Chateau de Vallois Company Brand Marketing

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How does Bordeaux wine distribution system work? Who benefits and how?

Bordeaux wine is a high-end wine, distributed through distributors called the négociants (Beyersdorfa and Dessain 175). They purchase all the wine that the estate produces one year after the wines are bottled and pay in advance. However, it is they who distribute the wine and maintain its exclusivity. The négociants buy the wines and sell it to the distributors and the importers worldwide. Therefore, if a visitor to the estate wanted to purchase a bottle of the wine, they could not buy it as all the wines were sold out to the négociants.

Figure 1: Bordeaux Wine Distribution.

This is a traditional form of distribution followed by generations of fine and exclusive winemakers of the Bordeaux region. The négociants pay a price of €100 to €450 for a bottle and they purchase all of the production (Beyersdorfa and Dessain 176). Therefore, the producers or the estate owners do not have to worry about:

distribution and marketing of the wines,
unsold inventories,
the rise and fall in the demand of the wine.

Further, as the négociants pay in advance, the estate owners do not face a cash crunch as they can capture a part of the sales revenue for future investment in next year’s production. Further, as the estate owners do not have to bother about the production and distribution of the wines, they can concentrate on the wine production which is a tedious and painstaking process requiring extensive attention to details.

The négociants also find this arrangement advantageous as they can collect the margins from the sales, which are rather high. Therefore, the two beneficiaries from this traditional distribution channel are the estate owners and the négociants.

What problems does the owner of Chateau de Vallois have? What should Gaspard do?

The brand Chateau de Vallois is a respected and prosperous brand in the luxury-wine market segment where they are esteemed for their fine quality and rarity. However, the dilemma that the owners, especially Gaspard, faces is if the brand should move to mass marketing of branded wine at lower cost to the younger generation of wine drinkers, what strategy should the estate undertake.

As the de Vallois brand is known for its exclusivity and rare wine making, their entrance into the mass market wine distribution would create two problems:

deplete their existing brand image and trust for the brand
create problems for production of grapes, marketing and distribution of the new branded wine.

However, the branded wine will open new opportunities for the estate as it will directly deal with the wine market and capture the changing taste preferences and new consumers of their products that they presently forego.

What should Gasper do? The first solution would be to let go of the vision of a new strategy and stick to the traditional comfortable zone and continue their business in the same fashion as they had for years. This is an easier and confortable option. However, if Gasper intends to expand the estate’s revenue and tap the full potential of the brand they have developed over the years, he will have to opt for the second option.

The second option is to create a distinct business model for the estate with two separate branches operated under different leadership. One by his son Francoise who would look into the fine, luxury wine and their traditional business following their older business model and the second by Claire, who would look into the production, distribution, and marketing of the new branded wine for mass market.

The two branches will have to follow separate business models and from different places and develop a distinct new brand for the mass-market wine distinctly different from the traditional wine so as not to deplete its brand value.

Does Chateau de Vallois have other growth options beyond lower priced wine? Describe possible growth strategies

Chateau de Vallois may opt for, if they forego the idea of making low priced wine, three other possible growth options:

1. Making and selling mid-priced range wine both in the domestic and international market. The estate can continue their production of fine grapes for their first pick wines. As the estate already sells off the grapes that do not qualify as the higher grade fruits for making their exclusive wine to other vineyard, they can use the low grade grapes to make and market a mid-range wine but not mark them as their exclusive first pick wine.

Further, they can follow the same distribution channel as they had earlier, avoiding heavy investment in building a new brand name. They can sell their mid-range wine through their négociants and earn a new status of selling affordable wine. The estate may begin this experiment only by selling their product domestically in France and then begin export of the their mid-range product.

2. The brand may strive to become even more exclusive and start selling the product directly to the customers from only the chateau. This would increase the profit margin of the owners as they will keep the margin of the négociants and can even price their products higher. However, this is a very niche marketing strategy.

3. Another strategy would be to stick to the traditional means of production and distribution but produce more and expand geographically. As the opportunities for high-end wine is increasing in the emerging markets of China and India, it is advisable to expand their export to these regions.

What can the firm do to enhance the marketing of brands? What role does a writer like Robert Parker play? How can innovative marketing approaches facilitate future sales growth?

Chateau de Vallois may expand their marketing options and device certain promotional activities that would enhance their brand awareness. Being an exclusive wine brand, mass marketing is not possible. However, review of their wine in high-end lifestyle magazines or television channels where the production and the vineyard are reviewed gaining publicity as a high-end brand.

Further, when the wine critiques review the wines their words hold great importance of worldwide wine connoisseurs. In order to expand geographically to the new emerging markets, de Vallois must find new and values critics in the emerging markets like China and India and create awareness of their brand.

Writers like Robert Parker are wine critics who review wines in high-end magazines that create brand value and perception among the new wine connoisseurs.

Innovative marketing strategies will help the company enter into areas of the market that they had earlier missed or overlooked. Entering into these untapped markets will increase brand presence, product revenue, and profits for the company.

The most innovative strategy would be utilise the lower grade grapes from the vineyard to make a mid-range wine under the de Vallais brand and sell it through upmarket distributors in order to enter the market for affordable wine brands. The other strategy may be to encourage the selling of the wine directly from the chateau and making it a venue for wine related travel and tourism (Brown, Havitz and Getz 37).

Works Cited

Beyersdorfa, Daniela and Vincent Dessain. “Preserve the Luxury or Extend the Brand?” Harvard Busienss Review 89.1 (2011): 173-177. Web.

Brown, Graham P., Mark E. Havitz and Donald Getz. “Relationship between wine involvement and wine-related travel.” Journal of Travel & Tourism Marketing 21.1 (2007): 31-46. Print.

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