MARKETING CHTEAU

MARGAUX
1.The Company:
The Mentzelopoulos Family:
Chateau Margaux has been run by the Mentzelopoulos family since 1977. In this time, you along
with the General Manager Mr. Pontallier have restored the chateau to the reputation it enjoyed in
the past. Your first growth wine Chateau Margaux is considered to be among the best in the
world. The vision of the Mentzelopoulos family has always been to maintain the reputation of
the brand Chateau Margaux.

The Product history and brand

Chateau Margaux is one of the only five chateaux that were classified as first growth in the
Bordeaux Wine Official Classification of 1855 carried out chiefly on basis of terroirs. Ever
since then, Chateau Margaux has enjoyed the status of one of the most premium and expensive
wines in the world. Connoisseurs of high quality wine subscribe quality, essence, flavour, life
and grace to it. Reputation and consistency are also considered paramount.

2.Present Status of the Company

Current Production
Innately superior terroir combined with appropriate selection of grapes, measured proportion of
blending of specific types of grapes and skilled labour input ensure that quality is not
compromised at any cost. Additional improvements effected since the take-over by the
Mentzelopoulos family like the drainage system have added to productivity.

Growth Potential
In spite of the improvements carried out in the recent past there still exists a large unutilised
potential. Firstly, the production of wine has halved in the last 20 years. So, the capacity to
produce more definitely exists. Secondly, there is an excess harvest of grapes. Last year 10% of
the grapes which had qualified for production of Chateau Margaux were sold to other producers.
Thirdly, more suitable land can be brought under cultivated area in order to further boost output.
This latent potential can be utilised in two different ways. One is to introduce a lower price wine
and further buy grapes for the same from outside sources. The other is to use the extra produce to
increase the production of Chateau Margaux or Pavillon Rouge.

 Building the Brand

The estate comprising of the vineyards, the castle, meadows and the neighbouring forests by
itself is a brand with immense potential that needs to be harnessed. The estate can be developed
as a wine-museum cum tourist destination. It will be an attraction for wine enthusiasts and
connoisseurs. Guided tours will not only help generate additional revenue for the chateau but
work to develop Chateau Margaux as a strong brand with global recognition.

3.Current Distribution Process

Role of the Merchants
The current system works through a futures sale of the wine to select merchants through bidding
after members of international trade and journalists have inspected the produce. Then a portion
of the produce is sold to merchants who then redistribute it through their chain of importers and
wholesalers. This is called the first tranche. A second and even third tranche may be sold if
response of the market is positive. Only 5-15% of the wine is sold after bottling. The final
market prices may vary by as much as 200% between the first tranche and the bottled product
that finally reaches the market two years later.