Champagne belongs to the "Wines and Champagne" market. This market is constituted of numerous actors which are the wine growers, the Houses of Champagne and the cooperatives. These actors are at the same time suppliers and competitors on the Champagne industry but also on the grape industry, the main raw material used in the production of this luxury product. In 2004, more than 300 million bottles of champagne were marketed in the world for an amount about 3.6 billion Euros. Contrary to the French wine market, the industry of the champagne was concentrated very early. In 2004, 82 % of the turnover of the sector was realized by the ten biggest groups. This proportion was already around 84% in 1990. Among ten major actors, four groups which are quoted on the stock exchange, distinguish themselves and realize half of the sales in value: LVMH Champagne which dominate, in France, the Champagne industry, Vranken-Pommery, Lanson and Laurent-Perrier.
[...] This tendency can be explained by the fact that the French economy is not so good and consumers are careful, or by a market tendency. But this tendency seems to be common among consumers and Champagne brands have to be careful. It is important to underline that those two competitors are very important because the market tendency is towards sparkling wine. Keeping in mind that not only sparkling wines are important to consumers but also luxury traditional wines, and since a very long time, it is a challenge for luxury Champagne. [...]
[...] The packaging is different for every kind of wine and there is always a change in packaging for special events like Christmas. The offer is important and gives the customer more choices. Here is a list of comparable actions that luxury and standard brands have undertaken: January For the Saint Valentine day, Nicolas Feuillat changed his 2005 vintage 1998 with a new design created by the stylist Stella Cadente. The restorers took part in the operation. Décember 2004 Piper Heidsieck sold its Brut Rosée sauvage in a bag made of satin Pommery made a new design for its champagne Pop thanks to the designer Maurizio Galante. [...]
[...] Indeed, the champagne market is made of a lot of rules in order to protect its quality. Indeed, the French state has instituted at the beginning of the century the AOC, appellation d'origine contrôlée (controlled label origin). It protects the quality by preserving the fabrication's conditions. Thanks to this, Champagne has no direct competitors, except the different brands of Champagne. The competition is important and international. We can note, the luxury Brands like grande Dame', and DomPerignon from Moet et Chandon or Cristal from Roderer, and also standard brands like Mercier, Lanson or distributors' brands like Deutz which are sold in supermarket. [...]
[...] Copy Strategy: Veuve CLICQUOT grande Dame' Main fact: The Champagne market is fine and the sales are growing because of exports. Moreover, Champagne is linked to the concept of celebration, and to the French tradition. Problem: How Grande Dame' can be considered as an ‘in' drink? - it means that when people want to organize a remarkable party they choose to propose the Veuve Clicquot Champagne. Objective: It's mainly an image objective; the goal of this campaign is to modernize the image of this traditional Champagne. [...]
[...] 1841: Madame Clicquot retired, and Werlé's family started managing 1866: Madame Clicquot dies 1972: First cuvee of La Grande Dame Vintage 1966 was released in this year to celebrate the house's two hundred year old wines (bicentennial) 1996: La Grande Damme Rosé Vintage 1988 is released OPPORTUNITIES THREATS Dynamism of the world market of - Increase of production costs wines and spirit: a turnover of (price of the grape) 272 billion dollars Champagne -the world reference - Increase in the costs of of effervescent wines marketing (increase f the France -first consumer country marketing budgets) of champagne - Arrival of new cheaper products The high price(prize) is accepted by the consumers - More than 13,000 brands in this market The champagne positions on the Intensification of the competition carrier market of luxury products between the brands of the Houses of champagne, Cooperatives and Exploitation of a common label Wine growers: these 3 actors are for all the operators (common at the same moment suppliers and naming: ‘champagne') competitors in the market of Household consumption of champagne and also grapes champagne and sparkling wines - Strong concentration of the progressed in volume and in value Champagne industry: numerous in 2004 and in 2005 actors are on the French market -The Houses of Champagne exploiting(running) strong brands - Rules concerning Champagne are increase their price and increase very strict (production, bottled, in value price, labelling) Rate of penetration of champagne compensation in the price is lower than the other wines: 29% increase of the raw materials of the French households buy Importance of the producers of champagne, coincidental champagne - of companies in consumption 2004 with a turnover which - Decrease of the basic products represents of the sector (Distributor brands) Increase in the average price of the champagne Strong presence of ‘champenoises' cooperatives: 800 million Euros of the turnover which represents of the activity of the branch STRENGHS WEAKNESSES Veuve Cliquot belongs to LVMH - Image of the brand Veuve champagne and benefits from the Clicquot is getting old image and the notoriety of the - Value creation by a positioning group in the up-market Turnover of LVMH champagne -1009 - The main goal of the group is to million Euros in 2004 (Houses of favor the most generative products champagne) of margins Group LVMH - world leader of the Champagne market (development of brands with a strong notoriety such as Veuve Clicquot) Part of the turnover of the group in wines and spirits: more than a billion euros turnover million bottles of champagne produced in 2004 -Increase of the turnover by 7.8 % in 2005 -Veuve Cliquot Ponsardin: house created in 1772 strong notoriety and know hows 2nd brand of champagne after Moët and Chandon with of the turnover in the export in 2004 and a turnover of 261 million Euros in 2005 -380 hectares of vineyards Caskets with packaging, innovative and attractive for the consumers Brand presents events, in relation with the luxury and fashion: The Veuve Clicquot business women Award which awards every year's business women's actions in the world, the annual event ‘Yelloween' during Halloween Strong presence of the brand in the international and in particular in the European market Wide range of products: Brute Carte Jaune Cuvées de prestige La Grande Dame Domino (millésimées) Important range of rosé wine 2. [...]
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