Chateau Margaux

LABU 101

Marketing Château Margaux Napo, Connie, Crystal, Christy

Background Information • Primary Goal: – To protect the brand – To command a price at the very top of the five first-growth Bordeaux wines

Background Information • Types of Wine produced: – Château Margaux • Part of the French elite of wines as first growth • Price varies according to the factors of production, e.g.: weather, quality of grapes

– Pavillon Rouge • Use grapes that are not included in the selection of Château Margaux • Highly-priced

SWOT Analyses

SWOT-Strengths • Established brand - represent good quality, elegant, seductive wine - company philosophy: rather earn less than risk the quality • Mature technology - high quality human work

SWOT-Weaknesses • Relies heavily on the merchants, importers and retailers • No knowledge about the consumer base – No own distribution system – Mainly sold through the Bordeaux merchants – No information at all

• Immature marketing team – Relatively new concept in the industry – A sign of weakness

SWOT-Opportunities • Huge pool of luxury consumers in Asia, esp. China • Tariff on wine in China has decreased, hence favours the entry of China market • Chinese consumers drink 0.7 litres of wine per year * 1.3 billion= 9.1 billion litres huge potential to explore

SWOT-Threats • Competition from New World producers – Australia, South Africa and California

Reasons: – – – –

Better in Marketing Lower costs Comprehensive labels Improved production techniques and quality

Dropped market share by 10% in 10 years

SWOT-Threats • Changing consumers’ taste – Tend to taste the wine which is easier to taste and understand

SWOT-Threats • Changing consumption pattern – Tasting wine vs drinking wine – Our wine is better for drinking – More complex pleasures when wines are aged

Actions to take 1. Entry to China Market

4. Contact James Suckling => Journalists of Wine Spectator

PEST Analysis in China • Political – Entry to WTO  tariff cancelled price ↓ – Greater competitive power

• Economical – GDP per capita ↑ – Greater purchasing power – Huge potential market

PEST Analysis in China • Social – ↑contact with foreigners – Treat wine as a symbol of social status

• Technological – Mature technology – Economies of Scale

Actions to take 1. Entry to China Market

4. Contact James Suckling => Journalists of Wine Spectator

Actions to take 3. Wine Fair for connoisseurs => reinforce old ones => attract new ones 4. Constant Price => keep brand image

References • www.chateau-margaux.com/