Marketing Chateau Margaux

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  • Topic: Bordeaux wine, Wine, Cabernet Sauvignon
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9-507-033
REV: AUGUST 16, 2007

JOHN DEIGHTON VINCENT DESSAIN LEYLAND PITT DANIELA BEYERSDORFER ANDERS SJÖMAN

Marketing Château Margaux
Were a wine to be drunk in paradise, it would be Château Margaux. — William Styron, Sophie’s Choice Brad watched as wine poured from a precarious height into his glass, generating turbulence but no splash. “I must try that,” he thought. A young management consultant, Brad was no stranger to expensive meals, but here he felt separated from the proceedings by more than income. He was the junior member of a consulting team invited to join Corinne Mentzelopoulos and Paul Pontallier for lunch at Château Margaux, in the room where such luminaries as the president of China, Hu Jintao, had been hosted when he came to visit the source of one of the world’s great wines. The château’s white wine had accompanied Brad’s first course, next its Pavillon red, and now, with a selection of cheeses, came Château Margaux 1982, a wine that might have cost him $1,200 back in New York if he could have found a bottle. He raised it to his lips with trepidation. He rather hoped that what he was about to encounter would not be so transcendent that he would never again enjoy his neighborhood trattoria’s house red. His concern was unfounded. The sip was pleasant, smooth, and the finish was far longer than anything he had noticed before, but frankly, he thought, there was none of the explosion of flavors that he associated with the wines that his friends raved about, the blackberry and plum fruit bombs as they called them. Was this all there was, or could it be that his palate was not equal to the challenge? He turned to the general manager, Pontallier. “What should I be looking for? What do you taste? What notes can you detect?” Pontallier looked down at his glass. “It’s balanced,” he replied. The owner of the estate, Mentzelopoulos, had invited the consultants to lunch in January 2006, in the depths of winter, to explore questions that had never been far from her mind since 1980 when she had found herself in control of the estate at the age of 27 after her father’s death. Her primary goal, she said, was to protect the brand. She wanted each vintage to command a price at the very top of the five first-growth Bordeaux wines. But was she making the most out of Château Margaux’s potential? Maybe she should increase the product ________________________________________________________________________________________________________________ Professor John Deighton, Professor Leyland Pitt of Simon Fraser University, Executive Director of the HBS Europe Research Center Vincent Dessain, and Research Associates Daniela Beyersdorfer and Anders Sjöman prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2006, 2007 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

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Marketing Château Margaux

line. The estate already produced a second wine called Pavillon Rouge, but it was fairly highly priced, and there might be room for a lower-priced Margaux table wine. Could she take more control of distribution instead of leaving it in the hands of the Bordeaux merchants, or négociants, which was the time-honored tradition of the region? Was she sufficiently in touch with evolving tastes among wine connoisseurs? Whatever she did, Mentzelopoulos knew she had to maintain the standard of the estate. She said, “I marvel every day...
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