Preserve the luxury or extend the brand??

Chateau de Vallois

A high-end wine producing estate in Bordeaux, France

Stake holders:Owner:

Gaspard de Sauveterre

CEO:

Francois de Sauveterre

Estate manager:

Jean Paul Oudineaux

In 1855, de Vallois had been classified as ‘Premier Grand du Classe’ which allowed it to charge top price

for it’s wine

They were known for their long term track record in quality and reputation

15,000 bottles of ‘Grand Vin du Chateau’ sold annually

The remaining best of the grapes used to sell 20,000 bottles of ‘Puine’

The rest were sold to other estates

Visitors could NOT buy a bottle directly from the chateau

A U.S customer had to pay $999 for a bottle of ‘Grand Vin’

Quality and Exclusivity contributed to de Vallois brand equity

Claire de Valhubert,Gaspard’sgranddaughter, wanted to make a branded wine and sell it directly.

Younger wine enthusiasts were being priced out of high-end French wines

She worried that less-expensive and less-quality winemakers would take over the next generation

She wanted to make de Vallois enter the “affordable luxury” market

And sell directly to customers

She wanted to introduce branded wine at 20-25 €, targeted at young customers

She wanted to capitalize the brand

Should Chateau de Vallois begin producing amore affordable wine?

Why extend the brand?• A chance to attract and retain the next

generation of wine lovers

• Added flexibility and a chance to stay ahead of the drinking trends

• An opportunity to meet the demands of consumers who want to buy wine directly

•Capitalization on the existing Chateau de Vallois brand

•Monetary benefits and larger customer base

•Assured loyalty from the younger consumers, once they can afford the luxury wine

Why preserve the luxury?• Not enough grapes for a third de

Vallois wine

• Risking the goodwill of the people currently selling the wine

• Lack of expertise in marketing of low priced wine

•Added expenditure on distribution and marketing

•Alienation of core customer base

•Consumers could worry of mixing low quality grapes in the high quality wine

Recommendations

(1).

To keep young drinkers buying and to attract future high quality wine drinkers, Gaspard de Sauveterre must venture into the branded wine market.

(2).

Keep exclusively branded wine independent of the new wine

(3).

Their marketing strategy(for the exclusive brand) should emphasize on the preservation of their brand

(4).

Implement direct marketing, helping the estate better understand wine marketing and their distribution methods

(5).

Create two business units within the

organization

Applying insightsTo the Indian market

Tata Motors is an Indian multi-national locomotive company, a subsidiary of The Tata group and India’s largest automobilemanufacturer

Tata motor’s product mix

Trucks and buses

Hatchbacks

Sedans

Sports Utility Vehicles

TATA bought over Jaguar and Land Rover in 2008 and extended it’s brand over to luxury cars as well

The Tata Nano was Tata’s most ambitious productline extension

TATA motor’s has successfully leveraged it’s brand to enter the affordable luxury market

Tata now caters to high-end car buyers through the sales of Jaguar and Land Rover as well as low-end ones like Tata Nano

TATA also capitalized on it’s brand value and strong customer base to start a number of line extensions

TATA SHUDH CEMENT

A few other successful brand extensions

Paras Pharmaceutical’s entry into personal care products through ‘SET WET’ and ‘ZATAK’ brands

TITAN, the Indian maker of watches and jewellery widened it’s footprints through the launch of SKINN Titan range products

Dabur India Ltd forayed into the packaged milk shakemarket under the brand of REAL fruit juice

conclusion

BRAND EXTENSIONS have been the core of strategic growth for a variety of firms during the past decade

A brand extension when done, should be a perfect fit with the parent brand and resonate with the consumer’s mindset

Created by Yash Akshay Reddy,SVCE during an internship withProf. Sameer Mathurwww.IIMINTERNSHIP.com