Terlato Wines International: Managing Rutherford Hill Merlot in a Post-Sideways Market

In 2005, a wine snob in the critically acclaimed movie Sideways denounced merlot. Subsequently, sales of merlot, including sales for Terlato’s Rutherford Hill merlot, declined significantly. Students are asked to evaluate three strategies—rebranding, cutting price, and launching television advertising—that Terlato is considering to reverse this decline.

The learning objective of the case is for students to explore the challenge of managing a brand when external factors cause a decline in category demand. They also explore the role of pricing and advertising in managing a small luxury brand.

The case should be used with Student Supplement: Terlato Wines International: Background Note on the U.S. Wine Market and Terlato Wines International, Case #5-108-002.