Marketing Chateau Margaux Case Solution

1. Should Chateau Margaux extend the product line? Why or why not?

Chateau Margaux should not extend its product line because this will dilute the brand. Chateau Margaux is a connoisseur wine brand, which is listed in one of the finest beaurax wine brands produced in France. Chateau Margaux is known for its quality, exquisite blends, luxury and exclusivity. The high price for Chateau Margaux aids its luxurious image. If Chateau Margaux goes for a line extension for their brand, this might have a severe effect on the brand’s image. Thus, Chateau Margaux should focus on the brand’s current luxurious image rather than going for an extension. 

According to Fischer (2015), it is more common for connoisseur luxury firms’ heirs to lose interest in the business and sell it. Thus, it is highly advisable that Chateau Margaux, being a connoisseur brand, should stay true to its traditions. As Beyersdorfer & Dessain (2011, p.1) have put it that changing the traditional ways of doing things might seriously affect the brand’s perception in the industry as well as among the customers.

However, by not extending the product line, Chateau Margaux might loose on young customers. Chateau Margaux is currently overlooking a large customer segment of young customers who cannot afford such an expensive, luxurious brand of wine. Chateau Margaux can serve these customers by introducing an affordable luxury i.e. a less expensive wine brand from its estate. And slowly and gradually these customers can be upgraded to the Chateau Margaux brand in the long run.

2. Should Chateau Margaux change its current distribution system? Why or why not? 

Chateau Margaux’s current distribution system is working fine, which ensures the worldwide distribution of Chateau Margaux all over the world though in small amounts. The limited worldwide distribution of Chateau Margaux enhances the luxurious aspect of the brand. Chateau Margaux enjoys a lose-tie and strong relation with its distributors who are also familiar with the marketing of the wine besides its distribution. Moreover, Chateau Margaux should not deviate from the age-old traditions because this might jeopardize the brand’s image in both inside the industry and among the customers.