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 past years. Hence, even though the MMBC was still profitable, the management team was eager to develop an appropriate and executable strategy that could boost sales and secure the company’s future. Chris Prangel, who would inherit this company in five years, proposed to add light beer to the old brand and hoped this new product attract more younger drinkers. However, this proposal was questioned by most members in the management team, including his father, Oscar Prangel, the current owner of the company.