This document provides an analysis of Château Margaux's strategic marketing plan over 5 years. The objectives are to develop the Japanese market and enter the Russian and Chinese markets to increase sales. Tactics include trainings, tastings, repositioning the brand image, and a new customer program. Financial forecasts project increasing annual sales, margins, and net income through targeting new markets and consumers.

1. 1
Strategic Marketing 1
MiM1 Anglo C01
ÉLÉONORE MICHEL
CHLOÉ MORVANT
PAULINE VALLANZASCA
PIERRE-EMMANUEL MORINEAU
PIERRE URIER-CATTOIRE
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2. Table of contents
2
Introduction
I. External diagnosis
II. Internal diagnosis
III. Objectives and strategy
IV. Marketing Mix
V. Budget
Conclusion
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3. Introduction
3
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4. I. External diagnosis
4
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5. POLITICAL
5
Strong points Weak points
 Orientation of Europe toward  Under-age drinking is
alcohol consumption prohibited (18 years Fr)
 Taxes are lowered inside Europe  Political campaign against
drinking and driving in France
 Promotion of French culture
worldwide (candidate for
the UNESCO World Heritage)
 Tax on alcohol except on
French wine productions
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6. ECONOMICAL
6
Strong points Weak points
 Agricultural incentives in  Competition from New World
Europe to go against “rising” wines (California, Australia,
emerging countries Argentina, Japan, Chile)
 Grants for one-time loss  Black markets in some
southern countries
 Easy fluctuations of
investments, money and goods  Financials buy vineyards
within the European Union and do not pay attention to
wine quality
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7. Legal - Ecology
7
Strong points Weak points
 Glass recycling  Legal age: between 18 and 21
years old according to the
country
 Advertising regulation : loi
Evin (1991)
 Export travel causes
pollution
 Organic wines
 Competition but not direct
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8. Social - Technological
8
Strong points Weak points
 Different drinking patterns  Young people drink less and
according to countries less wine
 They are not trained to know
 Europe : tradition drinking wines
wine is in culture (heritage, and
culinary habits, especially in
France)  French people are the most
important consumer of French
wines
 Faster and more precise
machinery in France makes  New technologies can
production easier and faster deteriorate a wine’s taste
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9. II. Internal Environment
9
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10. Product
10
Strengths Weaknesses
 Secured and authentic wine  Expensive product depends on
vintage year
 Product full of history
 Renowned  Specific localization and
distribution difficult to change
 1855: official classification as a
 Pavillon Blanc does not take
“first vintage wine”
benefit from Margaux’s
 Luxury wine seen as an
appellation
exclusive product
 Accessible in limited quantity
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11. Consumers
11
Strengths Weaknesses
 Loyalty to the brand  Principal customers:
connoisseurs
 Established in Europe (United
Kingdom, Germany, etc…)
 People with high income
 French attractive product
 Ambitions about new markets:
Japan, China and Russia
 Evolving taste of consumer
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12. French competitors
12
 Latour (350.000 bottles)
 Lafite (250.000 bottles)
 Haut Brion (153.000 bottles)
 Mouton Rotschild (220.000 bottles)
 Ausone (20.000 bottles)
 Cheval Blanc (150.000 bottles)
 Petrus (30.000 bottles)
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13. Current ranking of wine producers
13
Production Exportation Country % of the world’s
production
1 1 Italy 18%
0 3 France 16%
3 2 Spain 13%
4 6 USA 8.6%
5 7 Argentina 5.2%
6 4 Australia 5.1%
7 10 China 5%
8 9 Germany 3.6%
9 8 South Africa 3.5%
10 5 Chili 3%
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14. New world producer
14
 FROM 1995 up to 2000:
 South Africa: +220%
 Australia: +125%
 Argentina: +73%
 Chili: +160%
 USA: +96%
 SINCE 2000:
Production keep increasing (5 to 20% per year depending on the
country) until the crisis
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15. The French market is changing
15
 Problem :
How can Château Margaux develop it export activity while
maintaining its high-end positioning ?
Current product New product
Current market Develop awareness in France Create a new product
Aim curious people with high (entrée de gamme) in
income or connoisseur of other France and Europe
wines (i.e. Burgundy wine)
New market Use the same product to Create a new product to
increase our market place and attract young people and
develop the company in Japon, (non connoiseurs) all
China and Russia around the world
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16. III. Objectives and strategy
16
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17. Objectives
17
Hypothesis (p.a.) Inflation: 0,1% Production: +0,01% Same quality as 05
This budget only reflects activity related (directly and indirectly) linked to production and selling of Château Margaux
N+1 - N+5: Japan (closer to our market, aim gastronomy traditions and add "French Touch" - product quality): +0,05% p.a.
N+3 - N+5: Russia and China (aim new "Bling-Bling" market and work on brand image): +0,05% p.a.
N+1; N+3: Formation for negociants with whom we work worldwide
Invite international critics
N+1 - N+5: Tastings in well-known and high-end places worldwide
N+3 - N+5: Annual Programm for our best customers (5/year): domain visit and 3 days in 5 star hotel/at the domain
N+2: Reorganise website
 Development objectives:
 Japan
 Russia and China
 Access new clients: developp openess, product
quality as well as brand image
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18. Segmentation
18
 Socio-demographic :
 Men and women above 35 years old
 Social & Economic :
 People with a high level of revenues that allow them to spend
money in quality product
 Connoisseurs of wine products
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19. Targeting
19
 The people we target are nowadays located in Japan,
China and Russia.
 In Japan, there is a strong gastronomy culture
 In Russia and China it is more « Bling-Bling »
 People are interested in expensive products at the expense of
quality.
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20. Positionning
20
 We want to keep the same positionning that Château
Margaux has in France.
 Quality product => High-end product (haut de
gamme)
 It is a product that customers buy for their pleasure.
 To show-off
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21. IV. Marketing Mix
21
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22. Product
22
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23. Price
23
 Vary according to the vintage of the bottles, but always have a high
price. Production have been reduced so there are less bottles (scarcity
of bottles) but higher prices.
 A bottle cost approximately 15 euros to produce, but Château Margaux
benefits thanks to the perceived value approach.
 Usually sold between 200 and 1000 euros/bottle (these last years).
Besides, it is also sold en-primeur (prices vary a lot between 70 and
300) but it is only between 5 to 15 % of the production.
-> is high and climb a lot but it is justified by its high rank and
prestige
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24. Place
24
 Training for foreign negociants in order to allow them to sell our
products properly.
 Tastings organised by negociants, with selected people, and products
from the terroir
 Distribution remains the same: the estate, Château Margaux sell the
production to brokers who take 2% margin and then deal with
negociants on the Bordeaux place who take 15 to 20% margin. Then
importers export the products all over the world.
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25. Promotion
25
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26. V. Budget and follow-up
26
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27. 27
Actual Forecasts
Château Margaux YEAR 0 YEAR 1 YEAR 2
(2005) Margin Margin
Budget Objectives
N0-N+2 Production 150 000 150 150 150 300
1,00% 1,00%
Sales 140 700 000 € 155 074 920 € 0,91% 169 177 849 € 0,92%
COGS/unit 300 € 300 € 1,00% 299 € 1,00%
Development of COGS Total 45 000 938 € 45 000 988 € 1,00% 45 001 036 € 1,00%
Japanese activity Income Statement
Revenues 140 700 000 € 155 074 920 € 0,91% 169 177 849 € 0,92%
Frist training sessions
COGS 45 000 938 € 45 000 988 € 1,00% 45 001 036 € 1,00%
Gross Profit 95 699 062 € 110 073 932 € 124 176 813 €
Beginning of tastings in 0,87% 0,89%
Marketing & Sales 86 667 € 161 667 € 0,54% 86 667 € 1,87%
renown places around CRM & Public Relations 16 667 € 91 667 € 0,18% 16 667 € 5,50%
the world Tastings 50 000 € 50 000 € 1,00% 50 000 € 1,00%
Other 20 000 € 20 000 € 1,00% 20 000 € 1,00%
Reasearch & Development 25 000 € 25 000 € 1,00% 37 000 € 0,68%
Website 12 000 €
General & Administration 125 333 € 130 333 € 0,96% 125 333 € 1,04%
France 125 333 € 125 333 € 1,00% 125 333 € 1,00%
Other regions 5 000 €
Operating Income 95 462 062 € 109 756 932 € 0,87% 123 927 813 € 0,89%
Financial Income 20 000 € 20 000 € 1,00% 20 000 € 1,00%
EBIT 95 482 062 € 109 776 932 € 0,87% 123 947 813 € 0,89%
Interest Expense 750 € 750 € 1,00% 750 € 1,00%
Taxes 31 824 171 € 36 588 652 € 0,87% 41 311 806 € 0,89%
Net Income 63 657 141 € 73 187 531 € 0,87% 82 635 257 € 0,89%
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28. 28
Forecasts
Château Margaux YEAR 3 YEAR 4 YEAR 5
Margin Margin Margin
Budget Objectives
Production 150 450 150 601 150 752
N+3-N+5
1,00% 1,00% 1,00%
Sales 183 459 279 € 0,92% 197 769 103 € 0,93% 212 107 363 € 0,93%
COGS/unit 299 € 1,00% 299 € 1,00% 299 € 1,00%
Reorganise website COGS Total 45 001 084 € 1,00% 45 001 133 € 1,00% 45 001 182 € 1,00%
Income Statement
Start of Russian and
Revenues 183 459 279 € 0,92% 197 769 103 € 0,93% 212 107 363 € 0,93%
Chinese activities with COGS 45 001 084 € 1,00% 45 001 133 € 1,00% 45 001 182 € 1,00%
repositionning of brand Gross Profit 138 458 195 € 0,90% 152 767 969 € 0,91% 167 106 181 € 0,91%
image (more « Bling- Marketing & Sales 296 667 € 0,29% 221 667 € 1,34% 221 667 € 1,00%
CRM & Public Relations 216 667 € 141 667 € 141 667 €
Bling ») 0,08% 1,53% 1,00%
Tastings 50 000 € 1,00% 50 000 € 1,00% 50 000 € 1,00%
Other 30 000 € 0,67% 30 000 € 1,00% 30 000 € 1,00%
New trainings Reasearch & Development 25 000 € 1,48% 25 000 € 1,00% 25 000 € 1,00%
Website
Start of the « Best General & Administration 140 333 € 0,89% 125 333 € 1,12% 125 333 € 1,00%
customers France 125 333 € 1,00% 125 333 € 1,00% 125 333 € 1,00%
programme » Other regions 15 000 €
Operating Income 137 996 195 € 0,90% 152 395 969 € 0,91% 166 734 181 € 0,91%
Financial Income 20 000 € 1,00% 20 000 € 1,00% 20 000 € 1,00%
EBIT 138 016 195 € 0,90% 152 415 969 € 0,91% 166 754 181 € 0,91%
Interest Expense 750 € 1,00% 750 € 1,00% 750 € 1,00%
Taxes 46 000 798 € 0,90% 50 800 243 € 0,91% 55 579 168 € 0,91%
Net Income 92 014 647 € 0,90% 101 614 977 € 0,91% 111 174 262 € 0,91%
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29. Conclusion
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