Mountain Man Brewing Company Case Study Analysis

CASE STUDY ANALYSIS OF Mountain Man Brewing Company : Bringing The Brand To Light

Key Personalities Chris Prangel - MBA Graduate  Oscar Prangel – Retired Owner and President of MMBC  Guntar Prangel – Founder of MMBC  John Fader, VP Sales 

Case Facts  Mountain

Man Beer Company founded in 1925 by Guntar Prangel  Chris Prangel , an MBA graduate wanted to inherit his father`s business.  Mountain Man brewed one beer called Mountain Man Lager  Also known as West Virginia`s beer  Chris wanted to launch Mountain Man Light among the youngsters

 For

the past 6 years beer sales in US had been growing at a compound annual rate of 4%  Also had decrease of traditional premium beer sales with same percentage  The reputation quality beer was well entrenched throughout the East Central region of United States  By 2005, Mountain Man generated revenue over $50million and selling over 520,000barrels² of Mountain Man Lager.  Held in top market position in West Virginia among Lagers

 Price

$2.25 for a 12-ounce serving of draft beer

in bar  $4.99 for a 6-pack in a local convenience store  Unaided response rate of 67% from State`s adult population  In 2005, MML won “ Best Beer in West Virginia “ for its 8th year straight  Also won “ Best Beer in Indiana”  Selected as “ America`s Championship Lager “ at American Beer Championship  MM sold 70% of its beer for off – premise consumption

SWOT Analysis Strength 1. 2. 3. 4. 

1. 2.

: Market leader and well established brand name Strong brand equity Best range of Attributes Promotion Strategy & Customers Weakness :  Improper utilization of funds in advertising Lack of financial resources to compete in the light beer advertising market

Opportunities 1. 2.  1.

2. 3.

: Reach out to younger demographic Increase lifetime customer value Threats: Risk of canalization of core brand Alienation of core customer through new brand Dilutes Brand equity

Leading Questions How brand awareness campaign can be carried out ?  Is the promotion strategy for Mountain Man Lager & Mountain Man Light the same ?  Whether the MMBC should launch the new brand in the market ?  What are methods adopted by MMBC to improve their sales in future ?  Does the new brand affect the sales of existing brand i.e Mountain Man Lager ? 

Major Issues & Analysis Pressure on regional breweries  Mountain Man`s revenue declined in 2005 by 2%  Challenging company`s ability to remain profitable  Struggling to maintain steady share of its market segment against large domestic brewers  Impact of Mountain Man Light on sales of Mountain Man Lager 

Financial projections showed regional revenue growth of the light beer product @ 4% annually  Mountain Man steadily growing its share of the regional light beer market by a quarter of a percent each year off of a 2006 base market share of 0.25% 

Solutions Launch Mountain Man Light via brand extension.  Launch new product using 4p`s of marketing mix i.e Product, Price, Place Promotion.  Advertising the new beer brand through Online Media and Social Networking Sites  Providing offer in prices for Mountain Man Light if bought in high quantity  Easy to convince retailers to stock & promote  Labeling and packaging efficiency 

Promotional material to cover all partner retailers  Permission marketing getting customer involved in the brand and connecting other customers  Advertise in spot radio, outdoor and social networks  Need to capture on-premise locations like bar, pub which are frequented by younger target market  Multi-brand distribution system should be followed 

Situation Analysis of Customer

:The beer industry in US generates $ 75 Billion in annual sales.  Customers base their choice on taste, price, occasion, perceived quality, brand image, tradition, local and authenticity  Eastern Central Region represents $13 billion in annual sales out of $75billion.  Mountain Man counts with 81% male drinkers, thus neglects Female market segment  Female market segment which represents 32% of the TAM of domestic premium beer. 

Focus on a target market: blue-collar male workers.  While their target customer brings them the focus and loyalty needed to build brand awareness and equity,  MML not taking consideration of other market segments such as the white-collar class and other potential niches  64% of Mountain Man drinkers are 45+ years old while the TAM for that age category represents 49% of the domestic premium beer market in the Eastern Central 

Competition : Competitors for Mountain Man are Anheuser Bush, Miller brewing Co. and Adolf Coors possessing 74% market share of the overall brewing market.  These three companies have 84% market share in the light beer market.  They rely heavily on broadcasting market as well product diversification to create barriers of entry for other brands 

Company :Revenues of over $ 50 Million, MMBC Founded in 1925 by Guntar Prangel who established itself as a premium domestic quality beer,  Known for its flavor and bitter taste.  With time Mountain Man Lager became the beer of pride in the Eastern Central region of the United States.  Oscar Pragnel retired president and owner and the business stayed focused on maintaining the quality and serving a specific market niche building brand equity among blue-collar, middle-income and below workers.  

Collaborators Off-premise locations, such as liquor stores and super markets, is Mountain Man main sales channel as it sells 70% of its production at these locations.  The main reason for this result is that 60% of blue-collar workers buy their beer through the off premise locations. 

MARKETING MIX ANALYSIS  1. 2. 3. 4.

5.

Product: MMBC will stand out as compared to competitors in the light beer market . Label should portray a fresh and young image since the target segment is young adults. Use of bold and vibrant colors to attract attention of the customers The bottle should use a lighter shade such as light green to differentiate from the dark brown bottles of Mountain Man lager. The light green used also indicated a lower alcohol content of a new brand extension.



Promotion :

1.

Promotion Bar mats to be distributed to bars and retail outlets carrying light brew and Mountain Man lager.

 1.

2.

Place : Product line extensions actually helped brewers obtain greater shelf space for products and created greater product focus among distributors and retailers There is a need to increase distribution among bars which is only 30% of current sales. Need to target locations that are frequent by the young adults.



Price:

1.

Observe competitors pricing strategy and carry out market research to determine the optimal pricing. It is important to price Mountain light brew not too low in order to break even quickly and not to price it too high for fear of low sales.

2.

References :   

http://www.scribd.com/doc/49132085/MountainMan-Brewing-Company Principles of Marketing, 13 Edition, Philip Kotler www.authorstream.com http://www.scribd.com/doc/49132085/MountainMan-Brewing-Company

Presented By Group 3 :