150,000 bottles of Grand Vin du Cheateau sold annually

The best of remaining grapes are used to sell 200,000 bottles of Puine

The rest sold to other estates

The average US customer paid $999 for a bottle of Grand Vin du Cheateau, of which de vollois collected between £ 100-£ 450.

Stake holders

1.Gaspard de Sauveterre

2.Clarie de Valhubert3.Francois de

Sauveterre4.Jean-Paul Oudineaux5.Negociants

Gaspard de Sauveterre: Owner of Chateau de Vallois

• Possesses 50% of the estate • Traditional perspective• Worried about business sustainability for future generations• Must make decisions

Clarie de Valhubert: Grand daughter of Gaspard

• Possesses 25% of the estate• Graduate of one of the France’s elite grandes ecoles with an MBA• Modern perspective: prosper of change

Francois de Sauveterre: CEO of Chateau de Vallois

• Possesses 25% of the estate • In control of day-to-day operation• Traditional perspective• Worried about reputation and loss of exclusivity of brand• Does not believe in investment of low quality low-priced wine

Jean-Paul Oudineaux: Estate manager

• Worked 30 years for the estate• An agricultural engineer• Does not want to make wines with other grapes• Believes production of two wines is enough

Negociants: Merchants and Dealers

• Wholesalers who buy the wine from de Vallois• Sell and Ship wine to distributors and imports• Reputation determine the price• Hold a good reputation with de Vallois• Traditional perspective

Clarie de Valhubert had observed that the de vollois wine was very expensive and young drinkers were unable to afford the wine.

Clarie de Valhubert’s proposals:

• Introducing a new “affordable wine” which costs between £20- £25• Targeting young drinkers to buy the wine regular• Investing in new marketing and distribution channels • Buy land overseas and capitalise the brand

Conflicts:

• Erosion of the brand• Disruption to routines is not liked• Family pressure• Financial losses • Profit reduction• Lack of experience in Marketing and distribution chain

Preserve the Luxury

OrExtend the

Brand?

Possible Options:

• Stay true to tradition• Expand internationally• Joint-venture or Partnership• Minimal Risk: Distribute a mid-range wine both domestically and

internationally.• The best of the best: The company should create a wine that is even

more exclusive than their already present wines, and sell directly from the Chateau. 

These insights can be applied to many Brands in the Indian markets.

Volkswagen

Volkswagen group is one of the biggest car making companies. It produced the second-largest number of motor vehicles of any company in the world. Volkswagen India Pvt. Ltd. operates a

manufacturing plant in Chakan, Maharashtra which is capable of producing 200,000 vehicles per annum.

Volkswagen Group company Bugatti Automobiles launched its super premium sports car 'Bugatti Veyron 16.4 Grand Sport' in India. Starting from Rs.16 crore, Bugatti Veyron is the most expensive car to hit the Indian roads.

The company launched Volkswagen Polo which is affordable car at Rs. 6 lakhs. The Volkswagen Polo won the 2010 World Car of the Year.

Titan seemed to be too elite for the mass markets and given the fact that a large population of watches in India are sold in the lower price range, the company has created Sonata at the

lower end of its product /price line

TRESemmé

TRESemmé is a brand of haircare products first manufactured by Godefroy Manufacturing Company in St. Louis, Missouri, United States, starting in 1947.

TRESemmé create different formulas to suit different types of hair. Products include Shampoos & Conditioners, Dry Shampoos, Mousse, Gels, Hairsprays,

Crème & Milk, and other styling sprays. It’s products are used by the professional saloons and the price range is quiet high. TRESemmé has

launched its products in India for a cheaper rates.

A decade back, Lux was a beauty soap brand at a higher level than other brands in terms of price and brand value. But as the other brands started growing, Lux’s

brand value had started falling down. Lux re-launched with ‘the international’ tag.

Dabur India Ltd. Is India's largest Ayurvedic medicine & related products manufacturer. Dabur was founded in 1884 by Dr. SK Burman, a physician in

West Bengal, to produce and dispense Ayurvedic medicines.

Line Extension Strategy was adopted by Dabur because:

• It could attract different target audience.• Could renew Interest and liking for the brand by introducing

new variants.• It could increase its market share.• Diversify without much risk.• Moved from its Core strategy and hence could give

customers something better and different.

Example: Real fruit juice

Nikon is the leading producer of Digital cameras from over many years. Its products include cameras, camera lenses, binoculars, microscopes, ophthalmic

lenses, measurement instruments, and the steppers. It sells high end Digital-SLRs. The company has introduced ‘Cool pix’ series which are Point-and-shoot

cameras, available at cheaper prices.

Brand Extension has been the pillar of success for many companies for over years.

Advantages of Brand extension:

• It increases brand image• Consumers can now seek for a variety• The new brand is affordable• The likelihood of gaining distribution and trial increases. An

established brand name increases consumer interest and willingness to try new product having the established brand name

• It increases market coverage as it brings new customers into brand franchise

Advantages of brand extensions-----------------------------------------------------------------------------------------------------------------------------------------------------------• Improved odds of new-product success• Positive feedback effects• Avoid costs of developing a new brand• Allow for packaging and labelling efficiencies• Permit consume variety seeking

disadvantages of brand extensions• Brand dilution• Can confuse or frustrate consumers• Can fail and hurt parent brand image• Loss of reliability

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