Mountain man beer

Case study on Mountain man beer company

• A family-owned business with independent image

• Brewed one beer named Mountain Man Lager

• also known as West Virginia’s beer

• Premium segment market leader in West Virginia for almost 50 years

• Popular among blue-collar workers

MMBC

• Chris Prangel has returned home to manage the marketing operations of Mountain Man Brewing Company (MMBC)

• At that time, the company was experiencing declining sales for the first time in its history

Due to changes in beer drinkers taste preferences, Chris Prangel wanted to launch Mountain Man Light, a "light beer” attracting younger drinkers

WHAT HAS MADE MMBC SUCCESSFUL?

• Manufactured an exceptional beer with a great brand name

• Mountain Man was recognized as a “brand among working -class males” in the East Central region • The good perception of quality and the brand loyalty it

cultivated.

• Never lost sight of their core customer

• Consistency of taste and quality

• The uniqueness(bitter flavor and slightly higher-than-average alcohol content)

• Its history and its status as an independent, family-owned brewery helped to create an aura of authenticity

• Positioning the beer with its core drinkers

• Blue-collar, which tended to be very loyal

• Invested in a number of branding activities to build brand equity with core consumers

MMBC as a Strong brand

WHAT HAS CAUSED MMBC’S DECLINEIN SPITE OF ITS STRONG BRAND?

WHAT HAS CAUSED MMBC’S DECLINEIN SPITE OF ITS STRONG BRAND?

• Over the previous six years, light beer sales in the US had been growing at a compound annual rate of4%, while traditional premium beer sales had declined annually by the same percentage Since 2001, US per capita beer consumption had declined by 2.3%

• Competition from wine and spirits-based drinks, an increase in the federal excise tax, initiatives encouraging moderation and personal responsibility, and increasing health concerns

SHOULD MMBC INTRODUCE A LIGHT BEER?

In response due to declining on sales, MMBC’s options: whether or not to launch the new product

•Mountain Man Light–a “light beer” formulation of Mountain Man Lager

YES

FEASIBILITY OF MOUNTAIN MAN LIGHT

•Nett revenue: $50,440,000•Barrel sold 520,000•Selling price per barrel $97

0.25% Market Share Every Year

•Light beer market share in 2005:18,744,303

With 4% CAGR:2006: 19,494,075 MMBC market share: 48,735 2007: 20,273,838 MMBC market share: 101,369

MMBC Revenue from light beer 2006:48,735x97 = $ 4,727,295MMBC Revenue from light beer 2007:101,369 x97 = $ 9,832,793

The product is expected to cover all its investment costs and become profitable by 2007

Launching Mountain Man light can also increase awareness and uplift the brand value

Coclusion

I feel that Chris Prangel should go ahead and launch Mountain Man light