Montgras

1. (a) Although Chile is widely perceived as producing low-quality wines, MontGras can overcome this negative country-of-origin attitude and position itself as a high-quality brand by educating consumers about its own high-quality grape production and winemaking. To improve customer perception and successfully enter the U.S. market, it could control its market position using 4Ps. First, they should set a relatively high price for its reserva wines, and a premium price for the Ninquén. Since the consumption of high-quality brands is increasing while the consumption of lower-quality brands has fallen, MontGras can charge a high initial price when the willingness to pay is high. Then when the demand goes up, it could consider lowering the price to attract more price-sensitive customers. Second, MontGras should package its products always with super materials, for instance, aesthetically pleasing bottles. Like price, consumers judge the quality also by packaging, which establishes the first impression. Third, they can choose an “upscale” distribution channel, such as a “boutique” liquor store or a restaurant, instead of a pub. Consumers who visit on-premise channels are usually upper class and have good taste in wines. Finally, they should use a high-end promotion strategy rather than “£1 off” price offering in the U.K. market. The high-quality wines deserve high prices, so they don’t need discounted prices to attract customers. Tasting parties and inviting wine critics to review MontGras wines is a better way to increase customer value perception.

(b) Chilean wines have a negative country-of-origin effect regarding quality, so MontGras should not use a low-price strategy if it wants to avoid reinforcing intrinsic perception of its low-quality. Its marketing strategy should be consistent through 4Ps. For example, if the Ninquén sells at $24.99, the packaging should reflect that quality, and the distribution channel should never be supermarkets. Because the company wants to position itself as high-quality, it should focus on value perception more than volume.