Post on 05-Jul-2015
É L É O N O R E M I C H E L
C H L O É M O R V A N T
P A U L I N E V A L L A N Z A S C A
P I E R R E - E M M A N U E L M O R I N E A U
P I E R R E U R I E R - C A T T O I R E
Strategic Marketing 1MiM1 Anglo C01
3/2/2013
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Table of contents
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Introduction
I. External diagnosis
II. Internal diagnosis
III. Objectives and strategy
IV. Marketing Mix
V. Budget
Conclusion
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Introduction
I. External diagnosis
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Strong points Weak points
Orientation of Europe toward alcohol consumption
Taxes are lowered inside Europe
Promotion of French culture worldwide (candidate for the UNESCO World Heritage)
Tax on alcohol except on French wine productions
Under-age drinking is prohibited (18 years Fr)
Political campaign against drinking and driving in France
POLITICAL
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Strong points Weak points
Agricultural incentives in Europe to go against “rising” emerging countries
Grants for one-time loss
Easy fluctuations of investments, money and goods within the European Union
Competition from New World wines (California, Australia, Argentina, Japan, Chile)
Black markets in somesouthern countries
Financials buy vineyards and do not pay attention to wine quality
ECONOMICAL
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Strong points Weak points
Glass recycling Legal age: between 18 and 21 years old according to the country
Advertising regulation : loiEvin (1991)
Export travel causespollution
Organic wines Competition but not direct
Legal - Ecology
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Strong points Weak points
Different drinking patterns according to countries
Europe : tradition drinking wine is in culture (heritage, and culinary habits, especially in France)
Faster and more precise machinery in France makes production easier and faster
Young people drink less and less wine
They are not trained to know wines
French people are the mostimportant consumer of French wines
New technologies can deteriorate a wine’s taste
Social - Technological
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II. Internal Environment
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Strengths Weaknesses
Secured and authentic wine
Product full of history
Renowned
1855: official classification as a “first vintage wine”
Luxury wine seen as an exclusive product
Expensive product depends on vintage year
Specific localization and distribution difficult to change
Pavillon Blanc does not take benefit from Margaux’sappellation
Accessible in limited quantity
Product
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Strengths Weaknesses
Loyalty to the brand
Established in Europe (United Kingdom, Germany, etc…)
French attractive product
Ambitions about new markets: Japan, China and Russia
Evolving taste of consumer
Principal customers: connoisseurs
People with high income
Consumers
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French competitors
Latour (350.000 bottles)
Lafite (250.000 bottles)
Haut Brion (153.000 bottles)
Mouton Rotschild (220.000 bottles)
Ausone (20.000 bottles)
Cheval Blanc (150.000 bottles)
Petrus (30.000 bottles)
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Current ranking of wine producers
Production Exportation Country % of the world’sproduction
1 1 Italy 18%
0 3 France 16%
3 2 Spain 13%
4 6 USA 8.6%
5 7 Argentina 5.2%
6 4 Australia 5.1%
7 10 China 5%
8 9 Germany 3.6%
9 8 South Africa 3.5%
10 5 Chili 3%
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New world producer
FROM 1995 up to 2000:
South Africa: +220%
Australia: +125%
Argentina: +73%
Chili: +160%
USA: +96%
SINCE 2000:
Production keep increasing (5 to 20% per year depending on the country) until the crisis
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The French market is changing
Problem :
How can Château Margaux develop it export activity while maintaining its high-end positioning ?
Current product New product
Current market Develop awareness in FranceAim curious people with highincome or connoisseur of otherwines (i.e. Burgundy wine)
Create a new product(entrée de gamme) in France and Europe
New market Use the same product to increase our market place and develop the company in Japon, China and Russia
Create a new product to attract young people and (non connoiseurs) all around the world
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III. Objectives and strategy
Objectives
Hypothesis (p.a.) Inflation: 0,1% Production: +0,01% Same quality as 05
This budget only reflects activity related (directly and indirectly) linked to production and selling of Château Margaux
N+2: Reorganise website
Invite international critics
N+3 - N+5: Annual Programm for our best customers (5/year): domain visit and 3 days in 5 star hotel/at the domain
N+1 - N+5: Tastings in well-known and high-end places worldwide
N+1 - N+5: Japan (closer to our market, aim gastronomy traditions and add "French Touch" - product quality): +0,05% p.a.
N+3 - N+5: Russia and China (aim new "Bling-Bling" market and work on brand image): +0,05% p.a.
N+1; N+3: Formation for negociants with whom we work worldwide
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Development objectives:
Japan
Russia and China
Access new clients: developp openess, product quality as well as brand image
Segmentation
Socio-demographic :
Men and women above 35 years old
Social & Economic :
People with a high level of revenues that allow them to spendmoney in quality product
Connoisseurs of wine products
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Targeting
The people we target are nowadays located in Japan, China and Russia.
In Japan, there is a strong gastronomy culture
In Russia and China it is more « Bling-Bling »
People are interested in expensive products at the expense of quality.
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Positionning
We want to keep the same positionning that Château Margaux has in France.
Quality product => High-end product (haut de gamme)
It is a product that customers buy for their pleasure.
To show-off
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IV. Marketing Mix
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Product
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Price
Vary according to the vintage of the bottles, but always have a high price. Production have been reduced so there are less bottles (scarcity of bottles) but higher prices.
A bottle cost approximately 15 euros to produce, but Château Margauxbenefits thanks to the perceived value approach.
Usually sold between 200 and 1000 euros/bottle (these last years). Besides, it is also sold en-primeur (prices vary a lot between 70 and 300) but it is only between 5 to 15 % of the production.
-> is high and climb a lot but it is justified by its high rank and prestige
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Place
Training for foreign negociants in order to allow them to sell ourproducts properly.
Tastings organised by negociants, with selected people, and productsfrom the terroir
Distribution remains the same: the estate, Château Margaux sell the production to brokers who take 2% margin and then deal withnegociants on the Bordeaux place who take 15 to 20% margin. Thenimporters export the products all over the world.
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Promotion
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V. Budget and follow-up
BudgetN0-N+2
Development of Japanese activity
Frist training sessions
Beginning of tastings in renown places aroundthe world
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3/2/2013
Actual
YEAR 0
(2005) Margin Margin
Objectives
Production 150 000 150 150 1,00% 150 300 1,00%
Sales 140 700 000 € 155 074 920 € 0,91% 169 177 849 € 0,92%
COGS/unit 300 € 300 € 1,00% 299 € 1,00%
COGS Total 45 000 938 € 45 000 988 € 1,00% 45 001 036 € 1,00%
Income Statement
Revenues 140 700 000 € 155 074 920 € 0,91% 169 177 849 € 0,92%
COGS 45 000 938 € 45 000 988 € 1,00% 45 001 036 € 1,00%
Gross Profit 95 699 062 € 110 073 932 € 0,87% 124 176 813 € 0,89%
Marketing & Sales 86 667 € 161 667 € 0,54% 86 667 € 1,87%
CRM & Public Relations 16 667 € 91 667 € 0,18% 16 667 € 5,50%
Tastings 50 000 € 50 000 € 1,00% 50 000 € 1,00%
Other 20 000 € 20 000 € 1,00% 20 000 € 1,00%
Reasearch & Development 25 000 € 25 000 € 1,00% 37 000 € 0,68%
Website 12 000 €
General & Administration 125 333 € 130 333 € 0,96% 125 333 € 1,04%
France 125 333 € 125 333 € 1,00% 125 333 € 1,00%
Other regions 5 000 €
Operating Income 95 462 062 € 109 756 932 € 0,87% 123 927 813 € 0,89%
Financial Income 20 000 € 20 000 € 1,00% 20 000 € 1,00%
EBIT 95 482 062 € 109 776 932 € 0,87% 123 947 813 € 0,89%
Interest Expense 750 € 750 € 1,00% 750 € 1,00%
Taxes 31 824 171 € 36 588 652 € 0,87% 41 311 806 € 0,89%
Net Income 63 657 141 € 73 187 531 € 0,87% 82 635 257 € 0,89%
Château Margaux YEAR 1 YEAR 2
Forecasts
Budget N+3-N+5
Reorganise website
Start of Russian and Chinese activities withrepositionning of brand image (more « Bling-Bling »)
New trainings
Start of the « Best customersprogramme »
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Margin Margin Margin
Objectives
Production 150 450 1,00% 150 601 1,00% 150 752 1,00%
Sales 183 459 279 € 0,92% 197 769 103 € 0,93% 212 107 363 € 0,93%
COGS/unit 299 € 1,00% 299 € 1,00% 299 € 1,00%
COGS Total 45 001 084 € 1,00% 45 001 133 € 1,00% 45 001 182 € 1,00%
Income Statement
Revenues 183 459 279 € 0,92% 197 769 103 € 0,93% 212 107 363 € 0,93%
COGS 45 001 084 € 1,00% 45 001 133 € 1,00% 45 001 182 € 1,00%
Gross Profit 138 458 195 € 0,90% 152 767 969 € 0,91% 167 106 181 € 0,91%
Marketing & Sales 296 667 € 0,29% 221 667 € 1,34% 221 667 € 1,00%
CRM & Public Relations 216 667 € 0,08% 141 667 € 1,53% 141 667 € 1,00%
Tastings 50 000 € 1,00% 50 000 € 1,00% 50 000 € 1,00%
Other 30 000 € 0,67% 30 000 € 1,00% 30 000 € 1,00%
Reasearch & Development 25 000 € 1,48% 25 000 € 1,00% 25 000 € 1,00%
Website
General & Administration 140 333 € 0,89% 125 333 € 1,12% 125 333 € 1,00%
France 125 333 € 1,00% 125 333 € 1,00% 125 333 € 1,00%
Other regions 15 000 €
Operating Income 137 996 195 € 0,90% 152 395 969 € 0,91% 166 734 181 € 0,91%
Financial Income 20 000 € 1,00% 20 000 € 1,00% 20 000 € 1,00%
EBIT 138 016 195 € 0,90% 152 415 969 € 0,91% 166 754 181 € 0,91%
Interest Expense 750 € 1,00% 750 € 1,00% 750 € 1,00%
Taxes 46 000 798 € 0,90% 50 800 243 € 0,91% 55 579 168 € 0,91%
Net Income 92 014 647 € 0,90% 101 614 977 € 0,91% 111 174 262 € 0,91%
Château Margaux YEAR 3 YEAR 4 YEAR 5
Forecasts
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Conclusion