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Chateau margaux v0.1
This document provides an agenda and background information for discussing options for marketing and selling the exceptional 2009 wine from a chateau. It discusses analyzing the strengths, weaknesses, opportunities, and threats (SWOT) and performing a Porter's five forces analysis. Two main alternatives are discussed: selling the wine in bulk to negociants or bottling and selling it under the chateau's own brand. Key considerations are presented around product positioning, target markets, pricing, promotion, brand image, and supply. The document concludes with recommendations to be discussed.
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Chateau margaux v0.1
- 2. Agenda 1. Introduction –Main issues 2. Swot analysis 3. Porter’s five forces analysis 4. Third wine alternatives – Pros and Cons 5. Product positioning 6. Marketing mix 7. Conclusion and recommendations
- 3. Introduction - Mainissues Problem statement: Should the exceptional wine from 2009 be sold in bulk or as third wine under its own brand? This leads to different issues: – How to promote it? – How to price it? – Who will be the target customers? – How to supply enough quantities to ensure demand in the long run? – What should be the brand image and product positionning compared to the Château’s first and second wine?
- 4. Strengths Weaknesses 1. Strongbrand equity 2. Experience and expertise in winemaking 3. Strong financial position 4. Promotion 1. Dependency on négociants 2. No experience on launching new wine 3. Snob appeal 4. Weak marketing Opportunities Threats 1. New market demand growing 2. Discovering new geographical markets 3. Low level of rivals on the 3rd wine market 4. On-line sells 2. French wine loosing their position on the US Market 3. Changing consumers` habits 1. Retail sales associates, sommeliers, wine journalists, critics 2. Weather Swot analysis
- 5. Porter’s five forcesanalysis
- 6. Alternatives Pros Cons 1.Sell in bulk for negociants, merchant • Simpliest option • Cost minimization: specialization • Narrow target market • Inaccessible to the core customer from traditional market • Reduce profits and loss of control over final price 2. Sell in bottles under own brand • Uniqueness and excellence • Approach customers from traditional market • Improve and extend product portfolio • Increasing new vehicle to direct communication and sales • No experiences in marketing • Too much brands on market • Risky Third wine alternatives
- 7. Target scope Advantage Low costProduct uniqueness Broad market (Industry wide) Cost leadership strategy Differentiation strategy Narrow market (Market segment) Focus strategy (low cost) Focus strategy (differentiation) Product positioning
- 8.
- 9. Target market -Traditional markets (Core customers) Price - Sold at $97 to distributors - Final price at restaurant $197 - Final price at retailers = $157 Promotion - Ambassadors - Sommeliers - Wine books Brand image - High quality wine at affordable price Supply the long run - If needed, buy from other estates and if successfully growing then buy additional estates Conclusion & recommendations
- 10. Thanks for yourattention Any questions?
Editor's Notes
- #6 Industrycompetitiverivalry : HighMany ‘Old world’ producers and rising ‘New world’ producers.Excessive quantities of products forcing to lower the overall prices.Decline of the Bordeaux wine image: Sommeliers are tired and claim that the quality was reduced.Bargaining power of supplier: HighNo substitute available. Rely on its own production.Produce high quality wine.Bargaining power of customer: MediumMany possibilities and options of products.Middle switching costs for the costumers.Heterogeneous group of customers, they don’t all want the same wine characteristics.Threat of new entrants: LowPremium market requires specific knowledge and expertise; know-how.You cannot produce everywhere, there’s a need for specific weather and soil conditions.Require big investments to acquire land and production machinery.Threat of substitute products: LowPremium market requires a high quality wine, therefore; they won’t change for lower quality wine nor other alcoholic beverages.Threat of substitute products: LowPremium market requires a high quality wine, therefore; they won’t change for lower quality wine nor other alcoholic beverages.
- #9 Product: Name: “Fleur du Château Margaux” or “ Margaux de Château Margaux ”High quality red wine.Sold as a Third wine which is made after blending the two first wines.Place: Bypass the ‘négociants , better control of final price.Direct selling to wholesale distributors and wines boutiques Price: Lower than 1st and 2nd wine.Lower price than Latour’ third wine but from at least equal quality.Affordable price to regain the core customers in traditional market. Benchmark against Latour’s third wine would be sold at $97 by Chateau MargauxTo restaurant through a two-step distribution = $194 (25% profit margin for large distributor and 60% for restaurant)To end consumers through a three step distribution = $157 (25% profit margin for large distributor and 30% for retailer)Price slightly higher for US market (3% more for the distributor)Promotion:Ambassador program, focusing on known Sommeliers around the world and traditionalists consumers.Wine fairs to introduce the brand to new wine customersParticipating on specialized wine books
- #10 Start third wind under own brand! + with own marketing strategy Supply the long run: first additional volume would be satisfy by buying from other estates which will keep the costs to a minimum. Then after few years if the demand for the third wine is growing then consider a long term investment to assure highest volume. Keep the strategy: Close to end consumer, which Château Margeaux has right now