preserve the luxury or extend the brand?
TRANSCRIPT
• 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
• Gaspard de Sauveterre: owner • Francois: son • Claire de Valhubert: granddaughter (MBA
graduate) • Jean-Paul Oudineaux: Agriculture engineer,
expert
• de Vallois had 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.
Grand Vin du Château 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.
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,
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.
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
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.
REASON BEHIND RECOMENDATION
• 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, Google, and Facebook of today’s world