Context – The process of making wine is very complex and requires many different parities in order to complete it. That being said, there are a number of issues associated with the production of wine: o Political: There have recently been an increase the number of areas that are producing wine. With new producers flooding the market, there was an increase in the supply of wine which lowered prices across the board. This lead the European Union to impose stricter regulations on vineyard across Europe. o Economic: The growing of wine grapes relies heavily on the weather. Bad weather can ruin grape crops and limit the production of wine and hurt profits. Weather is always unpredictable but it has a major economic impact on vineyards. o Social: Drinking wine is a major aspect of many social event and meals, especially in Europe. High quality wine can also be used to show someone’s social status. Society also places legal drinking ages and limits on people, limiting the market. o Technological: Chateaux Margaux has been on the cutting edge of the latest wine making techniques and has passed that knowledge down for generations. These advances have led to some of the finest quality Bordeaux’s being produced. 3

Chateaux Margaux: The Third Wine Situation Analysis Synthesis Chateau Margaux has a long history of making high quality wine that has earned them an excellent brand value. While the addition of a third wine could increase their profits and differentiate them from other high quality producers, it would also come with various challenges. A third, cheaper, wine could hurt their exclusive brand image and turn away some of their higher end customers. However, it would open up a whole new market segment for them to tap into. It would also require them to form a new marketing strategy for the wine as well as distribution networks. With an ever-growing industry, Chateaux Margaux needs to continually adjust their strategy to remain competitive in the market. Analysis of Marketing Efforts The market segmentation for wine consumers is divided up into six main categories. The first being “Enthusiasts” who make up 25% of the market. These consumers are passionate, well informed, and are constantly looking to expand their pallet and knowledge. Next, there are “Image Seekers” who make up 24% of the market and use wine a status symbol, often going for the most expensive bottle. Making up 15% of the market are the “Savvy Shoppers” who love to try out new brands but usually won’t spend more than 20$ on a bottle. “Traditionalists”, who make up 15% of the market, will only drink well known wines that they are familiar with.