(This article is part of an exclusive VitaBella report)(More wine news on www.vitabella.fr).
In the luxury wine market, a strategy focusing only on controlling quality, price and distribution network is not broad enough. The example of the French maker of Cristal champagne which is suing the Spanish maker of Cristalino sparkling wine reminds us that trademark infringement and unfair competition aspects must also be strictly monitored.
Why is it so important for a 300 US$ champagne producer to sue a spanish sparkling wine company which produces a 10US$ Cristalino Rose Brut? In fact, this is not about market shares (precise sales and marketing figures have been removed from the public court filings). It is about protecting a perennial brand, in other words a brand that is built to last for decades through bad and good economic conditions. Roederer wants to make sure that Cristal, a brandname they created in the past, will continue to develop in a rock-solid, lasting and recognizable brand. In that sense, this is a good example for luxury wine producers to consider the three major reasons why they should strictly monitor this kind of issues.
Social aspects
In the luxury wine market, a strategy focusing only on controlling quality, price and distribution network is not broad enough. The example of the French maker of Cristal champagne which is suing the Spanish maker of Cristalino sparkling wine reminds us that trademark infringement and unfair competition aspects must also be strictly monitored.
Why is it so important for a 300 US$ champagne producer to sue a spanish sparkling wine company which produces a 10US$ Cristalino Rose Brut? In fact, this is not about market shares (precise sales and marketing figures have been removed from the public court filings). It is about protecting a perennial brand, in other words a brand that is built to last for decades through bad and good economic conditions. Roederer wants to make sure that Cristal, a brandname they created in the past, will continue to develop in a rock-solid, lasting and recognizable brand. In that sense, this is a good example for luxury wine producers to consider the three major reasons why they should strictly monitor this kind of issues.
Social aspects
For Roederer, Cristal is not only a champagne, it is a "symbol of certain achievement in life,". Cristal is regarded by most as a symbol of wealth and status. In that sense, Roederer can not afford letting this brandname decline. On the contrary, Roederer must bring it even higher. All over the world, most consumers talk about Cristal Roederer and not the other way round, Roederer Cristal. On this aspect, the power of the Cristal brandname is very strong and protecting this name is key to reinforce the power of a name which is a symbol of status.
Accounting aspects
Most large companies value trademarks and brand names in their balance sheet. And increasing shareholder value is one of the top management's tasks over a medium and long term. So the higher the value of the brands, the higher the total value of the company will be in the future. This is the reason why protecting Roederer name is highly important and doing the same for Cristal brandname is key.
Brand extension aspects
Brand extension aspects
If companies want to create and develop strong brands, they must protect them. If your business is global, you should protect them internationally. But you have to be fast and react immediately. At the end of the day, management's decision will always be related to how far they want to bring their brands and if brand extensions would be relevant for the company or not. If extending your brand - such as launching a new version of Cristal (Cristal Rosé is already one) or bringing to the market a new product attached to the Cristal brandname - is an opportunity in the future, it must be necessarily protected.
Some more aspects could be described to explain why a luxury wine producer should strictly monitor trademark infringement and unfair competition issues. And many more should come as
the power of brands in the future may continue to increase in the wine business. (More wine news on www.vitabella.fr).
the power of brands in the future may continue to increase in the wine business. (More wine news on www.vitabella.fr).
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