Chateau Margaux

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1. What factors influence perception of wine value?

Due to the nature of wine products, the influence of origin is more important here than in most other product categories According to the text, Bordeaux was the largest winemaking region in France with centuries of traditions, which is key to its reputation. Price can be seen as a product cue to purchasers of wine. Indeed, it can be used by consumers as an indicator for quality and therefore brand. The scarcity of top Bordeaux château on the market keeps the demand and prices high while wine is still in the barrel. The market sees Bordeaux as a luxury product. Consumers frequently make decisions based on the information from both the retail environment and their own product knowledge. More complex factors such as climate, soil, grape variety, the occasion at which the wine will be consumed, etc. play role in the perception of wine value too. The role of packaging and indeed other types of marketing and advertising are also significant. An increase in the perceived price of a wine leads to increase in taste expectation.

2. Should the Chateau management team take more control of marketing, sales and distribution?

According to the text the Chateau doesn’t do any marketing. It is left to the distribution channel and merchants to promote. This is also a reason not to know who their customers are, according to Mentzelopoulos, and also not understand their market opportunities. Every successful company is customer oriented. They can expand geographically or target new segments. There are a lot of potential customers in Asia for luxury wine. There is also a competition from New World producers, who use marketing campaigns and sell mass-market wines. That could be a threat to the Chateau. I think that they can benefit from reminder advertising and more control of marketing in this fast paced world.

3. Should a new lower-priced wine be added to the portfolio?

Although the Chateau is selling around 10%...
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