Mountain Man Brewing Company Essay Example

most genuine regional beer for working class East Central Americans among all premium domestic beers. This is because of its unique quality, bitter taste, slightly higher alcohol content than average, and competitive price (Abelli, 2007, pp.2-3). This positioning statement helps MMBC in focusing their product towards blue collar workers in the East Central region. Although not explicitly mentioned in the case, I believe that Mountain Man Lager fulfills the following needs of this target audience: the need for toughness, pride in a high-quality East Central product, and affordability.

MMBC's triumph in the competitive premium beer market, despite the closure of other local breweries, can be credited to its strategic targeting of the intended audience. This achievement stems from various factors including a devoted customer base, robust brand awareness and support, as well as a top-notch product. As per Abelli (2007), Mountain Man Lager boasts a 53% brand loyalty rate, surpassing rivals like Budweiser (42%) and Bud Light (36%). Furthermore, the case study demonstrates that the Mountain Man brand enjoys similar recognition levels as Chevrolet and John Deere among working-class males in the East Central region (Abelli, 2007).

Mountain Man Lager stands out from its competitors due to its distinct flavor and slightly higher alcohol content, which define its quality (Abelli, 2007, p. ). Aside from its taste, the beer is easily recognizable as West Virginia's own. Additional unique features that set the brand apart include being an independent, family-owned business, using an authentic old family brew recipe from West Virginia, and maintaining high quality standards such as a distinctive bitter flavor balanced with a slightly higher alcohol content. Moreover, Mountain Man Lager effectively boosted its sales through

an in-house sales force at off-premise locations and by implementing grassroots marketing strategies. The brand also built strong relationships with retailers in the East Central Region (Abelli, 2007, pp. -7).

Despite experiencing a 2% decline in revenue in 2005, MMBC was able to successfully compete with major domestic premium brands like Miller and Budweiser, as well as second-tier domestic producers. This success can be attributed to factors such as serving a large enough market and other breweries going out of business in Virginia (Abelli, 2007, pp. 2-4).

The decrease in beer consumption, both regionally and nationally, can be attributed to changes in drinking patterns, markets, and demographics. The overall decline in beer intake in 2005 was influenced by increased competition from wine and spirits, along with new health recommendations advocating for reduced alcohol consumption for better well-being (Abelli, 2007, p.4). While premium beer consumption declined by 4%, there was a corresponding 4% increase in the consumption of light beer (Abelli, 2007, p.10). This change in consumer purchasing behavior presents an opportunity to introduce a light beer product.

Overall beer consumption declined in the U. S., including in MMBC's region. The graph, Figure 1, displays the beer consumption in West Virginia, MMBC's home state. The data source is Abelli, 2007, p. 9.

Both consumption in the West Central Region and consumption in the East Central Region follow the same curve as total U. S. consumption.

The curve presented by Alvin Silk (2006, p. 06) that represents the maturity stage of the product life cycle is similar to this curve. This similarity is logical because according to the case, "Mountain Man Lager was a legacy brew in a mature market" (Abelli, 2007,

p. 2).

During the decline phase of the product life cycle, sales and profitability both decrease. Silk emphasizes that during this stage, companies try to reduce expenses and "milk the brand" (2006, p. 106). Additionally, there was a rise in competition from imports and craft beers, which were growing at rates of 6% and 9% respectively (Abelli, 2007, p. 0).

Retail stores were offering discounted beer and big national brewers were spending more money to maintain their sales (Abelli, 2007, p.4). Chris should argue for the launch of a light beer product, but the name Mountain Man Light might not be suitable. Launching a light product could provide financial benefits to offset the projected decline of 2% per year for Mountain Man Lager. According to Figure 2, it is assumed that a light beer product would capture 0.25% of the light beer market, starting in the middle of 2006.

Some essential variables would need to be managed for this to occur. This model assumes that a portion of the Salaries, General, and Administrative (SG&A) funds from the larger product would be transferred to the light product. The SG&A cost would increase in 2006, but achieving a goal to decrease this fixed expense would be necessary. As mentioned in the case, whether a light product could effectively attract a new target audience is a significant consideration for MMBC. The light beer would be formulated to cater to the taste preferences of the younger generation, particularly those who haven't yet developed loyalty to a specific beer brand. The objective would be to attain the same brand loyalty for the light product that MMBC has achieved with its lager product. To

accomplish this, a new positioning statement would need to be created, along with a distinct approach to targeting customers.

I believe MMBC could leverage the quality and independent brewery status of the Mountain Man brand. However, they would need to overcome the perception that Mountain Man is a strong flavored beer for the working class, which poses a challenge. If the target market shifts to the backyard BBQ, "techie", "yuppie" crowd (as hinted in the case), it could undermine the tough image that has been crucial for Mountain Man Lager's appeal to the working class. In my opinion, a better market would be the young, adventurous backpackers and kayakers who would appreciate a high-quality light product that aligns with their desired image.

Even with the introduction of the light product, the financial forecasts indicate that net income will be affected as the decline in the lager market persists, unless MMBC can secure a 0.25% share of the light beer market. To sustain growth in this fiercely competitive market, Chris must consider alternative approaches. An option worth considering is to examine strategies for cost control in the Lager business.

Cost control will be crucial as the market declines. I have fixed SG&A costs at 2007 for the larger business, but incorporating operational systems may improve MMBC's future. MMBC could also consider competing in the smaller craft beer market instead of directly competing with major premium light beers like Bud Light and Coors Light. By producing beers that appeal to those transitioning to lighter beers while appreciating the quality that smaller brewers offer, MMBC can thrive. For instance, instead of Mountain Man Light, they could create products like Mountain Man

Pale Ale or Mountain Man Porter.

I believe these types of products would tap into the quality that Mountain Man Lager is known for and seem like a better fit with the Brand Mountain Man is famous for. This would also open up opportunities to extend the brand into brew pub restaurants, which have become very popular in recent years. I think that Mountain Man's unique distinctive history and brand recognition could be used to create a memorable restaurant experience. The main point of this argument is that MMBC should continue to explore opportunities to improve profit. In a mature market, I believe the worst thing MMBC could do is to settle for the "status quo".

References

1. Abelli, H.(2007)
2. Mountain Man Brewing Company: Bringing the brand to light. (2069)
3. Boston, MA: Harvard Business School Publishing. Silk, A. J.(2006)
4. What is Marketing? Boston, MA: Harvard Business School Publishing.