Chateau Margaux

Seydou Bocoum

Devry University

Introduction

Château Margaux, one of only five prestigious estates in the Bordeaux Medoc wine region to have been classified as a "first-growth", is facing a host of strategic decisions in early 2013. Up until this point the estate had been selling two red wines, a first wine whose retail price often exceeded $1000 a bottle, and a second wine whose retail price often exceeded $200 a bottle. Owner Corinne Mentzelopoulos and her management team were now preparing to launch a new third wine made from the estate's production not used to make the first two. They have to decide whether the best go-to-market strategy is to sell the third wine to the local Bordeaux merchants and relinquish commercialization to them or to devise a complete marketing plan for the new wine that includes: target market selection, positioning, and quantity to release, pricing, channel structure and brand name. Mentzelopoulos was considering the optimal marketing for the third wine in light of bold moves by other first-growths, such as the purchase of vineyards in the Bordeaux region, global expansion, and deviation from the centuries-old tradition of selling wine in the futures market.

Case Analysis

Corrine Mentzelopoulous, proprietor of Chateau Margaux, one of the fist classic growth wines, is considering the possibilities of growth and market expansion. While the entire production of Chateau Margaux is sold out each year, and while its premium price continues to rise every year, she wonders if the famous Chateau Margaux might not be more profitable, for example by extending it or by direct distribution. The time honored Bordeaux wine distribution system works well for all parties involved, but Mentzelopolous wonders if it can't be improved. Although wine connoisseurs in Western Europe and the United States account for a major part of the sales of first growths, markets in China, Japan, Singapore, and Russia are growing rapidly, and Mentzelopolous ponders whether to shift focus. Wine prices and sales are also strongly influenced by the opinions wine bluffs; the most notable is the American expert, Robert Parker. Mentzelopolous must decide whether to change her product line, whether to with draw partially or fully from the current distribution system or maintain the status quo, and whether the shifts in the markets and consumer tastes are as important as some in the industry think