:00PM Saturday & Sunday 9:30AM – 6:00PM Prices | 1 Museum | 2 Museums | Adults | $12.00 | $18.00 | Students | $10.00 | $15.00 | Discover the military history of Canada through a vast collection of artifacts, moving personal stories, works of art, and unforgettable photography. Explore the human conflicts that have shaped Canada, Canadians and the world. With its prize-winning, richly symbolic architecture, the War Museum, provides a spectacular setting for exhibitions, public programs and other events that illustrate the way in which human conflict, in Canada and around the globe, has changed...
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...Supply, Demand, and Pricing Supply, demand, and pricing have lasting effects on all products and services globally. If a product is in high demand (sometimes due to trends, prestige, or even necessity) the producer is able to jack prices for higher profit because consumers are willing to buy. However, if consumers are unwilling to purchase items for a higher price and are instead able to substitute with other products or services, than producers may again adjust prices so as not suffer from lack of sales. The wine industry, an ancient industry, has seen significant changes simply in the last 50 years. The ability to create wine has been honed internationally and is used as a steady exportation product for many countries. For example, every state in the U.S. produces wine. This independence in wine manufacturing and the few limitations placed on its trade, have created an overproduction of wines globally. Winemakers and governments have attempted to restrict production in an effort to raise prices but with little success. This overabundance of available wines has affected the wine industry in two ways: booms in premium wine demand and mainstream wine supply. With newly wealthy individuals of newly wealthy countries demanding only premium products, there has been a steady increase in the demand for first-class wines. As expected, winemakers have raised prices on ‘top shelf’ products knowing that consumers with the ability to pay top prices will do so. Like most basic supply...
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...solid-gold, diamond-encrusted toothpick. There’s Competition Though: While they may not be recognized by Guinness, New York food truck 666 Burger offers the $666 Douche Burger that features a Kobe beef patty stuffed with foie gras and gold-leaf, covered in caviar, lobster, truffles, Gruyere cheese melted with champagne steam and BBQ sauce made with Kopi Luwak coffee. While the burger was a satire of La Burger Extravagant, it is actually available for sale, but as of yet, only one person has actually ordered it. There’s also the FleurBurger 5000, from Vegas restaurant Fleur that features a Wagyu beef and foie gras patty with truffle sauce and shaved black truffles. Your order for this $5,000 burger also includes a bottle of $2,500 wine, Chateau Petrus, so really, you’re not just paying for the burger -- but still, the $2,500 burger might be the world’s most expensive, even if it’s not official yet. 4. The Most Expensive Dessert Where You Can Find It: Serendipity 3 (Yes, the same place as the most expensive burger) Price: $25,000 What Makes It So Expensive: The Frrrozen Haute Chocolate ice cream sundae contains a blend of 28 cocoas, including 14 of the most expensive in the world. It is decorated with edible gold and served in a goblet lined with edible gold. As if all that weren’t enough, there is an 18 karat gold bracelet with...
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...‘’Gosse du Margaux’’ A name which in English translates into ‘’Child of Margaux’’. A wine that is created by Chateâu Margaux, one of the four wines that received the highest rank of Premier Cru. The third wine carries the same prestige and luxury that the Margaux clienteles adore. Although the price is moderate paralleled to the existing two wines, the consumers recognize the definition of ‘’child of Margaux’’. Index INDEX 3 1. INTRODUCTION 5 1.1. COMPANY INFORMATION 5 1.2. PROBLEM STATEMENT 5 2. EXECUTIVE SUMMARY 6 3. EXTERNAL AND MARKET ANALYSIS 7 3.1. MARKET ANALYSIS 7 3.1.1. Import and Export 7 3.1.2. Customer Trends 7 3.1.3. Demographics 7 3.2. MAJOR SEGMENTS 8 3.2.1. Fine wine buyers 8 3.2.2. Enthusiasts 8 3.2.3. Image seekers 8 3.2.4. Savvy Shoppers 9 3.2.5. Traditionalists 9 3.2.6. Satisfied sippers 9 3.2.7. Overwhelmed 9 3.3. COMPETITOR ANALYSIS 9 4. INTERNAL ANALYSIS 9 4.1. TARGET MARKET 9 4.2. POSITIONING 10 4.3. COMPETITIVE 10 4.3.1. Competitive advantage 10 4.4. MARKETING MIX 10 4.4.1. Product 10 4.4.2. Place 10 4.4.3. Price 10 4.4.4. Promotion 10 4.5. SALES & PROFITS 11 4.5.1. Sales 11 4.5.2. Profits/Loss 11 5. SWOT ANALYSIS 12 5.1. CONFRONTATION MATRIX 12 6. SEGMENTATION, TARGET MARKET, POSITIONING 13 6.1. TARGET MARKETS, SEGMENTATION 13 6.1.1. Enthusiasts 13 6.1.2. Image seekers 13 6.1.3. Savvy shoppers 13 6.1.4. Traditionalists 13 6.1.5. Satisfied sippers 13 6.1.6. Overwhelmeds 14 6.2. FUTURE PROSPECT...
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...General Information Product related information | Geographic segmentation | Country | United Kingdom is a developed country and has the world's sixth-largest economy by nominal GDP. The UK remains a great power with considerable economic, cultural, military, scientific and political influence internationally. Population UK:63,182,000 | The United Kingdom is a major consumer, but only a very minor producer of wine, with English and Welsh wine sales combined accounting for just 1% of the domestic market.Uk owns many chic and exclusive restaurants. London for example, is regarded as one of the world´s best dinning places with restautants as Dinner by Heston Blumenthal, The Ledbury and Galvin at Windows. | Demographic segmentation | | Gender Education Religion | Male, female Grand school, High school, College graduate, University. 59,28 percent is Christian; 25,14 percent no religion; 4,83 percent Muslim | More female are consuming wine comparing to male, that shows the statistics of the UK market. 80 percent of woman and 45 percent of man drinks wine in restaurants. Only higher graduated people can afford themselves to be able to taste this wine, because of the expensiveness of the wine and the exclusive restaurants who will serve the wine. The majority in UK is christian, and second majority has no religion, that means that it will have no impact on the sales of the wine in the restaurants | Psychographic...
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...Colorado Height University Case study of Marketing Chateau Margaux Xuan Mai Le IBS400 Château Margaux had entered the Mentzelopoulos family in 1977 when Andre Mentzelopoulos, the owner of a French supermarket chain, bought it for about €12 million. It located in Bordeaux region, which produces the most prestigious wine in France. The Bordeaux wine community was initially shocked to see it “fall in the hands of a Greek.” However, they gained confidence in Mentzelopoulos as they saw the complete overhaul of the vineyards with better drainage and new plantings. Château Margaux was part of the French elite of wines known as first growths, five specific wines from the Bordeaux region. Wine critic Robert Parker had recently described Château Margaux as a “brilliantly consistent wine of stunning grace, richness and complexity.” It was often called the most seductive and elegant of all Bordeaux wines. Château Margaux officially classified in 1855 as a "first-growth" (one of only five in the Bordeaux region). A critic commented, “The Château Margaux 1953 is considered a superstar among wines. It just improves in power, elegance and charm with age. Andre's first vintage in 1978 was seen as one of the best Bordeaux wines of the year. Unfortunately, he died suddenly in 1980 before he could see the full transformation of the château. Corine is his daughter inherited the estate. She is 27 years old, high educated and work in the marketing but she does not know anything about wine industry...
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