...Mountain Man Brewing Company Case Analaysis Recommendation: Mountain Man Brewing should create a new market strategy and introduce a line extension of Light Beer to expand their portfolio and create new sales among non-existing customers. This line extension will target the younger drinkers and women in the East Central Region and will increase sales and create profit within 2 years. Rationale: 1. Light beer sales will be profitable within 2 years. The first year MMBC will lose $486,374. However, in 2007, the second year, MMBC will gain $1,520,341 in profit. See Appendices 6 and 7. 2. Currently, MMBC can afford the line extension. If MMBC were to wait a few years, there might not be any profit to pay for a line extension. 3. Light beer sales are growing at a 4% CAGR. In 2001, light beer accounted for 29.8% of beer sales. In 2005, light beer now accounts for 50.4% of beer sales. See Appendix 3. 4. Women are included in the target market for Light Beer making up 42% of sales. In the East Central Region, women consume 21% of the barrels sold and 27% of the Light Beer Barrels sold. See Appendix 9. 5. The young drinkers (age 21-27) consist of 13% of the population and 27% of beer sales. This age group mainly consumes light beer and has not established any brand loyalty. Ages 21-35 also consume 20% of the barrels sold in the East Central Region. See Appendix 9. 6. MMBC sales are declining by 2% annually. Introducing a light beer would increase revenue...
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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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...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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...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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...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 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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...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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...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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...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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...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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...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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...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 something else. Net revenue for the company was $50,440,000...
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...Mountain Man Brewing Company! ! Case Study! ! ! Group Eleven ! Olusegun 9286 | Saranya 9290 | Omolola 9734 | Janet 10033 | Joseph 8605 ! SITUATIONAL ANALYSIS AND RECOMMENDATION Situational Analysis Mountain Man Beer Company (MMBC) has been a huge Success, and for the first time, the company is experiencing decline sales. It was discovered that Drinker’s preferences and taste change to light beers, and the company needs to take on a different approach to spark the sales. Most especially in the customer segment of the younger drinkers, and they were identified as the key customer segment, aged 21-27, and accounted for more than 27% of the total beer consumption. 42% of the light drinker’s were also woman. These particular customer segments are getting their preferences from other competitors of Mountain Man beer Company, which lead to the 4% decrease in the sales of Mountain Man Beer. Faced with the Prangel legacy and inheritance of the company, Chris Prangel, thinks that launching a light beer will attract a younger market segment. Others on the MMBC management team currently challenge this because they think that a light beer may stray away from the current brand strategy. The MMBC management team also feels that launching a light beer would be very expensive and could hurt Mountain Man’s key customer base and brand equity created through a grass roots and word-of-mouth marketing mix. ! Analysis of Threats and opportunities If Chris...
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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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...“Marketing…is the whole business seen from the point of view of its final result, that is, from the customer’s point of view. Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise.” - Peter F. Drucker, People and Performance, 1977 Required Textbook • Managing Marketing in the 21st Century: Developing and Implementing the Market Strategy, 3rd ed., by Noel Capon (www.axcesscapon.com, 2012). Available through www.axcesscapon.com (as a PDF file or in paperback), as well as Amazon.com or BN.com in either paperback or electronic format and in paperback through the University Bookstore. Required Cases • Harvard Business School Cases: listed in course outline. Cases are available for purchase online through Harvard Business School Press (Coursepack Link for purchasing cases listed below with list of cases). Introduction and Overview In their never-ending search for the ultimate secret to business success, many businesses continue to overlook the most fundamental premise of all business. While their search for the ultimate “secret to success” has provided some interesting and useful concepts and theories, the ultimate secret to business success is not as secret or complex as some would have us believe. Success in business comes from creating satisfied customers. This is, or should be, the essence of all marketing activities. Yet each day, we personally encounter—or the press brings news of—CEOs...
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