Veuve Clicquot Ponsardin - When the 'Grande Dame' Enters the Chinese Market

Résumé du document

In France, the famous luxury group LVMH (Louis Vuitton Moet&Hennessy) understood this problem early on in the process. In fact, since the early 90's, the group had begun its internationalization process since the early 90's: it is now a real pioneer in China thanks to its ability to identify the purchase behavior of the local customers. LVMH owns over 60 brands; from the fashion and luxury industry to the wine and spirits sectors, the company offer diversified range of products.

In the past few years, Bernard Arnault, LVMH CEO, has been trying to develop its wine and spirits sector in the Chinese market. Thanks to its amazing international recognition and the rise in Chinese demand for Western products, LVMH has found itself a new opportunity.

The champagne industry is proving to be very profitable. In 2008, over 320 million bottles had been sold, representing more than €4 billion in worldwide sales . However, ten main groups have been controlling 84% of the market for many years. It is in this competitive market that Veuve Clicquot Ponsardin, the famous LVMH brand, is trying to develop its offer on the international market, as an important player in this industry.

Considering these facts and this major opportunity, we are planning to export Veuve Clicquot Champagne to China, because we think that its international recognition and its prestigious brand image are key values in entering a new market.

How can Veuve Clicquot enter the market? Which strategies should the brand develop to become a reference in China?

In order to answer these questions, we will first analyze the marketing audit of the brand Secondly, we will develop the marketing plan, by explaining our ideas on how to become a leader in the Chinese industry.

Extraits

[...] Budget * LVMH has bought 55% of Wen Jun Distillery, which decreases our production costs * We do not have any stores During the 1st year, Veuve Clicquot has a return on investment of During the second year, we expect to have a return on investment of Both are quite good and even if to enter a new market the ROI in general is quite low, you have to remember that you are part of LVMH group, which helps us in our investments. As we already said, promotion is a key value to enter a new market. In our third part, we are going to present our advertising layout that will be published in magazines. [...]

[...] Content of Sugar (gram/l) We also are going to adopt several packaging designs that we will adapt to the local needs. We will develop exclusive models in order to demonstrate to the Chinese that they are the heart of our activity. (Price As we are developing a penetration strategy and we are selling our product on the up-market, our price has to correspond to what we offer. Thanks to our recognition, our price will be more expensive than in France. [...]

[...] By entering the Chinese market, the brand can consolidate its image. According to our figures and thanks to an accurate marketing strategy, the brandwill be able to penetrate the market slowly. LVMH and its brands are used to establish themselves in new countries by using a long term strategy: instead of opening stores everywhere, they enter progressively, create curiosity and then become visible enough to be the new market players. References (All the information about LVMH group, its main figures and brands http://www.lvmh.fr/ (All the information about Veuve Clicquot Ponsardin: history, products, price http://www.veuve-clicquot.com/ ( Les Maisons de Champagnes et leurs Grandes Marques Website gives all the figures and facts about French Champagne Brands. [...]

[...] ( Price In order to justify its positioning and its quality products, the brand occupies a high price bracket. Although it is possible to find a bottle of Brut Yellow Label priced around some Vintage bottles are sold for more than €1500. (Place This champagne is sold in specific places: - Internet - In specialized stores (Nicolas . ) - In the domain of Veuve Clicquot - In the Supermarket distribution (Carrefour, Leclerc . ) - Cafes,hotels-restaurants These places are strategic. [...]

[...] Veuve Clicquot is a challenger on its market because of the presence of these major players. The direct competitors are those who label their product Champagne. It indicates that the product is French, as in order to be labelled as Champagne, it has to be cultivated in France. Our main competitors are part of luxury groups. Their products are sold via the selective distribution: they sell a precious product for a very expensive price. Just like Veuve Clicquot, those brands use the non media actions to gain the loyalty of their customers. [...]