Mountain Man Brewing Company: Bringing the Brand to Light
Submitted By: Mohana Goel [12DM077] Mohit Bhola [12DM078] Nidhi Dalal [12DM090] Nishant Raj [12DM097] Nishtha Chugh [12DM098] [12DM098] Piyush Chib [12DM102]
Abstract Guntar Prangel founded the Mountain Man Beer Company (MMBC) in 1925. By the 1960s, Mountain Man Lager’s reputation as a quality beer was well entrenched throughout the East Central region of the United States. Mountain Man Lager was a legacy brew in a mature business. By 2005 Mountain Man was generating revenues just over $50 million and selling over 520,000 barrels of Mountain Man Lager beer primarily to distributors in Illinois, Indiana, Michigan, Ohio, and its native West Virginia. Mountain Man Lager was priced similarly to premium domestic brands such as Miller and Budweiser and below specialty brands such as Sam Adams. Its price was typically $2.25 for a 12-ounce serving of draft beer in a bar and $4.99 for a six pack in a local convenience store. MMBC relied on its history and its status as an independent, family owned brewery to create an aura of authenticity and to position the beer with its core drinkers — blue collar, middle-to-lower income men over age 45.In 2006 Oscar Prangel was the president and owner of MMBC and after 5 years Chris Prangel will take over the business.
Objective The key objectives of the case study are: To understand how MMBC positioned its Mountain Man Lager among stiff competition in the market. To analyse how it maintains its market share To suggest whether the company should go ahead with the launch of Mountain Man Light, a lighter version of the core lager beer.
Conclusion The launch of a new product is always going to be a risk, but banking on the withering demand for a single offering is surely not going to alter the fortunes of the Mountain Man Beer Company. Light beer is the largest sales opportunity for a reason; it is what the market demands. Light beer is the gateway necessary to attract new consumers, and a stepping stone to introduce them to Mountain Man Lager. Where the product association with Mountain Man Lager may be too strong in terms of flavour, directly attracting affluent light beer drinkers can broaden the identity of Mountain Man Beer Company as a quality brewer within their region.
Answers to the Case Questions:
1. (a) What is Chris considering doing and what factors will he have to align to be successful?
Chris Prangel is considering on product diversification and is assessing on launching Mountain Man Light, a “light beer” formulation of Mountain Man Lager, the company’s primary product, in the hope of attracting young drinkers and entering into the Light Beer segment Factors to be considered for the same are: Assess ways to cater to declining sales revenue of Mountain Man Lager Launching of Mountain Man Light as a brand extension. Minimize brand overlap and at the same time any brand equity damage. Avoid overshadowing of the core product by the newly introduced product. (b) What goals should MMBC (Chris) have?
Chris should present a new detailed Marketing Plan to launch ‘Mountain Man Light’ using the brand value chain marketing programme where the introduction of a new product will help in the upliftment of the core product i.e. Lager Beer. 2. What has made MMBC successful? What distinguishes it from competitors? . MMBC is different from its competitors because of its history, its status as an independent, non-corporate and family owned regional based brewery giving it the originality desired by its customers. (a) What is distinctive about MMBC’s product?
There were ranges of subjective attributes that defined the quality of Mountain Man, like its smoothness, percentage of water con tent, and “drinkability”— but it was Mountain Man Lager’s distinctively bitter flavour and slightly higher than-average alcohol content that uniquely contributed to the company’s brand equity. (b) What is distinctive about MBBC’s customers?
MMBC’s customers for its core product are primarily the blue-collar consumers, middle to lower income men over age 45. It was a recognised brand among working class males in the East Central Region of U.S. The customers were very loyal towards this brand, they were quite happy with the taste of Mountain Man Lager and were objectionable to the fact that changes should be done with the present brand.
(c) How is MMBC’s promotion different and effective?
Traditional Advertising was not to promote its product, instead the company focussed on grassroots marketing as a means of advertising its brand. The brand focussed on local marketing activities, thus making the brand more personable to the consumer. 3. What about these factors enabled MMBC to create such a strong brand?
Factors that have enabled MMBC to create a strong brand are taste, quality, image, tradition and authenticity. MMBC has a high brand loyalty rate of 53% in comparison to their competitors who have a lower brand loyalty rate. It has also distinguished itself from competitors by Mountain Man Lager being produced and distributed by an in-house marketing team in West Virginia. (a) What is a brand? What is brand equity? How is it created?
A brand is a name, term, design or symbol or any of the features that identifies one seller’s good or service as distinct from those of other sellers. Brand Equity describes the value of having a well-known brand name based on the idea that the owner of the brand can generate more money from the product with that brand name than from products with a less-known name. Brand Equity is created through strategic investments in communication channels in market education. 4. What has caused MMBC’s decline in spite of its strong brand?
Reasons for decline:
They never made any changes in the product line. Young beer drinkers perceived the beer as strong and a working man’s beer. Ageing demographic and shrinking premium segment of the beer market. Light beer category- 50.4% of sales volume in 2005, and 29.8% of sales volume in 2001. Change in taste and preferences of the consumers.
(a) Describe the market MMBC serves and the beer market in general.
The competition in the U.S. beer market fall into four categories: Major and secondtier domestic producers, import beer companies, and specialty brewers. The craft beer industry was divided into four markets: brewpubs, microbreweries, contract breweries, and regional craft breweries. MMBC serves the lager beer market as a major domestic producer. (b) Describe the competition and MBC’s threats.
MMBC competes with Anheuser Busch, Miller Brewing Company, and Adolf Coors
Company in its market. Together, these companies accounted for 74% of 2005 beer shipments in Mountain Man’s region. Its threats are the changing pref erences of consumers, emerging new brands and introducing a new product while maintaining the originality of its core product. (c) What is the likely future of competitive brewers? What is MMBC’S market/competitive position?
Most industry observers agree that the key consumer segment for beer companies are young drinkers, 21 – 27 years of age. This group represents the “first-time drinker demographic” that has not yet established loyalty to any particular brand of beer. MMBC’s market position is good as compared to its competitors as it has served a large market with a very strong brand, and it therefore could continue to compete against national players with deep pockets such as Anheuser Busch, the company’s most significant competitor. Facing an aging demographic in the shrinking premium segment of the beer market, the company struggled to maintain a steady share of its market segment against the large domestic brewers, which were spending heavily to maintain their own sales levels in the premium segment. 5. Should MMBC introduce a light beer?
Yes, MMBC should introduce light beer because entering new markets will lead to stronger relationships with distributors and hence increased sales. Its need of the hour as we can see four percent compound growth in this new segment and on the same time decline in lager consumption. (a) What are the pros and cons of doing so? Advantages:
Light beer was newer and faster growing product category Others competitors having product in this segment Mountain man's sales were declining due to other light beer brands. Appealed to young drinkers and women.
Disadvantages:
Product cannibalization Brand erosion Product may not be perceived well
6. Is Mountain Man Light feasible for MMBC?
Yes, MMBC should introduce light beer because entering new markets will lead to stronger relationships with distributors and hence increased sales. Its need of the hour
as we can see four percent compound growth in this new segment and on the same time decline in lager consumption. Existing Mountain Man customers do not want a change while young generation wouldn’t mind a lighter version. 7. Should MMBC launch Mountain Man Light?
MMBC should launch Mountain Man Light because brand extension is necessary for its growth. Light beer appeals to younger drinkers overall and to female, it accounts for 42% which is an appreciable figure. Launching light beer would not harm Lager image because its target segment is completely different. In the short term, it doesn’t require major capital expenditure and equipments. (a) What other strategic options for growth?
Promotions in West Virginia Promotional offers at Corporate Parties and get-togethers. Going with a different or slightly modified name or going with a private labelling can be a good option in this case when you don’t want to put your present in ultimate risk Introduction of Light Beer at bars and restaurants. Launching it at untapped markets where majority of population is youth. Linking the brands with national and local teams, providing sponsorships for the team. Promoting the brand among beer and liquor stores by getting a significant shelf space.
