Mountain Man Brewing Company: Bringing the Brand to Light |
Marketing 6520: Case Analysis |
EMBA id: 005814399 |
Chris Prangel is preparing to inherit a multi-generational business and wanted to explore the implications for expanding beyond Mountain Man Brewing Company’s (MMBC) one product offering-Mountain Man Lager. After reviewing MMBC’s current state of affairs and analyzing it with different marketing tools and financial forecasting, I recommend that MMBC move forward with a premium light beer product, start research and development on a recipe and retain a marketing firm to help build brand awareness in 2006 and launch ...view middle of the document...
I’m not suggesting MM Lager is in the declining stage of the life cycle, sales are falling due to increased competition from imports, wine, and changes in consumers drinking preferences. According to the SWOT analysis, having only one product is the biggest weakness and diversifying into light beer would allow MMBC to capture the growing opportunity in light beer consumption. To support this thesis, consider the facts. The beer industry is experiencing an annual consumption decline of over 2% and the light beer segment has grown market share from 30% in 2001 to over 50% by 2005 with a CAGR of 4%. In addition, diversifying MMBC’s portfolio and adding the premium light beer strategic business unit would allow it to capture the taste preferences of the younger generation, especially those who haven’t built loyalty to a specific brand.
There are various levels of assumed risk when developing and launching a new product line and MMBC isn’t immune to this. Senior management believes the light beer line will cannibalize between 5% and 20% of Lager sales and more importantly management doesn’t want to erode or “turnoff” it’s loyal customer base during the initial positioning of the light beer product. Since MM Lager is an empire brand, boasting and industry high 53% loyalty rating, these risks can be mitigated by leveraging the brand equity built over 80 years and extending the brand name to Mountain Man Light. I’m making assumptions and taking cue from the popularity, research, and capital spent by Budweiser (Bud Light), Miller (Miller Lite), and Coors (Coors Light) when branding their light beer lines.
Since the beer market is heavily saturated, developing a competitive marketing strategy is my next area of focus. The National light beers have done fantastic job marketing to the younger generation wanting a less bitter beer and to women. My strategy would make a distinction not only with the national and regional brewers, but with the original recipe. Mountain Man Brewing is known for producing a high quality, premium lager and I would make certain MM Light isn’t some cheaply produced and labeled version of the lager weakening the core product and setting up the light beer for failure. MM Light would segregate and position itself as a small-batch premium light beer; nearly identical on how craft beers position themselves. Additionally, I would leverage the independent status of the Mountain Man brand and popular anti-big business aura.
The segments of the market I would plan to target are the wealthy under forty-five adventurous, backpacking crowd, and women that would appreciate a premium light beer promoting this lifestyle. Additionally, targeting first time drinkers would be secondary. This type of specialized segmentation is psychographic as we would base attitudes and lifestyle to shape purchasing preference. The light beer product would be priced identical to MM Lager, maintaining consistency and consumers perceive quality with...