Mountain Man Brewing Company (MMBC) is facing declining sales and in the competitive beer industry Prangel must make a quick decision of whether or not to launch a new light beer. Many believe that this decision will cause the company to lose loyal customers, but Prangel sees the potential to tap into another target market.
MMBC is successful because of the beer’s strong brand loyalty, distinct customer base, effective marketing, unique taste, and higher than average alcohol content. The problem facing MMBC is that its sales are declining, due to substitute products, health concerns, tax increases, and consumer preference shift. The introduction of a light beer will have both advantages and disadvantages, for example, the product launch will diversify the product line, provide assess to a younger or female demographic. As well there is the opportunity to create a unique light beer that distinguishes itself and maintains brand image. There are many potential disadvantages of releasing the light beer, such as, diluting brand equity, decreasing shelf space for original product, it will be costly to product, it could scare off current customers and there are many strong competitors already in the market. Now one alternative could be to launch the lighter beer with a different name; however, then the cost of launching this product will increase immensely.
MMBC’s Mountain Man Lager is well positioned because it serves the largest market of beer drinkers in the United States, which is white males aged 35-49. The second largest demographic is males who are younger than 39 or females, who are customers of a light beer. In the beer industry, there is a very strong competition between producers; however, there is also competition to maintain beer as the most widely purchased alcoholic beverage. The industry will fluctuate with both changes in alcoholic beverage expenditure