Market Research

Market Research create a survey to solve the problems of the case study attached. (Minimum 20 questions) UV0742 Rev. Dec.10, 2010 This case was prepared by Gosia Glinska of the Batten Institute and Professor Marian Chapman Moore. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright ?? 2007 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation. BROOKE CORRELL AND CLOS DU VAL: ADVENTURES IN NAPA VALLEY (A) In June 2001, Brooke Correll joined the privately owned Clos Du Val Wine Company, Ltd., in Napa, California, as the director of marketing. A University of Virginia graduate with an MBA from Duke, she was hired by David Campbell, Clos Du Val’s COO, who had come on board in February 2001. Correll was Clos Du Val’s first marketing professional, and Campbell, who was impressed with her credentials as a former executive at MTV, Ziff-Davis Media, and WineShopper.com, believed the winery desperately needed her expertise. Clos Du Val, which owned vineyards in the Stags Leap District and Carneros, two of Napa’s most coveted appellations, had already enjoyed its glory days, with high ratings accompanied by robust sales. During the 1990s, however, sales had begun to lag. In a 1996 article in Wine Spectator, James Laube chastised the winery for resting on its laurels: To me, Clos Du Val’s wines have consistently failed to improve. Sometimes, you’re defined not by what you’ve accomplished, but by what the competition is offering. In that regard, Clos Du Val has fallen off the pace and dropped well back into the pack.1 Correll could not have agreed more. Clos Du Val’s Cabernet Sauvignon, which she had once liked so much, had fallen off her wine-shopping radar a long time ago. In preparation for her job interview a month earlier, Correll had visited the wine section of Raley’s supermarket in Napa. Like most grocery stores in California, Raley’s had a large selection of wine. It took Correll a while to spot her once-favorite Cabernet among gimmicky bottles with flashy labels, designed to appeal to a young, trendy demographic. Clos Du Val’s distinctive terra-cotta label with white curlicues still looked the way Correll remembered it, but it seemed less vivid and had a new gold trim. Correll needed the help of a store clerk to locate Clos Du Val’s Chardonnay, whose green label bore little resemblance to the terra-cotta one she associated with the brand. 1 James Laube, “Where Clos Du Val Went Wrong,” Wine Spectator, July 31, 1996. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -2- UV0742 What struck Correll most, however, was the price of Clos Du Val’s Cabernet: at $26.99, it cost exactly what Correll had paid for it 10 years earlier. At Raley’s, it sat on the shelf next to a much less expensive Cabernet from the Clos du Bois winery, in Sonoma, California. Correll wondered how much confusion there was between these two similar-sounding names. Whoever put the two bottles on the shelf next to each other must have thought all the wines named “Clos” were the same. But what did consumers think? There was little doubt in Correll’s mind that Clos Du Val had missed out on the 1990s wine-industry boom, which had been powered by a strong economy and exploding demand for red wines. Clos Du Val sold its Cabernet for less than $30, while other established Napa Valley wineries such as Grgich Hills, Chateau Montelena, and Stag’s Leap Wine Cellars routinely charged upwards of $50 a bottle, and hip newcomers were selling their “cult” wines for hundreds of dollars apiece. Bernard Portet and the Birth of Clos Du Val Bernard Portet, the president and winemaker of Clos Du Val, was born in 1944 in Cognac, France, and grew up at the famous Château Lafite-Rothschild, where his father was the régisseur (technical director). After graduating from the School of Enology in Montpellier, France, he was hired by American businessman John Goelet to manage a château that Goelet hoped to establish in France’s Bordeaux region. When that plan fell through, Goelet sent Portet on a global search to identify the best land for producing world-class Bordeaux-style Cabernet Sauvignon blends, like those made by Château Lafite. Two years later, Portet narrowed the choices to five—Chile, Argentina, South Africa, Australia, and California—eventually landing some 60 miles north of San Francisco in Napa Valley. When Portet first visited the United States, in 1968, he found a very young industry with a dozen or so pioneers from Europe. Even though such wineries as Heitz Cellars, Mondavi, Inglenook, and Beaulieu Vineyards had a mission to make good wine, California was known early on mostly for cheap jug-style and fortified wines such as Gallo’s Thunderbird. But Portet quickly recognized the potential of Napa Valley’s unique terroir.2 Its cool nights and warm, dependable sun, combined with its rich soil, resulted in one of the greatest grape-growing regions in the world. Portet identified the area later designated as the Stags Leap District as best suited for growing Bordeaux varietals, and persuaded Goelet to acquire 150 acres. Soon after, Goelet bought 180 acres in the cooler Carneros region of Napa Valley, perfect for growing Pinot Noir and Chardonnay, the Burgundian varietals. Founded in 1972, Clos Du Val (French for “a small estate in a small valley”) quickly became one of Napa Valley’s most prestigious wineries. What set Portet apart from other New 2 A French word with no precise English equivalent, terroir (place) encompassed many different aspects of place, including geological (e.g., soil structure, composition, and drainage), topographical (e.g., exposure and altitude), and meteorological (e.g., regional weather patterns and local microclimates). Source: Paul Lukacs, American Vintage: The Rise of American Wine (Boston: Houghton Mifflin, 2000), 434. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -3- UV0742 World pioneer vintners was his Old World approach to winemaking. He focused on producing wines the winery termed as “balanced, elegant, and complex.” Or, as Portet liked to say, Clos Du Val made “California wine with a French accent. My father taught me a long time ago that it’s very easy to make a forward wine that jumps out of the glass. But it’s very difficult to make a wine that will last, one that is more refined and balanced and will age well.” Success came early to Clos Du Val. The first vintage of its 1972 Cabernet Sauvignon was among the five California Cabernets selected for a 1976 event organized by British wine merchant Steven Spurrier and subsequently dubbed “the judgment of Paris.” A panel of the most influential French wine experts judged—without the benefit of labels to guide them—California Chardonnays against white Burgundies and California Cabernets against red Bordeaux. (See Exhibit 1 for the results.) To everyone’s surprise, American varietals narrowly defeated their French counterparts, catapulting California wines onto the world stage. Clos Du Val’s Cabernet took an impressive eighth place. That same vintage came in first in a 1986 rematch, proving that Clos Du Val’s wines aged exceptionally well. (See Exhibit 2 for Clos Du Val’s timeline.) Clos Du Val’s Product Line-Up Clos Du Val made its first wines—Cabernet Sauvignon and Zinfandel—in 1972, from purchased grapes with mostly borrowed equipment; it did not enter the market until 1974, when it released its two-year-old Cabernet at $6 a bottle. Clos du Val’s original terra-cotta label bore an image of the Three Graces, who personified splendor, mirth, and good cheer in Greek mythology.3 Surrounding the Three Graces was a calligraphic extension of the Clos Du Val name—white curlicues that resembled the tendrils of a grapevine. The label was based on an engraving by Leo Wyatt, a British artist who had been inspired by a small sculpture The Three Graces, created by Georg Petel, a 17th-century German artist.4 It was a nod to the winery’s European heritage and its Old World artisanal approach to winemaking. The label’s distinctive terra-cotta background and textured, mattefinish paper further emphasized the fact that Clos Du Val made handcrafted wine. (See Exhibit 3 for Clos Du Val’s original label.) By 1996, Clos Du Val’s wine portfolio had expanded to 13 wines, which were released in four tiers: Classic, Reserve, Terroir, and Carneros. (See Exhibit 4 for Clos Du Val’s product line-up.) The Classic Series’ Cabernet Sauvignon retained the original terra-cotta label, but the Merlot and Zinfandel were differentiated by wide horizontal stripes—blue and brown, respectively. While the Merlot’s label displayed the Napa appellation, the Zinfandel’s label denoted the broader appellation of California. 3 In Greek mythology, the Three Graces—Aglaia, Euphrosyne, and Thalia—were goddesses of fertility. 4 John Goelet later donated this statue to the Boston Museum of Fine Arts, where it became part of the permanent collection. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -4- UV0742 The Reserve wines had black labels. The Terroir Series featured elaborate blue-and-gold labels with cursive fonts intended to showcase the particular vineyard where the grapes were grown, such as the Palisade Vineyard in the Stags Leap District. In that series was Ariadne, a white Bordeaux-style wine named after a figure from Greek mythology.5 Wine with the Vineyard George III designation was made from grapes Clos Du Val purchased from a famous grower in Rutherford, another Napa grape-growing district. The Carneros Series, featuring the Burgundian varietals of Chardonnay and Pinot Noir, was identified by the shaded, olive-green labels with the original logo and the Carneros appellation underneath it. In addition, Clos Du Val released a Vin Gris, a pale rosé made from red grapes, whose gray label displayed the Napa Valley appellation, and a Sangiovese from the Stags Leap District with a purple-and-black label. Sales, Marketing, and Public Relations When Portet first came to California, he was one of a handful of winemakers who believed that the future of American wine was quality and whose ambition was to make wines that could be considered among the best in the world. Driven by the same goal, those visionaries believed in sharing information. In 1974, when Clos du Val released its first wine, the 1972 Cabernet, Portet obtained a list of retailers and restaurants from friends in the business. He sold his wine by knocking on doors and making cold calls. Portet’s efforts to make the highest-quality Bordeaux-style wine in Napa Valley and his winemaking expertise were recognized early on not only by fellow vintners in California, but also by the top French wine critics. Clos Du Val’s strong showing at the 1976 “judgment of Paris” and its Cabernet’s subsequent triumph in the 1986 rematch proved priceless in terms of publicity. Despite having no formal knowledge of marketing or public relations, Portet—a Frenchman with ties to Château Lafite, making award-winning Cabernet in California—was a perfect spokesman for Clos Du Val. Then came the sea change. By the 1990s, conglomerates were buying up small wineries, exerting their national sales and marketing power. While many players were getting bigger, small, boutique wineries were the ones getting the headlines. Ultrarich “hobbyists” purchased expensive vineyards and brought in celebrity winemakers to produce small lots of wine that sold for more than $100 a bottle. “Cult” labels, such as Harlan Estate and Screaming Eagle, sold their limited-release wines for $1,000 to $1,500 at Internet auctions. The economy was soaring and so were wine prices, with no drop-off in demand. In general, the California wines were better than ever. Indeed, Wine Spectator declared the 1993, 1994, 1997, and 1999 vintages among the best of the decade. 5 In Greek mythology, Ariadne was a Cretan princess married to Dionysus, the god of wine and ecstasy. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -5- UV0742 In 1999, for the second year in a row, Clos Du Val was named a “Winery of the Year” by Wine & Spirits magazine, but its managers began to wonder whether they had missed the mark. After the Internet bubble burst, in the 1990s, wine sales—especially in California—took a hit. To complicate matters, by the time the Wine Spectator article “Where Clos Du Val Went Wrong” appeared, shortly before the winery’s 25th anniversary, American wine critics and wine enthusiasts alike had developed a taste for big, expressive wines—so-called fruit bombs—the antithesis of the more austere and less forward Bordeaux-style wines Portet was making. The biggest fan of the full-throttled California reds was Robert M. Parker Jr., one of the most respected wine critics in the world, whose taste and wine ratings (published in his newsletter, Wine Advocate) had enormous influence within the wine industry. Clos Du Val was snubbed by Wine Advocate, and the only press coverage it received was in small wine-centric publications with circulations of fewer than 1,000. Sporadic mentions in more widely circulated magazines such as Wine Enthusiast, Wine & Spirits, and Wines & Vines, where it scored in the low 80s on a 100-point rating scale, did little to drive sales. When Correll came on board, in 2001, Clos Du Val’s press list was sorely out of date, and so was the content of its website, which greeted visitors with a heartfelt “Happy New Year!”—in June. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -6- UV0742 Exhibit 1 BROOKE CORRELL AND CLOS DU VAL (A): ADVENTURES IN NAPA VALLEY The Complete List of Wines in the Paris Tasting The Paris Tasting (or “judgment of Paris”) took place on May 24, 1976, six weeks before America’s bicentennial celebration. Here are the results, in order of finish: California Chardonnay versus White Burgundy 1. Chateau Montelena ’73, California 2. Meursault-Charmes Domaine Roulot ’73 3. Chalone Vineyard ’74, California 4. Spring Mountain ’73, California 5. Beaune Clos des Mouches ’73 6. Freemark Abbey ’72, California 7. Bâtard-Montrachet ’73 8. Puligny-Montrachet, Premier Cru Les Pucelles ’72 9. Veedercrest ’72, California 10. David Bruce ’73, California California Cabernet versus Red Bordeaux 1. Stag’s Leap Wine Cellars ’73, California 2. Château Mouton-Rothschild ’70 3. Château Haut-Brion ’70 4. Château Montrose ’70 5. Ridge Vineyards Monte Bello ’71, California 6. Château Léoville-Las-Cases ’71 7. Mayacamas Vineyards ’71, California 8. Clos Du Val ’72, Napa Valley 9. Heitz Cellars Martha’s Vineyard ’70, California 10. Freemark Abbey ’69, California Source: Frank J. Prial, “The Day California Shook the World,” New York Times, May 9, 2001. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -7- UV0742 Exhibit 2 BROOKE CORRELL AND CLOS DU VAL (A): ADVENTURES IN NAPA VALLEY Clos Du Val’s Timeline 1970 John Goelet hires Bernard Portet to search the world for the best site to establish a château capable of producing wines of the highest quality and character. Portet settles on Napa Valley. 1972 Clos Du Val completes its first harvest of Cabernet Sauvignon and Zinfandel (from purchased grapes). Clos Du Val also plants its first vineyards on leased property in what is now known as the Stags Leap District. 1973 Clos Du Val acquires a winery site on 150 acres in the Stags Leap District and purchases 180 acres in Carneros. 1974 Clos Du Val marks its first crush at newly completed winery. Its first wine is released—1972 Cabernet Sauvignon, at $6 a bottle. 1976 Clos Du Val’s 1972 Cabernet Sauvignon is selected as one of five California Cabernets for the now-famous Paris Tasting (“the judgment of Paris”), which pitted French Bordeaux against California wines. 1978 Clos Du Val bottles its first Carneros Pinot Noir and Chardonnay (from purchased grapes). 1979 Clos Du Val produces the first Stags Leap District Zinfandel in Napa Valley and builds a reservoir to ready Carneros property for planting. 1980 Clos Du Val plants the first Chardonnay vines in Carneros Vineyard. Begins an export program (1977 Cabernet Sauvignon to England). 1981 Clos Du Val plants its first Pinot Noir vineyards in Carneros. 1983 It produces its first Carneros Chardonnay from Clos Du Val grapes. The tasting room opens. 1984 Clos Du Val makes its first vintage of Carneros Pinot Noir. Bernard Portet, president and founding winemaker, is elected to the board of directors of the Wine Institute. 1986 Its 1972 Cabernet Sauvignon wins the rematch of the 1976 Paris Tasting. The ranking establishes Clos Du Val as the top winery for producing wines that stand the test of time. 1988 Its first Carneros Chardonnay is released (1986 vintage). 1992 The first Carneros Pinot Noir is released (1988 vintage). 1997 Clos Du Val celebrates its 25th anniversary. Portet serves as chairman of the Napa Valley Wine Auction. 1998 Clos Du Val is named a “Winery of the Year” by Wine & Spirits magazine. 1999 Clos Du Val hires John Clews, vice president of vineyard and winery operations. Clos Du Val is named a Wine & Spirits “Winery of the Year” for the second year in a row. Clos Du Val introduces Ariadne. 2001 David Campbell is hired as COO in February and promoted to CEO in November. Source: Clos Du Val. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -8- UV0742 Exhibit 3 BROOKE CORRELL AND CLOS DU VAL (A): ADVENTURES IN NAPA VALLEY Clos Du Val’s Original Label Source: Clos Du Val. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -9- UV0742 Exhibit 4 BROOKE CORRELL AND CLOS DU VAL (A): ADVENTURES IN NAPA VALLEY Clos Du Val’s Product Line-Up Classic Series Terroir Series For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 -10- UV0742 Exhibit 4 (continued) Reserve Series No Series Designation Carneros Series Source: Clos Du Val. For the exclusive use of D. Hildebrand This document is authorized for educator review use only by Diogo Hildebrand Grenoble Ecole De Management until August 2015. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860 Question 1: Analyse the case Clos du Val and identify: - Managerial issue(s): Correll gets the job and has six months to gather information and makes recommendations. Please detail what problem she needs to solve. - Marketing research problem(s): What does Correll needs to know? Specific components of marketing research problem(s). Answer: - When joining the company in 2001, Brooke Correll needed to solve many problems: ?  Firstly, the design of the bottle. When preparing her interview, she entered in a supermarket in Napa and she took a while to spot her favorite Cabernet. Other wines had flashy labels and were more distinctive. Clos Du Val’s label was old and not recognised. So, should the bottle be redesigned? ? Then, she was  astonished that the price of the bottle was still at $26.99. It remained the same price she paid ten years ago. The competitors sold their wines at $50 and sometimes even more ($100). Therefore, should the price of the brand be increased? ? Clos du Val’s Cabernet sat next to a much less expensive Cabernet on the shelf which can be confusing. There is clearly a brand’s reputation problem that needs to be solved. What existing methods can be used to give the brand more credibility? ? Clos du Val has history. How is it possible to underline it when marketing the product? ? Finally, when she arrived in 2001, both press list and website were out of date. There was definitely a management problem. Should the decision makers hire people and create new departments that will take care of this? - Before taking any decisions, Brooke Correl needs to know and understand a few aspects: ? Firstly, the marketing research will need to figure out consumer preferences and purchase intentions in terms of design. ? Secondly, analyse the price elasticity of demand and the impact on sales and profits of various levels of price changes. ? Then, in order to improve the brand’s reputation, determine where and how to sell by asking questions to specific consumers. ? Finally, analyse if a website is necessary and if yes, to determine who will go on it and what changes need to be done before releasing it officially. Question 2: - How can Correll gather the information she needs to answer the market research problem(s) and solve the managerial issue(s)? -Given the time constraints, what is the first thing she needs to learn? And the second thing? Answer: -According to the identified problems, Brooke Correll can use two types of marketing research designs: exploratory or descriptive. ? The exploratory model formulates and defines a problem more precisely. In this case, as there are problems related to the design and the price, it would be interesting to discover both advantages and disadvantages of these aspects. A typical research question would be: “what is the benefit of having such a design”? This would probably solve the managerial question: “what type of design is appealing to consumers”? The method uses secondary data and qualitative research. ? The descriptive method describes the characteristics of relevant groups such as consumers, organisations, marketers, salespeople...This helps to understand the perceptions of product characteristics and to make specific predictions. As Clos Du Val faces brand’s reputation and design problems, it is an appropriate way to know what consumers really think. For example, “what’s our brand’s image nowadays?” could respond to the decision making question: “how should our product be redesigned”? As the company faced distribution and targeting problems, other examples could be: “where will people buy our product”? or “what kind of people will buy our wine”? or “which consumers are going to buy our products”? Finally, the last advantage to use such a method is that change can be detected by using a longitudinal design. This means that you will ask the same questions at a different time. This could be interesting for the brand as they are looking to grow in the future.