Preserve the luxury or extend the brand

Preserve
the Luxury
Or
Extend
The BRAND ?
ABHINABA MONDAL,IIT KGP
Daniela Beyersdorfer
and
Vincent Dessain

Chateau de
Vallois

A famous high-end wine producing estate in the
Bordeaux region of France

Francois de Sauveterre (CEO)
Jean Paul Oudineaux (Estate Manager)
Gaspard de Sauveterre ( Ex-CEO )
Claire de Val Hubert (grand daughter
of Gaspard )
Members of the Firm

Francois de Sauveterre ( 25 %)
Claire de Val Hubert ( 25 %)
Gaspard de Sauveterre ( 50% )
Share Holders

In 1855 deVallois had been classified as a
Premier Grand Cru Classe, allowing it to charge
top prices for wineABHINABA MONDAL,IIT KGP

The chateau
now produced
the greatest of
Bordeaux's
five grand
crus classes

150,000 bottles of GrandVin du
Chateau sold annually
The best of the remaining
grapes used to sell 200,000
bottles of the Puine
The rest sold to other estates on the condition of
non-disclosure
of origin

A level-2 distribution channel comprising
negociants and distributors/importers
The average U.S. customer paid $999 for a
bottle of GrandVin, of which Chateau de
Vallois collected between €100 and €450
Steadily profitable since the 1980s

Quality and
Exclusivity
contributed to the
deVallois brand
equity

Claire’s proposal to enter the
“affordable luxury” market could
radically change the centuries old
enterprise

Claire observed that younger
wine enthusiasts were getting
priced out of high-end French
wines

She wanted to introduce a branded wine at
€20 to €25 a bottle, targeted at young
customersABHINABA MONDAL,IIT KGP

What should Chateau deVallois do?

Que faire.. ??

Preserve the Luxury
Or
Extend the Brand?

Factors favoring extension
An opportunity to capture and
retain the next generation of
wine lovers
Increased revenue, profits by full utilization
of the estate
Capitalization on the existing Chateau de
Vallois brand

Factors favoring extension..(contd)
An opportunity to meet the
demands of consumers who want
to buy directly from the chateau
Added flexibility and a chance
to stay ahead of drinking trends
Assured loyalty from younger
consumers, when they are
ready for wines

Factors against extension
Alienation of core customer
base
Dilution of brand equity
Added expenditure on the
marketing and distribution of a
low profit line

Factors against extension..(contd)
Loss of goodwill of the negociants
The need to buy grapes from
other estates due to
of expertise in marketing
of a low priced wine

HOW to DO it BETTER………..

HOW to DO it BETTER………
Let`s see..

Gaspard de Sauveterre should venture into
the branded wine market to
attract young wine drinkers…

Independent management of the different
produceWINES

Francois de Sauveterre should focus only on
the first-growth…and
Claire should hold the office for
the new branded wine

There is also a need for intelligent positioning
of the branded wine such that
GrandVin’s brand equity is
not hampered

Thus, through proper marketing,
Chateau deVallois
may generate revenue from the
branded wine market, keeping
the prestige of its
GrandVin

How can we apply the
insights from this
article ??

How can we apply the
insights from this
article ??
Let`s find out from…

In the context of INDIAABHINABA MONDAL,IIT KGP

Dabur (Dabur India Ltd.) is India's
largest Ayurvedic medicine & related products
manufacturer. Dabur was founded in 1884 by Dr. SK
Burman, a physician in West Bengal, to produce and
dispense Ayurvedic medicines.

Dabur has always been at the forefront of
innovation

Dabur Real Milk Shakes

“With the growing level of health awareness in India,
there has been a spurt in demand for healthy functional
foods.
With the launch of Réal Fruit Shakes, we aim to not only
extend brand Réal to give our consumers more choices
but also make the experience of having milk more
enjoyable and nutritious for kids “

A few other
successful brand
extensions

Park Avenue Beer
Shampoo has
created a path-
breaking category in
the hair care
segment by
launching its first-
ever shampoo for
men in India

Gili, a brand of Gitanjali Group, recently extended into the
apparel category and aims at becoming a lifestyle brand

BUT all Brand Extention are not so
successful….
Few of them lose their way in the market

TRULY…..

BUT……

What if AMUL now extends to
AMUL PIZZA ???

Or AMUL Sauce….

Or AMUL Chutney…..
Stop it
NOW….

As people always find Amul
associated with milk…
These extensions wont work

Can we relate these
lessons to Marketing
Theory ?

A brand is a name, term, sign, symbol, design or some
combination of these elements intended to identify and
differentiate one seller from another

Brand equity is the marketing effect uniquely
attributable to a brand

Brand positioning
Competitive frame of reference
Points of Parity (PoP)
Points of Difference (PoD)

A Brand extension is the use of an established
brand name to introduce a new product

Conclusion

A brand extension when done, should be a perfect fit
with the parent brand and resonate with the
consumer’s mindset

CREDITS
www.google.com
www.slideshare.net
www.yahoo.net
www.freeimages.com
www.EverythingisaRemix.com
www.colorlovers.com
www.fotolia.com
www.shutterstock.com

CREATED by ABHINABA MONDAL, IIT Kharagpur
During an INTERNSHIP under
Prof. SAMEER MATHUR ,IIM LUCKNOW
www.IIMInternship.com

Preserve the luxury or extend the brand

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