...Mountain Man Case Write-up – Marketing Executive Summary: Mountain Man Brewing Company’s (“MMBC”) goal is to increase Net Income to over $4.5 million annually by capturing an 8.3% share of the 2010 projected age 21 to 27 East Central light beer segment and retaining a 6.7% share of the 2010 projected East Central premium beer market (Exhibits 3 and 5). MMBC’s obstacle is marketing its new light beer without tarnishing its existing Mountain Man brand and cannibalizing its current customers. To achieve this, MMBC should use a horizontal product extension strategy by introducing a new light beer called Mount Light. The new product’s name will be noticeably different than the existing Mountain Man beer, thus reducing the likelihood that it will tarnish its existing brand equity. Mount Light will target the young “first time drinker demographic”, which is a market segment that is significantly different than the current typical Mountain Man consumer. To gain a competitive advantage relative to the large domestic brewers, MMBC should position the new product as an “anti-big-business” beer, making it attractive to younger consumers, and execute a grass-roots marketing campaign. Problem Analysis The status quo strategy for MMBC is not viable: • MMBC revenue is declining (2% annually) and is likely to accelerate due to increasing competition and changing consumer preferences • Light beer is growing rapidly (4% annually) but MMBC is not participating in this market • Mountain Man...
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...customer base. Its product focuses on quality, sales team has helped a lot - "Grass roots" marketing, seventy percent consumed at home, and higher alcohol percentage. What is distinctive about MMBC’s product/ customers? As a product mountain beer has the following distinctive characteristics; smoothness and drinkability, distinctive bitter flavor, slight higher than average alcohol content, also enhance overall image of product, original 1925 design with coal miners’ authenticity and history, and brown bottle accentuating the beer’s dark color taste, ‘strong’. – Whereas, costumer distinctive characteristics would include the following; in stark contrast to other domestic beers, drinkers of Mountain Man Lager skews heavily towards male, 81% compared to 58% for domestic light beers and 68% for domestic premium beers. Mountain Man Lager drinkers are also on the lower income range compared to other domestic beers. In addition, drinkers of Mountain Man Lager also skew older, 64% over the age of 45 compared to 48% for domestic light beers and 49% for domestic premium beers. This customer segment seems to be very brand loyal and influenced by their reference groups. On the other hand, some study participant when asked said: “My dad drank Mountain Man just like my granddad did. How is MMBC’s promotion different and effective? Traditional advertising was not used to promote its products instead the company focused on grass roots marketing as a means of advertising the brand. By using...
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...The Mountain Man - Dashrath Manjhi Dashrath Manjhi, also known as the Mountain Man, was born in 1934 in a poor family in Gahlour village near Gaya in Bihar, India. His father was a labourer. His wife had to negotiate a treacherous path and spend half a day to fetch water from a distant river. One day a thirsty Manjhi was impatiently waiting for his wife to fetch him water from the other side of the mountain. She had taken longer to come back than usual. Then he saw his wife in the distance but she was coming back empty handed. When he asked his wife, "Why are you coming back empty handed and so late? she started crying. She told him that she slipped and fallen down. She also told him that the water pot had broken and that is why she had returned empty handed. She said that she tried but could she save the water pot. The grief and helplessness that she saw on his wife's face was unbearable for him. Moved by his wife's plight and love for her, he said, "I will create a road through the mountain." After saying, "I will do it," Dashrath Manjhi managed to build single-handedly a 360-foot-long (110 m), 25-foot-high (7.6 m) and 30-foot-wide (9.1 m) road by cutting a mountain of Gehlour hills with just a hammer, chisel and nails. He worked day and night for 22 years from 1960 to 1982. This road was a blessing for the people of the area as it reduced the distance between Atri and Wazirganj blocks of Gaya district from 75 km to just one km. Dashrath got hold of a chisel and a hammer...
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...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...
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...DEPARTMENT OF ACCOUNTANCY UNIVERSITY OF ILLINOIS MEMORANDUM TO: Mr. Chris Prangel FROM: Merik Ducker - Section AE1 - Group 8 DATE: September 22, 2015 SUBJECT: Product Launch: Mountain Man Light INTRODUCTION The memorandum will analyze the proposed new product launch of Mountain Man Light (MMLight) for Mr. Chris Prangel, the future owner of the Mountain Man Beer Company (MMBC). More specifically, the memorandum will consider the advantages and disadvantages of launching MMLight, as well as a cost-volume-profit analysis of the proposed new product launch. The memorandum will conclude with recommendations for Mr. Prangel’s consideration. MMBC’S GOALS AND BRAND IMAGE MMBC has retained leadership among premium lagers in West Virginia for nearly 50 years by serving brand loyal, middle-aged, blue-collar males at off-premise locations (such as liquor stores and supermarkets). Though respected for its independence and superior quality, MMBC now faces an aging demographic, a shrinking market segment, and changing consumer preferences. Without alienating existing customers, eroding core brand equity, or succumbing to industry titans, MMBC must find a way to remain competitive and restore falling revenues. ADVANANTAGES OF LAUNCHING MMLIGHT Changing Market Segments The launch of MMLight represents an opportunity to capture shifts in market segments and improve MMBC's recent 2% decline in revenues. Light beer consumption is growing at a 6-year compound annual growth rate...
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...Mountain Man Beer 2/24/11 To: Mountain Man’s senior management team From: 1336226, branding consultant Subject: Proposal to Create Mountain Man Light The decision that Mountain Man Beer Company currently faces is whether to extend its brand name to include a light beer, Mountain Man Light. My position on this decision is that Mountain Man Beer Company should not participate in this extension. It is true that financially the light beer market looks attractive. “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” (Abelli, 1). Another reason why this may seem like an attractive decision is because Mountain Man is experiencing a decrease of sales due to changes in beer drinker’s preferences (1). Also, “Mountain Man’s 2005 revenues were down 2% relative to the prior fiscal year” (4) Together these pieces of information seem to show that extending the Mountain Man brand to light beer is a good idea. However, there are several reasons why I suggest that this extension would actually hurt the brand. Consumer choice of beer is driven by seven main attributes. These attributes are taste, price, the occasion being celebrated, perceived quality, brand image, tradition, and local authenticity. The functional reasons to choose a beer are taste, price, and perceived quality. The emotional reasons to choose a beer are the occasion being...
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...Rochester Institute of Technology | Mountain Man Brewing Company: Bringing the Brand to Light | Advanced Corporate Financial Planning | Professor Testa 1/23/2012 | | | Shaun Levine Ranjan Maitra William Weintraub Taylor Wold Objective Complete a NPV analysis to see if Mountain Man Brewing Company should implement Mountain Man Light to its existing product lines: * SWOT Analysis on Mountain Man Lager * NPV analysis for Mountain Man Lager * NPV analysis for Mountain Man Light * NPV analysis on whole company * Strategic Options Background Guntar Prangel founded the Mountain Man Beer Company (MMBC) in 1925. Mr. Prangel had reformulated an old family brew recipe using a meticulous selection of rare, Bavarian hops and unusual strains of barley, resulting in flavorful, bitter-tasting beer which the Prangel family launched as Mountain Man Lager. By the 1960s, Mountain Man Lager’s reputation as a quality beer was well entrenched throughout the East Coast region of the United States. It was February 20, 2006, in the New River coal region of West Virginia. Chris Prangel, a recent MBA graduate, had returned home a year earlier to manage the marketing operations of the Mountain Man Beer Company, a family owned business he stood to inherit in five years, when...
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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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...Business Case Template Executive summary Provide a brief overview of the purpose of the case, the main conclusions, and the final decision recommendation. A. Problem situation What problem do you try to solve and what is the proposed solution? Describe the project, the reasons for this investment, and the major issues that need to be addressed. B. Differential advantage: how does the proposed solution create value? A. How does the proposed solution create value for the firm? Identify and discuss sources of value and risk B. How does the proposed solution create value to the customers? Identify and discuss sources of value and risk C. How does the proposed solution differentiate from competing products? Identify and discuss sources of value and risk Note: At a minimum include issues related to brand value and cannibalization. C. Financial feasibility analysis List all major assumptions (they should relate to your analyses in sections A and B) for your “most likely” scenario. Describe the cash outflows and inflows associated with the proposed solution. a. Perform a break-even analysis How much does the firm need to sell in order to break-even? Is it feasible to break-even within the desired time frame? b. Construct a cash flow diagram The cash flow diagram should contain all the costs (split them out) and the expected revenues/contribution. Include net cash flow, cumulative net cash flow, and present values (see cash flow table example). Note: make sure to include the potential...
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...Mountain Man Brewery is experiencing declining sales for the first time in the company’s history 1) Age Demographics • Mountain Man’s beer drinker’s Proof Central East Region Market Size overall Market Size MM Competes in MM share (Barrels) Profit $ 2004 38,678,720 4,718,618 2005 37,191,077 4,648,885 2006E 35,703,434 4,462,929 are getting older and decreasing their frequency of purchases • As Mountain Man’s beer drinker’s are aging the children of a Mountain Man drinker are not choosing Mountain Man beer as their primary choice 530,400 $4,887,636 520,000 $4,791,800 509,600 $4,695,964 2) Increased presence of large multi-national brands in Mountain Man’s distribution area (Case Fact) • Distributors supporting beer brands on basis of turnover and margins; dropping brands that do not contribute to bottom line • Large brands maintain economies of scale in brewing, transportation and marketing; Increased pressure 3) Distributors not willing to help build Mountain Man brand awareness • Mountain Man is not a popular customer to distributors because of small market share presents • Small shipments of under 600,000 barrels annually. Mountain Man provides a high quality beer that hard working men enjoy Loyal – Hard Working - Deserving A Mountain Man beer drinker • Blue Collar • Middle to low income men over age 45 • Purchase beer at off premise location (liquor stores) • Working man (trades) (large population of workers) • Since 1925 Oscar has...
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...Situation The popularity of light beer among young people was increasing. Mountain Man Brewing Company was considering whether to launch Mountain Man Light to attract more sales. Problem Mountain Man had a 2% decline in revenue each year while light beer was much more demanding. However, launching a new product was costly. Also, if they launch the new product, they don’t know if it should be under the Mountain Man brand name or using some other names. In all, it’s difficult to predict that if the new product is profitable. Analysis The light beer consumption was 50.4% of the total barrels in 2005 with a 4% 6-yr CAGR, which means the market size would be 22.8 million in 2010. The main consumer of light beer spent aged from 21-27, although they represented only 13% of the U.S adult population, they accounted for more than 27% of total beer consumption. And these numbers were still growing. It would be a huge opportunity to launch Mountain Man light beer and take up some market shares. However, there was another question: should this light beer product be introduced under Mountain Man brand name, or by a different name? If the new product was under Mountain Man, the established company image could help reduce advertising cost, but downside is that it might alienate existing customers and erode brand equity. If the product was introduced by some other names, there would be neither brand dilution nor cannibalization, but the company would have to invest more on advertising and...
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...Mountain Man Brewing Company Case Report Company Overview Mountain Man Beer Company (MMBC) is a family-owned brewing company that is the maker of Mountain Man Lager, or “West Virginia’s beer.” Mountain Man Lager is known for its reputation as a quality beer and is targeted throughout the east central region of the United States. Mountain Man Beer Company is in the second-tier beer industry, and known for its distinctively bitter flavor and slightly high alcohol content. MMBC’s competitive advantage is its brand equity, and value placed on its product. With brand playing a crucial role in the beer-purchasing decision, MMBC has had great success with its brand standing out as a traditional beer with a loyal customer segment, of middle to lower income men over the age 45. Primary Problem The primary problem for Mountain Man Beer Company is if they launch the new product, Mountain Man Lager Light, will they lose their main customer base. Changes in beer drinkers’ preferences have left the company with declining sales for the first time in the company’s history. A strategic plan in response to the declining sales is to launch a new light beer in hope of attracting younger drinkers to the brand. Light beers are growing at an annual rate of 4%, while traditional premium beers have been declining annually. With younger beer drinkers, 21-27 years of age being the main target for light beer, and making up over 27% of total beer consumption, MMBC is considering launching a light beer...
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...Mountain Man Brewing Company was established as a family concern in 1925 in West Virginia by Guntar Prangle. The company brewed single-product beer, Mountain Man Lager, which won “best beer in West Virginia” and was elected as “America’s Championship Lager”. Mountain Man Lager featured quality, bitter favor and slightly higher-than-average alcohol content that uniquely contributed to the company’s brand equity. Mountain Man was a local market leader and distributed its lager in several states outside West Virginia. By 2005 Mountain Man was generating over $50 million in revenue with over 520,000 barrels of Mountain Man Lager sold. However, Mountain Man had been facing serious challenges. Its revenue was encountering a 2% yearly decrease in 2005 as it faced fierce competition. Light beer was sweeping the beer market and gained 50.4% of volume sales in market share in 2005. Thus, the objective of Mountain Man in this case study is to increase sales revenue by moving into the light beer market. Chris Prangel, son of the company’s owner, hoped to achieve three goals in his marketing campaign: 1.) To produce a light beer in the hope of attracting younger drinkers to the brand; 2.) To sustain the core brand equity of Mountain Man Lager; 3.) To maintain a steady share of its market segment by regaining the 2% annual loss. Mountain Man’s revenue was declining as it faced new products, which threatened to steal its customer base. However, Mountain Man met difficulties to make changes...
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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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...5. Mountain Man Brewing Company identifies itself as a family-owned brewery steeped in the heritage. It prides itself on producing high quality beer that embodies the unique “toughness” culture of West Virginia. Mountain Man brand represents all blue-collar workers across the United States. It symbolizes concepts like honesty, virtue, and hard work. These were the characteristics that enabled the company to hold the top market position among lagers in West Virginia for the past 50 years. The majority of Mountain Man Brewing Company consumers are male, above the age of 45 and typically in the middle-to-lower income brackets. Some small portion of their customers tended to be exceptionally loyal to the Mountain Man brand. This group accounts for a large percentage of company’s sales. Company’s main target market consists of West Virginia and other Eastern regional areas. Furthermore, the main buying location of the target market is off-premise. Despite the high perceived brand image and loyalty, the company experienced a decline in revenue of 2% in 2005. This decline is due to changes in consumers’ drinking preferences, markets, and demographics in the East Central Region, as well as the U.S. in general. Changes in beer drinkers’ preferences could be attributed to increased competition from wine and spirits, health concerns, and new public initiatives advocating moderation of alcohol consumption. As a result, consumers, specially the younger generation have acquired taste for...
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