EM Lyon Business School MK 103 – Brand Management Mr. Lionel SITZ
Jean-Christophe ABELA Isabelle ALIX Louis-Martin DUFAY Amélie SCHRAMM Alexandra WECHSLER
I. Presentation of the firm and the wine market
Château Margaux is a wine estate located in the South-Western part of France, close to Bordeaux, and producing two different red wines (Château Margaux and PavillonRouge du Château Margaux) and a white wine (Pavillon Blanc du Château Margaux). Eighty carefully chosen hectares are dedicated to vineyards for the red wines, 12 other hectares to vineyards for the white wine. Being one of the first wines to achieve the 1st growth status, Château Margaux wine immediately took part in the Bordeaux 1855 classification, elaborated by Napoleon and listing the fivebest Bordeaux wines. Château Margaux has always been and still remains a very famous wine all over the world thanks to its high quality and its seductive taste. A perfect mix of different elements is used in the production of Château Margaux wine to make such a perfection possible: a good climate, a “grand terroir” (great soil), the right grape variety, a high-quality human work. Since 1977, ChâteauMargaux belongs to the Greek family Mentzelopoulos. Quite rejected at the beginning because of his nationality, André Mentzelopoulos directly tried to restore the declining estate to a level worthy of its history and reputation. And he made it! Only 3 years later, when he died, his daughter Christine took the lead of the estate and never stopped her efforts to maintain the brand image amongconsumers. In 1983, she even hired M. Pontallier as Young General Manager to help her succeed. Today 74 persons work for Château Margaux. The estate produces no less than 150,000 bottles of its first growth wine a year, 200,000 Pavillon Rouge and 33,000 Pavillon Blanc. Château Margaux is a reference in the wine industry and it perfectly matches people perception of French luxury. However, a part of thegrape production is not used by Château Margaux. Actually, 10% of the grape production is sold in bulk to other wine merchants to be included in their generic wines. Château Margaux is an icon but is not the only famous Bordeaux wine. It is in competition with other estates also producing first growth and “cheaper” wines such as Château Latour, Château Laffite, Château Haut-Brion and ChâteauMouton-Rotschild. Nowadays the most dangerous competitors may be the foreign producers which are playing a growing role on the red wine market. Any wine drinker can now quote other good quality red wines such as Californian or Australian ones. Although connoisseurs clearly perceive the difference in quality, new consumers with little education over the subject could sometimes prefer the firstimpression given by cheaper wines. Whereas Château Margaux improves throughout time, a Californian wine reaches its top level very quickly. Growing in the past, the wine sector now undergoes a global crisis. Bordeaux vineyards do not escape from it. But we will see later that the high quality wines remain in a better situation (+1.5% in 2008). The traditional European consumers are less and less consumingwhile people from emergent countries are more and more attracted by wines and more particularly French Bordeaux. For instance, French wines sales rose from 145% in the Chinese market in 2007. Moreover, this is quite easy to understand the importance of foreign demand when you keep in mind that 80% of the great Bordeaux wines production has been exported these last years (including 50% in the US)!2
Château Margaux Case – MK103 Brand Management – Group 3
Under those circumstances, Château Margaux has to be very aware of the evolution of the market to keep on maintaining its status not to say to gain market shares.
II. The Analysis
In order to analyse Château Margaux in a comprehensive way, we have to study the case under two view points: the first one consists in analysing...