FACULTY OF ECONOMICS MATEJA PIRNAT, 19554965
UNIVERSITY OF LJUBLJANA
SCHOOL YEAR 2014/2015
INDIVIDUAL ASSIGNMENT- Chateau Margaux Study Case
1. Describe the current distribution system of the company and explain why it is so important for its brand positioning? Please explain also how the brand is positioned on international markets. Chateau Margaux’s current distribution system is completely traditional, which means that it is handled by the specialized and independent merchants. The merchants are a major part of the distribution system for the Chateau Margaux’s wines. Besides the responsibility for the distribution of wine, the merchants also have other significant roles, for instance
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Chateau Margaux is consequently concentrating on the production the entire time, continue to produce the high-quality wines and keeping the luxury image. In the Bordeaux region, there are a lot of merchants, which helps to select the best one to sell the wine. They will probably never be part of the lower-price range market, be as active as the New World countries and become commercial wine, which I think is another good argument why they should stick with old distribution system. In Exhibit 3, where the estimates of prices through the value chain are shown, it is clearly visible that price difference between retailer and merchant is not that high to take a risk of the distribution on their own (the diffraction between the merchants’ and retailer price is fluctuated from 18% to 25%. Chateau Margaux has not had a major role in its distribution system in the past time, so without required skills and knowledge, the risk of taking over the distribution might be quite high. Chateau Margaux would not be able to get the price that the merchant is able to negotiate with retailers. We should also take into consideration that with developing a new distribution it is necessary to invest a big amount of money. 2. If you decided to import this product in your country, how would you do it?
Slovenia is known as a wine-producing country due to its fertile soil. It also follows global trends quite well and Slovene people are familiar with