Marketing Plan for Chanteau Margaux. Class Project ESCP Europe.

2. MARKET ANALYSIS
“Emotion, power and elegance”
The Chateau Margaux wines are regarded as prestige
brands with strong brand equity. Heritage of the past is
an unique asset that allows differentiation.
The brand is well established in France and it is making
inroads into other countries such as Australia, Spain,
Chile, Italy and the USA.

3. INTERNAL
ANALYSIS

4. MARKET ANALYSIS
Competitive Advantage
Main Focus on innovating and focusing on the process and
the quality of the product. Historical heritage.
Values
Quality, Exclusivity, Elegance, Excellence, Responsibility and
Compromise.
Value Proposition
Offer the consumer an experience when enjoying an elegant
and balanced wine with an excellent combination of terroir,
selected grapes, climate and human quality.

5. Château Margaux Consumer profile
Connoisseurs (60%)
Knowledgeable about the taste, regions and vintages.
Most important factor is its taste.
Seek variety of choice
Insensitive to price as search for best taste
Luxury consumers (40%)
Rapidly Growing (esp. China and Russia)
How the brands address their unique lifestyles.
Most important criteria = quality and uniqueness.
Seek the most prestigious places (five-star hotels).
Price communicates the quality of the wine
Connoisseurs and luxury consumers look for different things while making their buying decisions.
Strong Targeting potential: ‘Overwhelmed’ and ‘Traditionalists’

6. ● Since 1771
● Premier Grand Cru Classé: outstanding quality
● Parker Score mostly above 90 → prestigious wine
● Classic and prestigious packaging
● Constantly uses innovative and sophisticated methods to increase
quality and optimize production
● Production volume:
○ Grand Vin du Chateau Margaux: 130,000 bottles
○ Pavillon Rouge: 100,000 bottles
○ Pavillon Blanc: 10,000 bottles
● Product quality and quantity greatly affected by external factors
(weather, soil…)
Current Marketing Mix: Product

7. ● Highly fragmented distribution chain
● On-premise: Found in Bordeaux merchants or
bottle shops
● Off-premise: bars and restaurants
● Since the 1800s negociants took over
commercial and marketing aspects
Current Marketing Mix: Place
Global Importers
and importers
Negociants
Smaller retailers in
local markets
Chateau Margaux

8. ● First wine average price: $1000 a bottle
● Second wine average price: between $200-450 a bottle.
● Factors influencing wine price:
Current Marketing Mix: Price
5
on-prem
ise
vs
off-prem
ise
4
Brand
Positioning
and
im
age
3
Volum
e
and
sense
ofexclusivity
Quality
(vintage
dependent)&
perceived
quality
(critics)
21
W
ine
age:the
olderthe
m
ore
expensive

9. ● Only merchants are customer facing → develop strong relationships
● Promote Chateau Margaux to a wide range of actors
● Tools used: ‘em primeur week”, wine fairs, brand ambassadors, exhibitions,
educational content
Current Marketing Mix: Promotion
Critics, Influencers,
Journalists
Influence perceived quality
and price. Makes sure wine is
talked about. Receive
feedback
3
Actors of the
distribution chain
negociants, Merchants
4
End Consumers
Communicate the quality,
heritage and exclusivity
1
Sommeliers
Crucial relationship for on-
trade presence 2

10. EXTERNAL
ANALYSIS

11. Market Growth
Global Wine
Market
+ 37%296.03 US Billion
(2016)
404.64 US Billion
(2025)
Luxury Wine
Market
+ 37%818,108 US Million
(2016)
1,122, 578 US million
(2022)

12. Global Trends
Women alcohol
consumers
Expansion of
bars and
restaurants
Preference for
low calorie
alcohol drinks
Health benefits Shifting to wine

13. Major Players in the luxury wine industry:
Competitors
● France is losing wine market share to“new world”
countries, such as Australia,Argentina, South Africa and
New Zealand
● Connoisseurs could shift their tastes to “new world
wines”
● Watching some competitors expanding
● Chateau Margaux has no structure besides production.
No Sales, no Marketing.

14. Influencers’ role in wine perception
100 - Point Parker
Score
Social Media
INFLUENCERS
Wine journalists
THEIR IMPACT
ON WINE
Perceived Quality Retail Price Brand Image

15. PESTLE Analysis
Political:
● Subsidisation to help clear excess capacity
● Restriction on the planting of vines
● Alcohol prohibited in some countries in the
middle east
● Political instabilities (e.g. death of Thai king)
bring mourning period where alcohol
consumption is prohibited
Economic:
● Economic crisis reduced consumption on luxury
products
● Lower prices of wine in spite of higher
consumption
Environmental:
● Growing trend of organic wine
● Growing customers’ concerns on fair trade and
local production
Technological:
● New ways of selling wine online
● New technology for harvest and wine
production
● Reaching customers differently
Legal:
● Drinking age for consuming alcohol
● Restrictions on advertising opportunities
Social:
● Age limit for wine consumption
● Local traditions - wine is cultural
● Social status brought by wine in third world
countries
● Customers look for experiences around brands

16. Porter’s 5 Forces

17. SWOT ANALYSIS

18. OPPORTUNITIES
● Growing worldwide demand
● Luxury wine market attracts an
increasing number of consumers in
the middle class (sign of social
status)
● New distribution channels with
online platforms
● Cutting edge over foreign wine
makers
THREATS
● French wine is losing market share
worldwide, high competition rate from
other countries
● Chinese investors are buying french
wine castles
● New customers are more novice than
before (need to educate them)
● The launching of a 3rd cheaper product
presents a risk of losing brand notoriety
STRENGTHS
● Prestigious and well established brand
● Internal know-how
● Strong brand values & equity
● Recognised quality: a “grand cru classe”
● Bordeaux’ soil quality
● Loyal customer base
● Excellence award for finery
WEAKNESSES
● Primary resources dependent:
weather is a risk and can have
repercussion on product quality
● Marketing is carried out by external
wine merchants: no B2C data
● No capacity to increase production
● Snob appeal / overpriced perception
by previous french customers
● Low on production Capacity
● Less overseas Supply

19. OBJECTIVES

20. SMART Objectives of launching a third wine
1. Sales: Achieve 2 millions euros of sales the 3rd year
1. Profitability: Achieve 45% of net profit by year 3
1. Brand: Increase brand awareness from 10pt for the luxury consumer.

21. STRATEGIES

22. Strategies Why launching a third wine?

23. Strategies Evaluation of market’s potential

24. Strategies Target market strategy

25. Strategies Target market strategy
This strategy aims to reduce a maximum the cannibalism risk, it targets segments with different needs.
As opposed to the first and second wine that aim to be the most qualitative wines in the world no matter
their price, the 3rd wine aims to propose the best value for money.
We even expect that the 3rd wine will actually help selling the two others through upselling strategies.
Chateau Margaux will be back again in the mind of connoisseurs, which paves the way for up-sells.
Same thing for the younger wine enthusiasts who will be introduced to all the prestige of Chateau
Margaux and might switch to the first and second wines when their purchasing power increases.
1
2
3
4

27. PLAN:
The Marketing Mix

28. PRODUCT

29. 2 levels of the product

30. 2 levels of the product

31. PRICE

32. Price
Attract new
customers
Maintain
luxurious
brand
image
Avoid
cannibalisa
tion
Run
business
separately
€120 per bottle
€160 per liters
Competitors’ Rates
Production Cost
Bulk Prices

33. PLACE

34. BYPASSING NEGOCIANTS TO IMPROVE PROFITABILITYOff-premise
Specializedmerchants
eCommerce

35. PROMOTION

36. Consumers
Merchants
Sommelier
HOW TO TARGET OUR DIFFERENT SEGMENTS?
Budget: 1,7 million € (30% of expected sales of 1st year)

37. CONTROL

38. Volumes of bottles sold
Number of off-premise having our 3rd wine on their menu
Brand awareness: spontaneous/assisted notoriety
Age repartition of our final customers
Repartition of consumption per country
Volume sold on the eCommerce channel.
(additional KPI): Shift in the volume of 1st and 2nd wine sold
WHAT KPIs SHOULD BE CONSTANTLY FOLLOWED ?

39. PROFIT AND LOSS

40. PRICE
=120€ a bottle

41. PROFIT & LOSS

42. CONCLUSION

43. TAKE AWAY of the launch strategy
Product
● L’Elegante Margaux
● Modern, excellence, tradition
● Targeted at traditional connoisseurs
and wine enthusiasts
Place
● Off-premise
● Specialised merchants
● E-commerce
Price
● 120€ retail price (148€ in the US)
Promotion:
● Consumers
● Merchants
● Sommeliers