I was really intrigued by our conversation around Opus One and brand spin-offs. I didn't know that Opus One was started by Mondavi, so it was interesting to learn that an ultra-luxury label with strong branding came out of a brand typically associated with wines in the $7-$20 range.
I come from a background in consumer and retail and it's generally accepted that it's much easier to start premium and move down market than it is to move up market. We discussed a few examples in class - Marc by Marc Jacobs, Target collaborations, etc. But these are examples of brands moving down market, arguably at detriment to the original brand. Brands like Michael Kors and Marc Jacobs used to exist in the same space as luxury brands like Burberry, but post the launch of their lower end lines, no longer have the same association.
It's rare that you hear success stories of brands moving up market so what is it about Opus One that worked? Is it because it launched under a separate label? Was it the association of Opus One with Rothschild?
I tried to find other examples of premium brands that had moved into luxury - and potentially because of my lack of knowledge around wine brands more than anything - wasn't able to find many. It seems common for holding companies to diversify across segments, and successfully so. But for an individual brand or a family estate to do so seems just as difficult as it is in retail.
I had this very same thought as somebody who has taken a few marketing and strategy classes and while having no experience, is interested in the fashion world. The reverse move-- from low to high, seems nearly impossible to make (in the wine industry as well as others like fashion).
ReplyDeleteThe only reasoning for how this worked I think is what you mentioned-- capitalizing on the Rothschild name. My thinking is that it is quite similar the cases where Target does a "collaboration" with a high end designer. Target is able to enter a higher market (price wise and status wise) than they could on their own, and the designer gets a chance to spread their name amongst those who will help build their brand name as an "aspirational brand" recognizable (but largely still unattainable) by many. I think the question here is what Rothschild saw that they were getting out of the deal-- whether it was a favor to Mondavi, or the potential to enter into/ be recognized by a new market who would look to them as an aspirational wine, or something else entirely.