chateau de vallois
TRANSCRIPT
Preserve the Luxury or Extend the Brand? Preserve the Luxury or Extend the Brand?
Written by: Daniela Beyersdorfer &
Vincent Dessain
Overview� Introduction of the company
� The case
� Problems
Alternatives/ solutions� Alternatives/ solutions
� Recommendation
Introduction� Name: Chateau de Vallois
� Location: Bordeaux region of France
� Category: Wine producer
� Products: Grand Vin du, Puiné� Products: Grand Vin du, Puiné
� Classified as a Premier grand cru classé in 1855
.
The CaseCharacters:
�Gaspard de Sauveterre: owner
�Francois: son
Claire de Valhubert: granddaughter (MBA graduate)�Claire de Valhubert: granddaughter (MBA graduate)
�Jean-Paul Oudineaux: Agriculture engineer, expert
cont…
Back ground� de Vallois had been steadily profitable since the 1980s.
� Claire planed to join family business.
� She wanted de Vallois to enter the "affordable luxury" market, selling directly to customers.market, selling directly to customers.
� François, her uncle didn’t believe in that proposal.
Success of Vallois� The estate had fallen into a slow decline under its last
owner.
� Gaspard and Jean-Paul had restored it to its former glory.glory.
� In a ranking of Bordeaux wine estates that recognizes their long-term track record in quality and reputation, de Vallois had in 1855 been classified as a Premier grand cru classé.
De Vallois Today
� The château produced perhaps the greatest of Bordeaux's five grands crus classés.
� It sold about 150,000 bottles each year of its Grand Vin � It sold about 150,000 bottles each year of its Grand Vin du.
� The remaining grapes to produce a second wine, the Puiné ,averaging 200,000 bottles per year.
Problems:
� Château de Vallois is considering whether or not to target a new market – young drinkers who cannot regularly afford the expensive vintage wines.
� Should de Vallois spend on distribution channels, marketing and promotions or not? (Advertisement campaign & market research)
� Is it better to import grapes?
Claire’s Argue
� What might happen if the estate allowed less-expensive, lower-quality wine makers, tocapture and retain the next generation ofcapture and retain the next generation ofcustomers.
Claire’s Desire
� de Vallois to enter the "affordable luxury" market.
� She wants to make a branded wine and sell it directly, as some of the other top traditional Bordeaux estates as some of the other top traditional Bordeaux estates had done.
Jean-Paul (Agr. Er.) sighed!
� Without 100% dedication to excellence de Vallois cannot make outstanding wine. We Vallois cannot make outstanding wine. We already do two wines. Isn't that enough?"
Distribution processExisting distribution process New distribution process
� 70%of still-maturing wine had already been sold to specialist merchants called négociants.
� There is risk of merchants shifting.
� 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.
� They have to develop new distribution channel.
� set up own website to allow them to order directly
� Customers can directly purchase.
Alternatives
Alt.1: Claire’s Roadmap of introducing a new brand
Alt.2: Francois’ non-expansionary way
� launch a new brand wine
� spend on distribution
� In a good year, they don't have enough grapes.
� spend on distribution channels, marketing and promotions
� charge a high price for it because it's exclusive
� have to invest in a distribution channel
� there are risks to marketing the wine themselves.
Reasons behind the recommendation
� In order 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, Googles, and Facebooks of today’s world.
Cont… Reasons
� There is no guarantee that the reputation of Chateau will continue to sustain the competitive edge enjoyed by the company at present.
Chateau must be careful about-� the needs and structure of the new market,
� efficient distribution, supplying, and support mechanisms, adaption is the way to go.
utilizing their own capabilities in a new territory.� utilizing their own capabilities in a new territory.
&
� Where the needs and support structures remarkably differ from the existing market, innovating a solution is necessary.
What do you think?What do you think?
Should not Chateau de vallois
introduce a new brand?introduce a new brand?
If no, Why?
If yes, thumb up!