market segment will jump all over the new “trendy” third wine released by Chateau Margaux if it is set at a premium price. Positioning (4P’s Analysis) 1. Price a. Pricing the third wine is mildly complex due to the multiple channel partners that exist in this industry. For instance, Chateau Margaux must establish a price for the distributors/negotiants knowing that their wine is going to continue to be marked up roughly 20% every time a bottle changes hands. With that said, Chateau Margaux has used competitor pricing to benchmark and reverse engineer a pricing strategy that gives the consumer the best price for their wine after it has been marked up by the merchants and retailers. After the first tranche has been released and reviewed in the market, the price will then fluctuate throughout the year based on supply and demand. 2. Product
a. Chateau Margaux’s selective screening process of what grapes go into each of their wines has allowed them to release/develop better quality wines throughout the years. With EU regulations in place, it is essential for Chateau Margaux to maximize their percent yield of grapes in order to have a supply that can meet demand. The goal of their products is to reflect their high quality reputation that they have maintained for 150+ years. 3. Place a. With different regions all over the globe becoming growing markets for the wine industry, the demand for high quality wine is growing rapidly. Chateau Margaux is faced with a difficult situation with targeting their market segments around the globe because of high mark-ups on their wines after they have been sold to negotiants. Therefore, a lack of control with the price of their wine has forced them to consider different distribution strategies in order to hit their target markets in expanding market locations around the globe. 4. Promotion a. Promotion of the third wine part of unfamiliar territory for Chateau Margaux. For instance, Chateau Margaux has relied on very little marketing efforts to push their wines and have instead been promoted by other critics and journals that rate other brands in the wine industry. With that said, Chateau Margaux has lost the interest of sommeliers located in high-end restaurants because of the price increases. As a result, Chateau Margaux must decide if they are going to continue to let negotiants and critics promote their wines or if there needs to be some sort of internal marketing push for their brand.
Root Cause Analysis Maximizing Grape Production It was determined in the past that only about 70% of Chateau Margaux’s grape production could be utilized to make both their first and second wine. Chateau Margaux’s emphasis on developing a first class wine that validates their brand’s reputation has caused for the company to be very selective of the grapes that go into the winemaking process. For instance, in 2011 the percent yield used to make each wine for the first two wines was 38% for the first wine and 28% for the second wine. Now in the case they discuss how they believed that there
You've reached the end of your free preview.
Want to read all 13 pages?
- Summer '20
- Marketing, Chateau Margaux