Mountain Man Brewing Company Case Study

Published: 2021-06-29 06:30:34
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[pic 1]MOUNTAIN MAN BREWING COMPANYBringing the Company to LightABSTRACTMMBC, a quality family owned premium beer producer, challenged with declining sales and a single core product, ventures into new territory by leveraging brand equity and launching a new light beer which will increase market share and appeal to a wider demographic.Executive Summary: As premium beer sales decreased by 2.3% nationally, Mountain Man Brewing Company has experienced a decrease in revenue due to an aging demographic and decreasing premium beer market segment. This report contains detailed analysis to examine the impact of Mountain Man Brewing Company expanding its product line into the light beer market response to this trend. The analysis reveals that keeping the current strategy of a single line product, MMBC will continue to lose revenue as sales continue to decline. Light beer sales which are increasing in consumption by 4% annually, represent 50.4% beer volume sales nationally. An introduction of MM light beer, with a slighter higher variable cost than lager will still turn a profit in 2 years. This combined with the cannibalization effect of MM Lager MMBC will see an increase its revenue between 15-20m over 5 years. Furthermore, as MMBC expands its line, it will open a new market segment which appeals to a younger demographic than its core customer, effort will also be placed to increase sales for onsite premises where this segment gathers while minimalizing impact to its core consumer.It is recommended that MMBC take immediate measures to launch MM Light leveraging the brand equity of MM Lager, that a new line manager is engaged with a competent sales team and that the product is released to market for the fourth of July celebrations.Situational Analysis:Overview: Mountain Man Brewing Company (MMBC) was founded by Oscar Prangel in 1925, it is a family owned business who prides itself on being singularly focused on Mountain Man Lager. Using a unique family recipe, Prangel has grown this product to the top market position in the eastern central US with steady growth and selling over 520,000 barrels and revenue of over 50m annually. However in 2005 for the first time in company’s history it has experienced a decline in revenue by 2%.The beer industry is highly competitive, the top producers (Anheuser-Busch, Miller and Coors) maintain a 74% market share in regular beer and 84% market share in light beer which has increased in consumption by 4% annually. MMBC which focuses its sales to Illinois, Indiana, Kentucky, Michigan, Ohio, West Virginia and Wisconsin holds the top accolades for best beer.Mountain Man Lager is a dark bitter beer with strong customer loyalty and brand equity. It is a working man’s beer with its typical consumer being a blue collar male, low to middle income aged 45+. It has occupied the top market position in West Virginia for 50 years and is in the mature phase of a product life cycle.Marketing Mix of Mountain Man Lager:Product:Dark bitter beerUnique family recipeHigh alcohol content compared to other lagersBrown bottle/labelPrice:Similar to domestic brandsLower than craft beersPromotionWord of mouth advertisingGrass roots, traditional advertising unsuccessfulPlacement:Liquor stores and grocery 70%Bars/restaurantsConvenience storesMountain Man Lager has in all accounts been a success and has outlived other rivals by keeping a focus on a single product to a target consumer. However with alcohol consumption trends changing, decreasing revenues, can MMBC leverage its brand equity and produce a quality light beer attractive to a younger demographic and woman with minimal cannibalizing of lager sales or loss of customer loyalty? With Chris Prangel in position to inherit leadership, he must make decisions that can expand its customer base while maintaining its core customer or at least reduce their alienation by affectively appealing to these 2 different market segments.

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