Preserve the luxury or extend the brand

Preserve the Luxury

Or

ExtendThe BRAND ?

ABHINABA MONDAL,IIT KGP

Daniela Beyersdorfer andVincent Dessain

Chateau de Vallois


A famous high-end wine producing estate in the Bordeaux region of France


Francois de Sauveterre (CEO)

Jean Paul Oudineaux (Estate Manager)

Gaspard de Sauveterre ( Ex-CEO )

Claire de Val Hubert (grand daughter

of Gaspard )

Members of the Firm


Francois de Sauveterre ( 25 %)

Claire de Val Hubert ( 25 %)

Gaspard de Sauveterre ( 50% )

Share Holders


In 1855 de Vallois had been classified as a Premier Grand Cru Classe,

allowing it to charge top prices for wineABHINABA MONDAL,IIT KGP

The chateau now produced the greatest of Bordeaux's five grand crus classes


The chateau now produced the greatest of Bordeaux's five grand crus classes


150,000 bottles of Grand Vin du Chateau sold annually

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

Puine

The rest sold to other estates on the condition of

non-disclosureof origin


A level-2 distribution channel comprising negociants and distributors/importers

The average U.S. customer paid $999 for a bottle of Grand Vin, of which Chateau de Vallois collected between €100 and €450

Steadily profitable since the 1980s


Quality and Exclusivity contributed to the de Vallois brand equity


Claire’s proposal to enter the “affordable luxury” market could radically change the centuries old

enterprise


Claire observed that younger wine enthusiasts were getting priced out of high-end French wines





She wanted to introduce a branded wine at €20 to €25 a bottle, targeted at

young customersABHINABA MONDAL,IIT KGP

What should Chateau de Vallois do?


Que faire.. ??


Preserve the LuxuryOr Extend the Brand?


Factors favoring extension

An opportunity to capture and retain the

next generation of wine lovers

Increased revenue, profits by full utilization of the estate

Capitalization on the existing Chateau de Vallois brand


Factors favoring extension..(contd)

An opportunity to meet the demands of consumers who want to buy directly from the chateau

Added flexibility and a chance to stay ahead of drinking trends

Assured loyalty from younger consumers, when they are ready for expensive winesABHINABA MONDAL,IIT KGP

Factors against extension

Alienation of core customer base

Dilution of brand equity

Added expenditure on the marketing and distribution of a low profit line


Factors against extension..(contd)

Loss of goodwill of the negociants

The need to buy grapes from other estates due to shortage

Lack of expertise in marketing of a low priced wine


HOW to DO it BETTER………..


HOW to DO it BETTER………

Let`s see..


Gaspard de Sauveterre should venture into the branded wine market to attract young wine drinkers…


Independent management of the different produce WINES


Francois de Sauveterre should focus only on the first-growth…andClaire should hold the office forthe new branded wine


There is also a need for intelligent positioning of the branded wine such that Grand Vin’s brand equity is

not hampered


Thus, through proper marketing, Chateau de Vallois may generate revenue from the branded wine market, keeping the prestige of its

Grand Vin


How can we apply the insights from this article ??


How can we apply the insights from this article ??

Let`s find out from… ABHINABA MONDAL,IIT KGP

In the context of INDIAABHINABA MONDAL,IIT KGP


Dabur (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.


https://en.wikipedia.org/wiki/Ayurveda

https://en.wikipedia.org/wiki/West_Bengal



Dabur has always been at the forefront of innovation



Dabur Real Milk Shakes


“With the growing level of health awareness in India, there has been a spurt in demand for healthy functional foods.

With the launch of Réal Fruit Shakes, we aim to not only extend brand Réal to give our consumers more choices but also make the experience of having milk more enjoyable and nutritious for kids “




A few other successful brand extensions


Park Avenue Beer Shampoo has created a path-breaking category in the hair care segment by launching its first-ever shampoo for men in India


Gili, a brand of Gitanjali Group, recently extended into the apparel category and aims at

becoming a lifestyle brand ABHINABA MONDAL,IIT KGP

BUT all Brand Extention are not so successful….

Few of them lose their way in the market





TRULY…..


BUT……


What if AMUL now extends to

AMUL PIZZA ???



AMUL PIZZA ???


Or AMUL Sauce….



AMUL PIZZA ???


Or AMUL Chutney…..

Stop it NOW….


As people always find Amul associated with milk…

These extensions wont work


Can we relate these lessons to Marketing Theory ?


A brand is a name, term, sign, symbol, design or some combination of these elements intended to identify and differentiate one seller from another


Brand equity is the marketing effect uniquely attributable to a brand


Brand positioning

Competitive frame of reference

Points of Parity (PoP)

Points of Difference (PoD)


A Brand extension is the use of an established brand name to introduce a new product


Conclusion


A brand extension when done, should be a perfect fit with the parent brand and resonate with the consumer’s mindset




CREDITS

www.google.comwww.slideshare.netwww.yahoo.netwww.freeimages.comwww.EverythingisaRemix.comwww.colorlovers.comwww.fotolia.comwww.shutterstock.com


http://www.google.com/

http://www.slideshare.net/

http://www.yahoo.net/

http://www.freeimages.com/

http://www.everythingisaremix.com/

http://www.colorlovers.com/

http://www.fotolia.com/

http://www.shutterstock.com/


CREATED by ABHINABA MONDAL, IIT KharagpurDuring an INTERNSHIP under Prof. SAMEER MATHUR ,IIM LUCKNOWwww.IIMInternship.com
