...Managerial Analysis Mountain Man Brewing Company Goes “Light” 12/13/2010 Mountain Man Brewing Company Nicole Fiamingo Company History Mountain Man Brewing Company was established in 1925, and since then has come to be known as “West Virginia’s Beer”. In 2005, despite a 2% drop in annual sales they sold approximately 520,000 barrels and reported revenue close to $50,000,000. Mountain Man Brewing Company’s average consumer is male, above the age of 45 and typically in the middle-to-lower income bracket. With a small number of Mountain Man Brewing Company’s consumers making up a large percent of their sales, it is important for the company to appeal to that small number of consumers, and ensure they are satisfaction to their brand loyal. Competition: Recently, the state of West Virginia repealed the arcane law; allowing retail stores to sell beer at discount prices. This creates pressure on old school regional breweries, like Mountain Man Brewery Company, to try and compete with the “top-dogs” of the industry. Future of the Beer Industry: As beer sales are not largely affected by economic downturns, Sales are however, affected by change in consumer (taste) demand. Current demand: In 2005 light beer accounted for over 50% of total beer sales; putting pressure on Mountain Man Brewery to introduce a light beer line into the market ( or make some other change), in order to remain profitable. Financial Assumptions 1) Mountain Man Brewing Company will only...
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...MOUNTAIN MAN BREWING COMPANY Bringing the Brand to Light CASE STUDY ON BRAND MANAGEMENT AND PRODUCT INTRODUCTION Mountain Man a well-known brewing company is planning to introduce a new product line of beers. This case analysis and decides whether Mountain Man should go with its product introduction or not considering its financial health and brand value. Narendhiran S 2012H149236P 1. INTRODUCTION Company: Mountain Man Brewing Company is a family owned brewery located in West Virginia, established in 1925.Mountain Man brewed only one beer Mountain Man Lager also known as “west Virginia’s Beer” and a “Working man’s beer”. The company is experiencing a decline in sales by 2% due to changes in the preferences of beer drinkers. Present Position in the Market: Product – Mountain Man Lager, Bitter flavoured beer with slightly higher than average alcohol content and darker color. To accentuate its dark color, the beer was packed in a brown bottle, with its original 1925 design of crew of coal miners printed in the front. Mountain Man’s main differentiation from its competitors is its product. Price – Mountain Man Lager was priced similar to its competitors. Its price is $2.25 for a 12 ounce serving draft beer in a bar and $4.49 for a six-pack in a local convenience stores. Place – Their primary market was in East Central Beer Region – Illinois, Indiana, Michigan, Ohio and West Virginia. MMBC’s beer is mainly sold in liquor stores and super markets. Promotion – MMBC did not...
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...Decision to be made Mountain Man Brewing Company is a family owned business that brewed one beer, Mountain Man Lager, also known as “West Virginia's beer”. Mountain Man Lager held the top position among lagers in West Virgina for almost 50 years and had respectable market share in most states. The company over the years relied on its history and its status as an independent, family owned brewery to create an aura of authencity and position the beer with its core drinker – blue collar, middle to lower income men over age 45. However, Mountain Man Lager was a legacy brew in a mature business. By 2005 Mountain Man generated revenue of just over $50 million and primarily distributed Lager in Illionis, Michigan, Ohio and its native West Virgina. However, the recent changes in the beer drinkers' preferences, the company is experiencing decline in sales. Over the previous six years light beer sales in the United States had grown at a annual rate of 4% while traditional premium beer sales had declined annually by same percentage. With this on going trend Mountain Man Brewing Co. was set to loose 2% each year annually, see section A. for projections for next 4 years. In the lights of such industry trend Chris Prangel, needs to decided whether to produce Mountain Man Light, a light beer formulation of Mountain Man Lager, in the hopes of attracting younger drinkers to the brand. Alternatives Mountain Man Brewing Co. has been facing serious challenges from maturing market and new...
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...Problem: Mountain Man Brewing Company (MMBC) was founded in 1925 by Chris Prangel’s father with one flagship brew, Mountain Man Lager. For the first time in its history, the brewery is facing declining sales. In light of this decline, Chris Prangel, a second generation brewer, is considering launching Mountain Man Light beer. The light beer market has experienced a 4% annual growth over the past six years and represents an opportunity to boost sales by entering a previously untapped market. Background: MMBC relies on its core image of being a family owned, independent brewery. MMBC’s beer formula is associated with quality. The specialty hops and barley in Mr. Prangel’s recipe have added to MMBC’s reputation of superior quality in the East Central region. In particular, the hops used in this recipe create a “bitter” flavor, which differentiates it from their competition among other mass-produced beers. MMBC’s bottles take differentiation one step further; the lager is bottled in a dark brown glass with original images of 1925 of coal miners printed on the front label. Launch: If Prangel were to launch a new light beer under the MMBC brand name, the brewery would be able to capitalize on the Mountain Man Brewing label and reputation. MMBC’s core demographic—males between the ages of 45-64 years old—is shrinking. The growing consumer segment for beer consumption is younger drinkers between the ages of 21-27 years old, which accounts for over 27% of the total...
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...Case Analysis Mountain Man Brewing Company Case Analysis Mountain Man Brewing Company Executive Summary Started in the year 1925 by Guntar Prangel Mountain Man Brewing Company (MMBC) was a well-entrenched company in the East Central US by 1960. Consecutively the company grew as a legacy brewery, gathering a very strong brand loyalty and positioning. Known for the authenticity, quality and taste the company grew out to be a market leader in the currently matured business. However, off late the company has been witnessing a drop in sales for their core beer product the “Mountain Man Leger” in contrary to the growing beer sales in the US. The following document encapsulates a detailed analysis of the different problems the company started to face, the strategic objectives available and the most viable option that the Protagonist Chris Prangel’s (son of founder Guntar Prangel) should be taking. Further the Document also discusses the competitive challenges that the company phases The document also addresses the dilemma Chris faces whether to making reforms in business strategies or to continue with the existing sale and product line model and explains the tradeoffs that lie therein. Q2. Start by summarizing the chief protagonist’s decision tree. What are the key strategic issues that the firm faces? What are the options in terms of actions and what outcomes need to be enabled? Decision Tree: Chris has a conundrum to address, basically the growth strategy...
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...Mountain Man INDIAN INSTITUTE OF MANAGEMENT INDORE Marketing Management–II Case Analysis Mountain Man Brewing Company: Bringing the brand to Light Section C - Group 01 Introduction The case focuses on the concept of Line Extension in the context of Mountain Main Brewing Company. The background emphasizes on the dilemma of the protagonist as to whether or not to introduce a new product line by en-cashing on the existing brand value. Case Facts: Existing Product: Mountain Man Lager Product Features : * Strong bear with a bitter taste due to high alcohol content. * Strong local brand association and high brand loyalty from middle aged men * Popular among low middle class men and blue collar males * Perceived image of a tough rugged drink and popularly known as “working man’s beer’ Problem Incurred * Company is facing declining sales at the rate of 2% annually since its inception * Restricted target market of 45+men Problem Statement analysis: Some of the possible reasons are : Environmental Factors | * Stringent federal excise tax rules * Changing demography into a much younger group | Competition | * Heavy competition from wine and other spirit based drinks * Competition from existing beer market | Consumer | * Increasing health concern * Newly developing personal responsibility | Changing drinking patterns | * With increasing youngsters into the demography...
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...Case Study: Mountain Man Brewing Company Situation/Background Analysis: Mountain Man Brewing Company (MMBC), located at West Virginia State, was a family-owned beer company, which possessed respectable market shares in the Central East beer region of the United State. Thanks to the unique bitter flavor and the high quality of its only product -- Mountain Man Lager, which was selected as the “Best Beer in West Virginia” and “America’s Championship Lager” recently, the small company gained a national well-known reputation and therefore was able to survive in the fierce competition of the U.S beer market. In addition, the core customers of MMBC, baby boomers, blue-collar, middle-to-lower income and mid-aged men, still shared their ultimate loyalty to the brand and formed a stable, large portion of annually profits to the company. In spite of all the strengths above, in 2005, the company encountered the first decline on products sale during its 80-years history. Based on market researches, the company believed that this decline was induced mainly by two reasons: 1. Over the past 6 years, the traditional premium beer segment to which MMBC belongs had shrunk, due to the growing light beer segment. 2. Mountain Man Lager, as MMBC’s core product, is not popular among younger drinkers who constitute the vital consumer segment for beer companies. Such a decline became a clear alarm to the MMBC management team after the company had seen so many other regional breweries disappear in the...
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...Bringing the Brand to Light MOUNTAIN MAN BREWING COMPANY CASE ANALYSIS Pei-Chi Lee Rahul Lakhanpal Feridun Sarihan Saim Onur Tamer Weiqiong Vivi Zhuang March 29th, 2011 Problem Definition Facing decline in annual sales, changes in beer drinker’s preference and continuous growth in light beer sales in the whole beer industry, Mountain Man Brewing Company (MMBC) is standing at a crossroad as to whether or not introduce Mountain Man Light to expand consumer demographic into younger consumer segment and capture light beer drinkers. Advantages of doing so were obvious, however, the possibilities of diluting the Mountain Man brand equity, alienating the core customer base and cannibalizing sales of Mountain Man Lager were some real risks that could irreversibly damage the brand. Thus they need to address two issues: whether or not to launch Mountain Man Light and what strategy to employ for the introduction of Mountain Man Light. Pros of Launching the Mountain Man Light As the only beer category demonstrating consistent growth, light beer had been steadily gaining market share, increasing from 29.8% in 2001 to 50.4% in 2005. This was high growth rate that any beer manufacturer should not ignore (Exhibit1). Furthermore, Mountain Man Light would have different customer demographic and different distribution channels from that of the existing Mountain Man Lager thus minimizing the risk of cannibalizing Mountain Man Lager’s current sales. First of all, launching light beer...
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...Mountain Man Light: More Profits or Less Brand Equity? TMBA BBUS 506 A Michael Cavelero, Joel Engstrom, Nesreen Zadah, David Tobey 5/3/2010 1 | P a g e Introduction "We are not here to sell a parcel of boilers and vats, but the potentiality of growing rich beyond the dreams of avarice." – Samuel Johnson, ‘On the Sale of Thrale’s Brewery’ “Some of those coal miners could really drink some beer. We would always stay until closing time, and it happened so many times that the busses were not running anymore. Many weekends we’d get back early in the morning, and we had to be at the coal mines at six in the morning. All we could do was change our clothes, take our lunch bag and go to work.” – Jeff Noordermeer, ‘Fifty Years of My Life’ It should surprise no one that West Virginia is beer country. Originally “beyond the pale” of European settlement in Virginia Colony, the Appalachian Mountains were nevertheless welltraversed by Scottish traders hawking spirits to the resident Cherokee. The cessation of the French-Indian war in the 1760s brought permanent settlement by Welshmen, Germans and even more English – all of whom fancied a solid stout. The 1800s saw the start of the long coal boom that transformed Appalachian society, converting subsistence farmers into coal miners and commercializing beer production to meet rising demand. That trend continues today: so popular is beer that West Virginia University has classes on the subject. Mountain Man Brewing Company...
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...MMBC Case Analysis Mountain Man Brewing Company Case Analysis Mountain Man Brewing Company (MMBC) is a beer brewer and has so far sold just one brand under its brand called the Mountain Man Lager. The management is deciding to extend its product brand and introduce a Light Beer called Mountain Man Light. In the do-nothing scenario, MMBC projections are: Sale Projections 2005 MMBC Lager Profit Margin 6.2% 5.9% 5.6% 5.3% 5.0% 4.7% 2006 2007 2008 2009 2010 $50,440,000 $49,431,200 $48,442,576 $47,473,724 $46,524,250 $45,593,765 Chris is considering launching a Light Beer product to extend the MMBC product portfolio. However, in order to be successful, a lot of factors need to align with his strategy: Cannibalized sales must make up for profits lost and incidental expenses incurred to launch the new beer product The Lager brand must be preserved as a separate brand from the Light beer in order to keep milking the brand Marketing communications for the two products should be distinct and not overlapping Capacity of the current plant should be enough to meet potential splurge in demand, in case the product is successful Relationships will need to be established with a new distribution channel (on-premise) Budgets must be able to support the advertising plan of action Management buy-in is a must to ensure commitment to this product launch and is vital for its sustenance The goal of Chris’ plan should be to: a. In the short term, transition the...
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...MMBC | Mountain Man Brewing Company: Bringing the Brand to Light | Marketing 6520: Case Analysis | | EMBA id: 005814399 | 2/23/2013 | | Solution Proposal Chris Prangel is preparing to inherit a multi-generational business and wanted to explore the implications for expanding beyond Mountain Man Brewing Company’s (MMBC) one product offering-Mountain Man Lager. After reviewing MMBC’s current state of affairs and analyzing it with different marketing tools and financial forecasting, I recommend that MMBC move forward with a premium light beer product, start research and development on a recipe and retain a marketing firm to help build brand awareness in 2006 and launch in Q1 2007. A premium light beer will not only capture a new demographic by extending the MM Lager brand, but will steadily and profitably replace the 2% annual decline in Lager revenue. (See exhibit 3). In order to defend my recommendation, I utilized a few different assessment tools including a Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis (See exhibit 4). This analysis quickly pointed out areas of brand strength and the opportunities available in diversifying the product portfolio. Additionally, both the threats and weaknesses detail the unfavorable position the company faces when launching the light beer line. I also performed a portfolio analysis incorporating the product/market expansion grid which allowed me to outline market segmentation and product positioning...
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...Overview Mountain Man Beer Company (MMBC) is experiencing the first decline in sales since its establishment in 1925. Suggestions such as remaining status quo, promoting Mountain Man Lager, and introducing a light beer, may be considered to help MMBC in its future survival. Analysis of Alternatives To analyse the potential impact of these solutions, we have used MMBC’s SWOT analysis (Appendix 1) and STP analysis (Appendix 2). Sales of premium beer have been declining by 4% each year since 2000.With increase in excise tax and competition from other companies, lager beer consumption is expected to decrease over the next few years. By remaining status quo, it is foreseeable that MMBC will continue to lose sales in their one and only product, Lager, due to the decrease in demand. Thus, there is a need for them to take action. Greater marketing efforts may be injected to boost the sales of Lager. However, as the beer market is diminishing, it is likely that this will prove futile. Furthermore, MMBC has limited financial resources to fight for higher market share from the current major producers such as Anheuser Busch and Miller Brewing Company. Despite his father’s opposition, Chris should still go into light beer, as it is hard to ignore the fact that it is a growing market, while premium beer is a declining market. The company’s ultimate aim is survival and profit maximisation, and stubbornly refusing to adapt to market trends may compromise that aim. Profitability...
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...Mountain Man Brewing Company:Bringing the Brand to Light Market definition: American Beer Industry Market size: $75 billion industry Industry trends: y Over the previous six years, light beer sales in the United States had been growing at a compound annual rate of 4%, while traditional premium beer sales had declined annually by the same percentage. y U.S. per capita beer consumption had declined by 2.3%, largely due to competition from wine and spirits-based drinks, an increase in the federal excise tax, initiatives encouraging moderation and personal responsibility, and increasing health concerns. y Economies of scale of large national brewers. y Key consumer segment was younger drinkers (13%) who preferred light beer and accounted for 27% consumption. SWOT analysis Strengths Evidence Implications Market leader and established It had held the top market Strong brand awareness brand name. position among lagers in West motivates consumers to Virginia for almost 50 years. purchase Lager. Ability to leverage awards as ³American Champion Lager´. Strong brand equity Mountain Man Lager¶s distinctively bitter flavour and slightly higher thanaverage alcohol content that uniquely contributed to the company¶s brand equity Estimated cost of $10 million to $20 million in TV advertising. Mountain Man is able to leverage its brand equity and reputation to new products Weaknesses New brand extension will spread already thin resources of the company. Company does not have the budget to...
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...situation? 2 What has made MMBC successful & distinguishes it? 2 What enabled MMBC to create such a strong brand? 3 What has caused MMBC’s decline in spite of its strong brand? 3 Should MMBC introduce a light beer? 4 Is MM Light financially feasible for MMBC? 5 Break-Even Point (BEP) Analysis 6 MM Lager Cannibalization 6 MM Light Marketing Strategies 7 Exhibit 1 – SWOT Analysis 9 Exhibit 2 – Financial Data and Assumptions 10 Exhibit 3 – Break-Even Point (BEP) Analysis Calculations 11 Exhibit 4 – MM Lager Cannibalization Calculations 12 Exhibit 5 – MM Light Marketing Strategy 15 What is the current situation? Mountain Man Brewing Company (MMBC) is a family business founded in West Virginia in 1925 by Guntar Prangel. The company is now operated by Guntar’s grandson, Oscar. Oscar’s son, Chris, is slated to inherit the business in five years when his father retires. Mountain Man (MM) Lager is the flagship product and the only beer currently produced by the company. The recipe for the lager was based on a refined family recipe and is known for its flavorful, bitter taste. By the 1960s, the lager had established itself as a legacy beer with a rich history, and the company continues to maintain its independent, family-owned status which appeals to its core drinkers. By 2005, the popularity of MM Lager in the East Central region of the U.S. had grown to generate revenues of just over $50 million, and the beer held the top market position among lagers in West...
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...Background * Chris Prangle…. MBA graduate to manage the mountain man beer company * Guntar Prangle founded Mountain beer 1925. * Family owned business – inherited for 5 years. * Initially was called as West Virginia beer. * In 2005 …generating revenues $ 50 million and selling over 520,000 barrels of mountain man lager. * Price was $ 2.25 for 12-ounces serving and $4.99 for 6 pack in local convenience store. * Was priced similar to premium brands such as Miller and Budweiser. * Chris want to launch “Mountain Man Light” a “Light Beer” formulation of Mountain Man Lager. * Hoping to attract younger drinkers to the brand. * dark brown bottle packaging. * Last 6 years the sales of Light beer has been growing at a annual rate of 4% and traditional beer declining. * Mid 20’s were very supportive of this light beer. * Woman in her early twenties….. I like light beer and passé (outdated) . would like to try Mountain Man Light. * Brand played a critical role in the beer-purchasing decision. * Consumer considered taste, price, the occasion being celebrated, perceived quality, brand image, tradition and local authenticity. * Drink was for blue-collar, middle-to-lower income men over age 45. * Won awards for best beer championship. * Was consumed by working class males in the East central region on Chevrolet and John Deere. * Subjective attributes were – smoothness, % of water content, and drinkability. * Had...
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