Mountain Man Brewing Company Executive Summary
MBA 753: Brand Management
Mountain Man Brewing Company (MMBC), a regional family owned brewery, is experiencing a drop in revenue, first time in its 80 year old history. MMBC’s market share erosion is a result of a change in customer preferences from traditional beer to light beer, an aging demographic in the shrinking premium beer market, and an increase in control of major domestic producers on distributors. This paper evaluates Chris Prangel’s strategy to introduce Mountain Man Light Beer, and recommends an alternate brand and product extension strategy to counter MMBC’s drop in sales.
Over the past 6 years, light beer market in the US has been growing at 4%, whereas the traditional premium beer market has been declining at the same rate. Light beer sale accounts for approx. 50% of the total beer sales. Though introducing a light beer seems to be a logical more, but there is a high probability that Mountain Man Light might fail in a highly concentrated market and damage MMBC’s brand identity of an independent, authentic, family-‐ owned brewery. First, by offering a light beer MMBC could damage it brand equity amongst its core segment, blue-‐ collar middle-‐to-‐lower income men over age 45. From the focus group interviews, it is evident that a light beer might not only have a negative impact on its core segment, but also will not resonate as a light beer with younger audience. Therefore, there is a high probability of light beer not selling and further reduction in its traditional Mountain Man Lager. Second, MMBC will need considerable investment, especially in advertising and product messaging, to compete against the 3 major domestic beer producers who control 85% of the light beer market share (Figure 1). Over the period of past 80 years, MMBC has created a high level of brand awareness through word of mouth. To create awareness on Mountain Man Light and rapidly change the brand perception to appeal to younger audience will not be financially sustainable, especially MMBC cannot compete with the advertising efforts of the 3 market leaders. Third, the 3 major beer producers benefit from economies of scale, allowing these major manufacturers to keep costs low and to continuously introduce new products in the rapidly increasing light beer market. Finally, in a highly concentrated light beer market MMBC’s distributors might not carry its light beer brand. MMBC’s distributors also…