Château Margaux: Launching the Third Wine

Cara Slosson

Whitney Goulish

MBA 652

Dr. Lisa Fairbairn

July 17, 2016

Château Margaux: Launching the Third Wine

1. Problem Statement:

Corinne Mentzelopoulos and her management team must make a strategic decision regarding their third wine by determining whether it should be sold to the Bordeaux merchants, known as négociants, for commercialization or to develop a marketing strategy plan that involved positioning, target market selection, price, promotion, and expansion.

1. Situation Analysis:

Mentzelopoulos needs to look and evaluate the 5 C’s in order to understand the marketing environment that she and the rest of her staff are facing in regards to the selling of the third wine. Each of these areas will help to identify areas they need to focus on and make stronger or showcase how they could be affected by the outside environments when trying to market the wine.

Company – Mentzelopoulous should look at the business model of Château Margaux to define what the company does and what their business strategy should look like.  Being a vineyard and producing their own wine, Château Margaux makes a profit based on the bottles of wines that they sell. Without having wine to sell to customers, Château Margaux would be out of business as they would have nothing left but the land that they own. They stay in business year-after-year by the grapes that are grown and then produced into different kinds of wine, which are bottled up and sold to customers in all different parts of the world. These customers then determine the demand and encourage Château Margaux to produce more wine or different kinds of wine. Without, the people purchasing Château Margaux would not be able to operate as they would have tons of grapes and nothing to do with them.  Château Margaux did have a competitive advantage though over other grape growers/wine makers in the area.  

     The competitive strategy for Château Margaux is to deliver high-quality wine, but keep the price according to the selling price of the wine from the year prior. In doing so, they are trying to find unique harvesting methods that their competition hasn’t found  yet to give themselves an advantage. Château Margaux also has an advantage over others because they have produced two lines of wine that have been successful in the last two years so they have current relationships already with distributors as well as customers. Another area where Château Margaux has an advantage is that of the land that they own and the history the company has. The estate had a reputation for producing great wine and had a deep history of dating back into the 12th century. Having this type of ownership of land with history means that many more individuals would be familiar with the types of products that can be grown there. Which would result in less marketing and advertising needs for them previously. However, because the competition has now grown so much, Château Margaux is in a different place today than would have been back when they were one of the few who grew grapes for wine production. Mentzelopoulos should look at keeping these as a competitive advantage of Château Margaux and to add additional ones that the competition is not able to offer to the same customers.