A CASE STUDY BY

SHREYAS KARWA | DHANASHREE BADLE | JUSTI N MA

Chteau Margaux: Launching the Third
Wine
Global Wine Industry
$60-65 billion annual revenues as of 2013

Chteau Margaux
One of only four (now five) to achieve premier cru (first growth).
First wine- Grand Vin du Chteau Margaux.
Pavillon Rogue du Chteau Margaux.
Pavillon Blanc du Chteau Margaux (white wine).
In 2012, China accounted for almost 35% of sales, Japan and USA sales dropped
by 10%.
Historically leftover wine sold to local merchants.
35% - 40% used for Grand vin, around 50% for Pavillon Rogue.
Situation Analysis
Retaining of 2009 vintage because of its good quality.
Ready for sale by fall 2013.
How best to market it?
Loss of market in USA, Japan.
Uncertainty in year-over-year quantity of third wine.
To bypass or not to bypass the negociants.
Prices highly dependent on Parker Rating of Wine Advocate.
How to position the third wine to consumers?
Concerns and alternatives
Third wine should be able to bring back lost customers.
It should also reach out to consumers in newer emerging markets.
Quality of Third wine shouldnt be below the quality of competitors.
Third Wines image will affect the perception of First and Second.
Historical alternative; sell it in bulk to the local merchants.
Sell the third wine to select set of Bordeaux merchants or negociants.
Market and sell the third wine by themselves.
Alternative 1
Sell to a select set of negociants.
Coordinate with negociants so as to predetermine the third wine market.
Negociants will accept high price for third wine as they want allocations for the
first and second wine.
Estimated price 50% of Pavillon Rogue.
Regulate the prices of third wine.
Alternative 2
Market and sell the third wine by themselves.
Bypass the negociants.
Contact importers and distributors at the right place.
Promote sales to high-end, trendy restaurants; Boutique Wine shops.
Regulate prices, estimate prices and work in reverse.
Market the third wine with Sommeliers in major cities.
Purchase quality wine from other estates and naming regulations.
Purchase an estate in Margaux region.
Recommendations
Marketing and selling the bottled third wine in desired places.
We suggest a brand name of Esprit du Chteau Margaux.
Also, Chteau Margaux should purchase the estate or some part of Chteau
Malescot St. Exupry.
Selling to specific importers to sell in hand-picked restaurants.
Marketing among Sommeliers of trendy restaurants.
Regulating price of the third wine to around $125 at the consumer end; estimate
20%-25% margin for importers and 40% for restaurants.
Quality of third wine should not be below the third wine of Chteau Latour.
Thank you!