Preserve the Luxury or Extend the Brand Case Analysis Essay

720 Words Nov 25th, 2012 3 Pages
Case Study: Preserve the Luxury or Extend the Brand?

The case study Preserve the Luxury or Extend the Brand presents a fictional dilemma, based on a real company, faced by Chateau de Vallois, a prestigious and famous wine-producing estate in the Bordeaux region of France. De Vallois is a family owned and run business; part owners are Gaspard de Sauveterre - a 75-year old majority owner, and equal partial owners: Francois de Sauveterre – Gaspard’s son and the chateau’s CEO , and Claire de Valhubert – Garspard’s granddaughter. De Vallois had fallen into a slow decline under its previous owner, but Gaspard along with Jean-Paul Oudineaux, his estate manager, had restored the chateau and since then de Vallois had been steadily profitable
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The problem that this proposal introduces, according to her uncle Francois, is that it would add too many unnecessary and uncontrollable risks to the chateau. Such risks include: the need to purchase grapes to make the wine, raising concerns and possibly harming relationships with the negociants, investing in a distribution channel, having to take care of the marketing, insurance, and all other aspects that the negociants already perform for them, and most importantly, it may compromise their Grand Vin and Puine wines as consumers’ and vendors’ perceptions may negatively change toward the quality and reputation of de Vallois. Going through some of the details within the case, I feel that the company would benefit from following Claire’s general proposal, to create a lower-priced brand and enter a new market. My recommendation is that Chateau de Vallois at least invest time and effort in researching the market and truly investigating the opportunity for growth. This benefit would be present so long as de Vallois conducts a thorough market research before entering the “affordable luxury” market to gain an understanding of the consumers’ needs and wants, the demand that is present in the market for those young wine enthusiasts, and to be able to match de Vallois’ strengths with these needs. They would also need to identify where they would want the new label to be positioned,

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