mountain man brewing company: bringing the brand to light
Post on 15-Jan-2017
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MOUNTAIN MAN BREWING COMPANY (MMBC)
A BRIEF HBS CASE STUDY
CHRIS PRANGEL MANAGER (Recent MBA graduate)
OSCAR PRANGEL PRESIDENT AND OWNER
GUNTAR PRANGEL
FOUNDER (1925)
WHAT IS MMBC-Mountain Man Lager?•West Virginia’s Best Beer•Premium Market Leader for almost 50
years•Blue-Collared Consumer’s Favorite Drink•Legacy Brew-Family owned Business
Current SituationHIGH BRAND EQUITY IN PREMUIM SEGMENT
SOLD AT OFF-PREMISE LOCATION
2% DECLINE IN REVENUE
GROWTH IN LIGHT BEER SEGMENT DUE TO YOUTH PREFERENCES
COMPETITIVE MARKET SHARES
Anheuser Bush, Miller Coors and Adolf Coors possess 74% of the market share in the overall brewing of United States
These Companies have 84% share in
the Light Beer Market
These companies do product
diversification and create entry
barriers for other brands to come in the same market
BEER DRINKERS-PROFILE
CONSUMPTION
Market Research•Mountain Man Lager Attributes –
Authenticity, Superior Quality, Toughness etc.
•Awareness amongst people but they considered as a beer for the blue collared
•53% loyalty of Blue Collared Customers towards the brand
OBJECTIVES•Whether to come in Light Beer Market or
not?•If enter Light Beer Market, How to
capture it?•Effect on the core value of Brand , if
entered the Light Market•Investment and Returns on the new Light
Brand
2 OptionsA) Introduce Light Beer under Mountain Man
Brand Name
B) Introduce Light Beer under a different Brand Name
A) Introduce Light Beer under Mountain Man Brand Name
ADVANTAGES DISADVANTAGES
Low advertisement costs Reduction in sales volume and revenue of the core product
Increase in revenue Loss of Blue Collared Core Customers
Come into Light Market Brand might erode like “Schlitz”
B) Introduce Light Beer under a different Brand Name
ADVANTAGES DISADVANTAGES
Mountain Man Lager will not get diluted and remain intact
High advertising costs
Increase in Revenue and Market Share
Difficult to build new brand name when branded Light beer is
already in market
RISKS•New product could get lost•New product could damage the market
share and positive customer based brand equity of the premium Mountain Man Lager
•Some risks also associated with success of advertising campaigns
ANALYSISVariable per Barrel cost for Mountain Man
Lager(as mentioned in case study) : $66.93
Variable per barrel price of Mountain Man Light: $4.69+$66.93=$71.62
Estimated market price (Light Beer) per barrel that they can keep=$100
Gains per barrel=$100-$71.62=$28.38
SG&A costs=$900,0000 (annually)Min. Advertising Costs=$750000 (six
months)Total Investment=$1.65 million
No. of barrels they can produce= $1.65 million/$28.38(per barrel)
=approx 58140
CONCLUSIONNow, if the market share is to grow by
0.25% each year, Mountain Man Light may be able to cover up its investment cost in few years.
So, I think Chris Prangel should take the risk of setting up Mountain Man Light Beer.
THANKYOU
Created by Ramit Khurana, Guru Nanak Dev University, during a Marketing Internship under Prof. Sameer Mathur, IIM Lucknow.
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