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preserve the Luxury or Extend the Brand?
- Claire, the granddaughter of the owner of Chateau de Vallois, wants to expand into the affordable luxury wine market by selling directly to customers, but her uncle François disagrees with her proposal. - Currently, 70% of the wine is sold to merchants a year before bottling, who then sell to distributors and importers, not allowing customers to purchase directly from the winery. - Claire's plan would require investing in a new distribution channel, marketing, and expanding resources, but could reach more customers, increase brand usage, and lead to more sales through direct customer purchases. However, it also carries risks that François is concerned about.
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preserve the Luxury or Extend the Brand?
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- 4. • Name :Chateau de Vallois • Location: Bordeaux region of France • Category: Wine producer • Products : Grand Vin Du, Puiné. • Classified as a Premier grand cru classéin 1855
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- 6. • Gaspard deSauveterre: owner • Francois: son • Claire de Valhubert: granddaughter (MBA graduate) • Jean-Paul Oudineaux: Agriculture engineer, expert
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- 8. • de Valloishad been steadily profitable since the 1980s. • Claire planned to join family business. • She wanted de Vallois to enter the "affordable luxury“ market, selling directly to customers. • François, her uncle didn’t believe in that proposal.
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- 10. Grand Vin duChâteau de Vallois 150,000 bottles each year €100 to €450 up front for a bottle . Puiné 200,000 bottles each year. The remaining grapes were sold to other estates on condition that their origin would not be revealed.
- 11. Success of Vallois •The estate had fallen into a slow decline under its lastowner. • Gaspardand Jean-Paul had restored it to its former glory. • In a ranking of Bordeaux wine estates that recognizestheir long-term track record in quality and reputation,
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- 19. Existing Distribution Process •70%of still-maturing wine had already been sold to specialist merchants called négociants. • The négociants bought the wine a year before bottling and then sold it to distributors and importers. • Customers could not purchase a bottle of wine directly from the château. New Distribution Process • There is risk of merchants shifting. • They have to develop new distribution channel. • set up own website to allow them to order directly • Customers can directly purchase.
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- 21. COST BENEFIT ANALYSIS COST •Investment(distribution channel, marketing, resource expansion) • Risk of goodwill • Geographical barriers • Process modification • Less profit Margin • Different type of Business • Danger of pursuing the wrong marketing activities BENEFIT • More Customers • More usage of brand • Product diversification • Geographical diversification • More sales • Professional board of directors because larger business
- 22. EXAMPLE IN INDIA •BOSE- an iconic sound and music device manufacturer. • Less advertising. • Popularity due to the quality and loyalty to customers. • Serves both expensive and affordable market price.
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- 24. REASON BEHIND RECOMENDATION • Inorder to retain its competitive advantage, a company needs to realize its full potential, and this includes reaching out to new markets. • A case of Microsoft : MS was an indomitable entity ten years ago, but has now lost its appeal to Apples, Google, and Facebook of today’s world
- 25. CREATED BY HARSHVEER SINGH,JSS NOIDA , during an internship by Prof. Sameer Mathur, IIM Lucknow. www.IIMInternship.com