Mountain Man Brewing Co.

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Case 2: Mountain Man Brewing Company

Prepared for:Marketing 181

Question 1:

There are many factors that have enabled MMBC to create a strong brand. These include: taste, perceived quality, image, tradition, and authenticity. Taste is achieved through a selection of rare Bavarian hops and unusual strains of barley creating a defined Mountain Man quality.

In addition, Mountain Man Lagers’ distinctively bitter flavor and higher alcohol content sets this beer apart from its competitors, which uniquely contributes to the company’s brand equity. To complement the richer stronger taste, a dark colored bottle is used to enhance perceived taste and quality. The 1925 original design of coal miners imprinted on the front promotes tradition, regional loyalty, and authenticity. By association the picture links the blue-collar worker to the image; therefore MMBC is able to target consumers of age 35+.

Mountain Man Brewing Company is able to distinguish its beer apart from its competitors mainly through its high-perceived quality and brand image strongly appealing to West Virginia population where Mountain Man Lager is also known as “West Virginia Beer. ” In addition, MMBC has a high brand loyalty rate of 53% in comparison to their competitors who have a lower brand loyalty rate (i. e. Bud Light 36%, Budweiser 42%). Thus, the Mountain Man Lager has the brand loyalty advantage over its competitors.

MMBC is also able to distinguish itself from competitors by Mountain Man Lager being produced and distributed by an in-house small marketing team in West Virginia. Consumers in the region have close brand ties in comparison to larger breweries that do not have distributers acting as direct promoters of brand. Even though MMBC has a strong brand name many things have caused its decline. The key qualities that have built a strong brand exclude drinking populations who cannot associate themselves with such a distinct image.

The company’s most loyal customers belong to part of an aging population thus producing a shrinking market in the Mountain Man Lager. Therefore, they are unable to capture the younger growing market (21-24 segment), which has a greater interest in drinking light beer. The main reason for MMBC’s decline is due to a dwindling market size or a shift in consumer preference towards a lighter beer despite its strong brand name.

By not establishing a strong presence in the 21-24, 1st drinker segment, MMBC will lose potential buys as customers deviate away from their brand towards competitors. The Mountain Man Lager is only capturing 2% of 1st time drinker demographic while its competitors, domestic light and domestic premium, have a 6-7% advantage over this market. Also, in West Virginia the market has become competitive. Retail stores are strongly discriminating against smaller brands making hard for the Mountain Man Lager to attain shelf space.

Question 2:

The pro’s and con’s of introducing a light beer are as follows: Pro’s | Con’s | Appeal to younger demographic, including women | Could lose sight of core consumer| Would extend product line | Would potentially lose market share to blue collar, loyal customers | Gain more share of “on-premise” locations | More expensive to launch new product: costs $4. 69 more per barrel | Would give MMBC more shelf space| Big risk involved: potential to hurt brand image if quality doesn’t meet the standards of the original Mountain Man Lager. Potential growth of light beer product at 4% annually| It would be hard for MMBC to introduce a light beer within such a competitive market; will never achieve the volume of larger light beer brands like Miller & Coors Light could| Create more competition in the beer industry | Large advertising expenditure necessary for visibility and currently MMBC only uses grassroots marketing| Continue with family legacy: We would market this as “light beer being the stepping stone to the manly man lager” | For MMBC to produce profit it is a projected 2 year time, which still means continued declining sales currently |

Based on our assessment of the pro and cons, we came to the conclusion that we should not introduce a Mountain Man Light beer for various reasons. Our first reason for not introducing the light beer is because it goes against the company culture. Many members of upper management do not support Chris’s decision to launch a light beer, creating disjointed opinions and feelings that will reduce output or the willingness to create a shared goal. For nstance, John Fader, the Vice President of sales feels that the light beer will take away time, resources, and attention from their Lager. In order to produce a new product, the whole company must think in a like-minded manner. Chris’s decision is based on optimistic assumptions instead of facts. If he implements his decision MMBC may alienate its most loyal customers, which would destroy its 53% brand loyalty. Brand equity is increasingly important so destroying it would make MMBC less competitive. Also, MMBC’s authenticity comes from its Lager product.

Therefore by altering the product to appeal to a more general audience it would diminish the created authenticity. It is apparent from Exhibit 6B, consumers prefer mainstream light beer brands such as Bud Light, Miller Light, Coors Light. Thus, MMBC (as a non mainstream brand) would have difficulty penetrating this market. In addition, we feel the company structure and product nature doesn’t support light beer production because it deviates away from the Mountain Man Lager’s unique characteristics such as the key factors of the brand (refer to question 1). Most importantly if MMBC did launch a new product it would create increased costs (from advertising), higher costs of production, and would lead to lower margins.

Question 3:

Positives and Negatives Associated with launching Mountain Man Light with the Mountain Man brand name: Positives| Negatives| Increases first time drinker demographic| Decrease already established image of Mountain Man Lager| High sales boost beer brand. New product may create increased future sales. | Distributors more willing to give shelf space to well known brands.

If introduce light beer they will lose already made progress in relation to shelf space| Casual drinkers are more prone to drinking a well-known brand names (convenient shoppers)| Re-hire new sales team for new product| Loyal customer base| If the light beer brand was to fail it would hurt image of the company as a whole| | Bad taste of light beer causes consumers to think Lager will be the same. | | |

Question 4:

Other strategic growth options for MMC if MML is unsuccessful

If the Mountain Man Light is not launched or unsuccessful there are many other strategic growth options for MMBC to implement. For instance, MMBC could introduce the light beer to test markets such as at football games and other sponsored events in hopes to attract a younger drinking population. If the product fails it is also important for MMBC to re-market MM beer to smaller and more loyal retailers, which would potentially increase income. Also, the already established small sales team should expand its sales force to other geographical areas to widen the awareness of MMBC’s products.

MMBC could find a distributor committed to building brand equity for a larger market such as small family businesses. A specific way in which MMBC can re-market the original lager would be to focus more on lifestyle branding building relationships to grow the 21-24 demographic by establishing a tradition between father and son. We would market this as a beer that appeals to all generations (see picture in exhibit pages). If all else fails and MMBC does not produce a light beer or re-market its current Lager then we suggest merging or selling out.

Exhibit Pages MM MM MM Should Mountain Man Enter the Light Beer Market? From this diagram we conclude that the light beer market is saturated by larger dominant brands that would restrict Mountain Man Brewery from successfully launching and entering the light beer market. The data represented is taken from the Exhibit 6 and supplemental information in the case study. Pabst Miller Anheuser-Busch Coors Corona Heineken Mountain Man Brewery Low Brand Equity High Brand Equity Low Market Share High Market Share

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