Luxury Wine Marketing: At € 24,90 (instead of € 34,50) in Paris and £20 a Bottle of Champagne Taittinger in London, does it impact negatively the brand ?
An editorial by Guillaume Jourdan
Some time ago, it was Champagne Bollinger. In 2011 it is 'Champagne Taittinger's turn. What's happening in UK, a key market for champagne houses at a time (christmas season) when huge volumes are at stake? Actually, for Taittinger it also happens in France as Lavinia announced a price of € 24,90 (instead of € 34,50) per bottle. Champagne is luxury but at £20 a bottle of Taittinger (read the related article), is it still luxury? I still think Champagne is luxury and as such a careful brand management must be handled in order to grow the business internationally. But what does it mean Champagne is luxury? It means there is a strong "symbolic value" behind a brand of a bottle of champagne.
Don't get me wrong. Being expensive is not enough to be luxury. But being discounted is enough to damage the brand image of a champagne house because a significant public reduction in price is opposite to Luxury. Making a reduction does not go against a pricing strategy in luxury segment. But the fact to make this reduction public could damage the brand which should have decided a more personalized approach. Why more personalized? To whom? To customers who already bought this brand in the past. Let's call them loyal even if "loyal customers" do not seem to exist anymore. Being personalized, this discount would have had a positive effect on the loyal customers. They would feel privileged. Instead, by making the discount public, the loyal customers would feel "robbed" and the new customers won't recognize the luxury brand image.
A lot of research has been made about "Accessibilty vs Exclusivity" in Luxury brand marketing. But making your brand accessible does not mean you should accept large discounts. Does it hurt the Taittinger brand to be publicly sold at £20? Certainly but Taittinger, after achieving extremely good sales during christmas season, will have to consider a stricter position next year in order not to be discounted again. Why? Because Taittinger does not want to see its brand image being damaged over a long run. The same happened for Bollinger. And Taittinger needs to take a stricter position if they do not want to adress a major concern with their future sales. In fact, the impact of such a low price for a bottle of Taittinger is huge on wine retailers' side. Why? Because it will be much more difficult for wine shops to sell Taittinger during christmas season. Customers will prefer to buy Taittinger in supermarkets rather than at their beloved wine shop. And retailers, being impacted this year by a hard discount, will be scared of another hard discount next year and may prefer to move to another brand.
By the way...don't think it is a "UK only" subject. In luxury, clients travel quite a lot and a strict coherence in terms of retail prices among the different networks and countries is very important for luxury brands. That makes some more homework for the Champagne Taittinger's team during new year's eve...
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