Posted by: itm2011 | May 18, 2011

Old World Values Poured into the 21st Centruy

Chateau de Vallois:

 

“Old World Values

Poured into the 21st Centruy”

 

 

The wine industry is comprised of both old and new traditions. While the smell and tastes of an aged wine, made from the highest quality grapes are adored by some wine coinsures, others prefer newer, sweeter tastes. These preferences have shaped the 20th century wine consumers internationally. Both aged wines, and their high price point, and newer, yet lesser-priced wines, have felt the effect of globalization and sourcing of the product.  Countries such as china and India are producing lesser-priced wine to fulfill the demand of lesser, yet still high quality wines. This market is a younger consumer, who is looking for a much different product than those purchasing wines for decades.  A prestigious wine company, Chateau de Vallois demonstrates the dilemma of whether or not a company should remain only serving its high-class cliental, or also lesser luxury products. Going through some of the details within the case, I feel that the company would benefit creating a lower priced label, so long as it meticulously researches the market before entering. Furthermore Chateau de Vallois needs to clearly define the difference in products.

Claire de Valhubert has not been directly involved with her family business for several years. It is her brother-in-law and uncle has been in charge of running their family business. Claire however, still has a large share in the family business, and having completed her MBA, she is returning to the business in hopes of serving the un-ventured young wine consumer. She claims this market is being taped into by competitors and does not see how the business will last unless they also enter the specific market.

Conversely, Uncle Francois de Sauveterre and Jean-Paul Oudineaux do not agree with Claire. They argue that neither of them is familiar in working with lesser quality raw materials which are used to create a sweeter, and less expensive form of wine. Also, they claimed that neither have the time or monetary resources to create the necessary distribution channel.

Never the less both parties offer valuable business and product knowledge that could offer a great future profit; should the market entry be executed correctly.

Should the market be entered with proper research and planning, Chateau de Vallois could be the largest leading wine supplier internationally.

 

Market Research

Proven in various studies, the demand for more affordable wines relates to the increase in wine drinkers in the current generation X. From 2005, with forty-one percent of wine drinkers generation x has risen to sixty-two percent in 2010. This in-comparison to those from the baby boomer generation, which rose from forty-one to fifty-seven percent in 2010. While the numerical differences in the generations are not extremely large, the difference seems to relay a trend that is only going to increase in the future.  In order to accurately serve this younger market, a comprehensive survey of taste preferences and actual price points should be immediately put into place.  This could be done through offering the product at local bars, which young people could sample. Also, the web research related to other popular types of alcohol being purchased by this demographic should be looked at in detail.

Since Claire is the greatest supporter of entering this market, she should lead the research projects. She is also familiar with other wine suppliers currently targeting the younger market. Francois and Jean-Paul need to focus on their higher customers who regularly purchase, as well as research the ways to produce a lesser quality wine, without losing any tastes. Maintaining both of these duties may be overwhelming; therefore, hiring a knowledgeable sales team to remain close relations with luxury consumers is vital.

http://www.winemarketcouncil.com/research_summary


 

Comparatives and Contrasts

 

            Italian bedding company Frette has evolved itself from an extremely high priced bed line, to various other faces of bedding, which more consumers can afford. Welcoming younger consumers, with less expensive prices and more contemporary styles, Frette has expanded itself into many other markets. While keeping its high priced, highest quality brand separated from the lower brand, Frette has incorporated these lines into its stores as well as several hotels.

Similarly, should Château de Vallois follow a similar path the outcome should be just as successful as Frette. Through keeping two lines, one, which is for older traditional wine drinkers (classic label), and one for a younger, contemporary consumer (Contemporary label), the brand can keep its prestigious name. Furthermore, putting only top shelf labels from the brand into high priced restaurants can also continue to keep the luxury side of the brand. While there will be a lesser quality wine, marketing the top shelf wine as made with better products and old traditions will clearly define the difference in the two lines.

Also being featured in Wine magazines or other online media can assure consumers of its highest top shelf labels not being made as the lesser labels. Videos such as the one that follows will clearly define the difference. http://www.youtube.com/watch?v=1RtakVXH-hA

 

Action Plan

In order to be successful, market research is key in finding out who and what clients want.  Claire, who will be head of marketing and business development, needs to evaluate other luxury brand companies who are making lower quality merchandise.

Although it is a fashion company, Dolce and Gabanna have done a great job in expanding their company from being runway looks to ready to wear. Their sunglasses specifically have two lines, Dolce and Gabanna and D&G. The price points of Dolce and Gabanna average $350.00 while D&G averages at $160.00. These lines are comparable in price but not quality. The difference is that the higher priced items are more trend, runway driven. They encompass the legacy and tone of the Dolce and Gabanna brand identity. The lower end brand is produced with cheaper products however; quality and fashion trends are not compromised.

Following this type of model, Chateau de Vallois should be able to use flavorful grapes at a lower cost. Jean-Pierre was afraid that he did not know how to produce such a wine; yet, he is familiar with several producers who are able and have been producing such wine products. Therefore, after setting up the market research team, a product development team needs to be hired by Jean-Pierre. This way he may over sea the production, yet would not be responsible for producing and executing productions costs. These teams should be hired and set up within 3-6 months of the product start date.

After the teams are hired, the research should be completed within 3 months, and continue to be updated every month. The production team should also have ideas of sourcing locations and costs within 3 months. At the 3-month point, both the marketing team should attend an overall meeting to inform each other of the market/product demands, and the options of sourcing the products. After the meeting within the 6 months, there will be a trial of products on the market. Within the 6 months, monthly meetings will be held to monitor the sale trend.

Visual Marketing Schemes

The looks of Marketing Copyright will be different for each line. The more traditional line will embrace a classic nostalgia while the contemporary line should play on bright, modern colors and art. Using Images of Vineyards and French countryside from past decades will decipher itself from the contemporary, lesser wine.  B

 

Conclusion

Bringing a company, enriched with heritage and nostalgia into a new and vastly different time era can be quite the challenge. However, when there is a mix of executives who can learn to appreciate the past and embrace the future, success can be the only outcome. Balance is most definitely key in transforming an older brand into a new phased industrial giant. Yet, with the right motives and direction, with well-researched leaders, this treacherous task can be completed with great ease and success.

References:

http://www.winemarketcouncil.com/research_summary.asp

http://www.frette.com

http://www.depts.ttu.edu/hs/TexasWine/

http://www.marketresearch.com/browse.asp?categoryid=477

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