Preserve the Luxury or

Extend The Brand?

Château de Vallois2 Types of

Grand Vin du Château de Vallois

• Premium Wine• Cost – €1000 • Production – 150,000

Bottles/ year

Puiné

• Second in Line• Cost – €100• Production – 200,000

Bottles/ year

• Rest of the grapes were sold to other estates

4Stake Holders

Major

Gasperd de Sauveterre50%

François de Sauveterre25%

Claire de Valhubert25%

Stake Holders

Gaspard de Sauveterre

• Owner of Château de Vallois (50%)• Steadily Profitable since 1980• Deciding whether to expand or not

(Grand Father)

François de Sauveterre(Son)

• CEO of Château de Vallois (25%)• In control of day-to-day operations• Traditionalist Perspective

Claire de Valhubert

• Stakeholder of Château de Vallois (25%)• Studied from France’s elite grandes écoles• Planned to join Family Business• Radical Perspective

(Grand Daughter)

Jean-Paul Oudineaux(Estate Manager)

• Agricultural Engineer• Has been working for Gaspard for 30 Years• Helped Gaspard in restoring the estates to its

former glory

Négociants

• Look after the Marketing and Distribution chain.

• Would buy even in the bad year.• Took nearly half of Profit.

(Specialist Merchant)

The Problem?

Younger wine enthusiasts were being priced out of High-End

French Wines

• Enter “Affordable Luxury” market • Introduce a branded Wine at a

price of 20 to 25 a bottle.• Keep the new wine seperate• Sell Directly to customers

Conflict

• Loss of Exclusivity of Brand• Might sever relationship with Négociants• Lack of experience in Marketing and Distribution Chain• Will effect the Traditional Culture

Preserve the Luxury or

Extend The Brand?

FEW... s

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5Options that should be considered

Stay True To WAY1

WAY2 Expand Internationally

WAY3

WAY4

MINIMAL

Of the Best

WAY5

Should we Preserve the

Luxury or Extend The

Brand?

Criteria for Evaluation

Criteria1

Equity

Criteria2

Profitability

Criteria3

Maintain Relationship with négociateurs

Criteria4 ‘Affordable Wine’ Market Share

These slides were created by Archit Raj, IIT Delhi, during a Marketing internship by Prof.

Sameer Mathur, IIM Lucknow (See www.IIMInternship.com )