Case Questions: MontGras
1. (a) To what extent can MontGras control its own market position, as opposed to being dominated by the country-of-origin effect, and be perceived as a “Chilean Wine”?
MontGras, the export-focused winery that was founded in 1992, unlike many other Chilean wineries, actually possessed a considerable control on its own market position in the late 1990s and early 2000s. Although the overall consumer perception towards Chilean wine products indicated that they need to put more efforts to build a solid image globally and that their major advantage is the low price, the situation might not necessarily hurt MontGras’ current market position if and only if the management the link between the decision to adopt the quality strategy, rather than volume strategy, and the fact that Chilean wine lacked a proper image. By pursuing quality-oriented strategy, MontGras is able to further cultivate its brand awareness as a result of the success of the ultra-premiums(Ninquen line) and the super-premiums(Reserva line), and to eliminate the inefficient cost spent on the joint effort with Chilevid aimed at building a stronger image for the entire Chilean wine industry. Consequently, the problem of country-of-origin effect was, in fact, not significant enough that hampered MontGras’ marketing position as long as the company is fully understand what the appropriate marketing strategy is and adopt it with regard to different market ecologies of MontGras’ export destinations.
(b) What implications does this have for marketing strategy?
With the worldwide overproduction of vintages, competitions of wines in all segments were predicted more intense, especially in the basic segment, which traditionally accounted for nearly half of the market share of many countries, and 55% of MontGras’ total product in 2001. This indicates that already saturated basic segment, with the smallest gross profit margin for all the players within the segment,