Mountain Man Brewing Company:

Bringing the Brand to Light

Harvard Business School Case

Bringing the Brand to Light

Harvard Business School Case

What is Mountain Man

Brewing Company?

Who is Chris Prangel ?

Main Players!

1. Guntar Prangel : Founder of Mountain Man Brewing Comoany in 1925 and about to retire in five years.

2. Chris Prangel : An MBA graduate and the son of Guntar Prangel, and about to inherit the company in 5 years.

• Founded by Guntar Prangel, the Mountain Man Beer Company (MMBC) in 1925.

• Launched as Mountain Man Lager. By the 1960s, Mountain Man Lager’s reputation was throughout the East Central region of the United States.

• By 2005 Mountain Man was generating revenues just over $50 million and selling over 520,000 barrels.

Situation Analysis

• Decreasing sales of the Mountain Man Lager over the last few years for the first time in history.

• Increase in the consumption of light beer by the customer.

• Chris Prangel wanted to introduce a new variety of product MM light.

• But he had doubts about the success of this decision.

• Careful planning and evaluation was needed in order to make this decision.

Situation Analysis

• Industry-

Beer

Main Issues

Evaluation of responses given by half a dozen participants on the introduction of Mountain Man’s Light beer variety.

• Response of young people

• Response of loyal old age group

• Gender Diversity

Main Issues

To decide if the introduction of new variety would increase the sales and would the company be able to breakeven taking into account the expenses that would be incurred when MM light would be introduced.

Insights from Demographics,2005

Insights show that majority of the customers who were regular customers of the brand were between 35-64 age group.

Insights from Demographics,2005

• MM Lager was voted as the best beer of the year by 67% of the adult population.

• Mountain Man was as recognizable a brand among working-class males in the East Central region

• But the trend was changing continuously and the consumption of light beer was increasing rapidly(4% over the last 6 years).

• MM’s brand equity was majorly due to its distinct bitter flavor.

Insights from Demographics,2005

The major competitors of the MM were the major domestic producers which together formed 74% of shipments in the region.

Insights from Demographics,2005

Consumption statistics showed the increase in the sales of light beer

Insights from Demographics,2005

Advertising Expenses by the other brands were too much:

Situation Type - Decision

Chris Prangel needed to decide whether to introduce MM Light in the market or go with the traditional MM Lager only.

Situation Type - Decision

MM Lager MM Light

Situation Type - Decision

Decision Criteria :

1. Increase in the sales of light beer by 4% over the last 6 years.

2. It might lead to diminishing the core brand values and dilution of the brand.

3. Young people would definitely try the new beer variety by MM and they constituted 27% of the beer drinking population.

4. Increased expenses and advertising.

Situation Type - Decision

Decision Evidence :

1. Light beer category had been steadily gaining in market share and accounted for 50.4% of volume sales in 2005.

2. Brand loyalty to MM was 57%(highest in market) and they could not afford brand dilution.

3. Young people’s preference might boost the sales and revenues.

4. Expenses in the advertising industry by other brands was too much.

Evaluations - Positive

The following things needed to be evaluated:

1. The demand for MM Lager might increase profoundly.

2. Light beer offered consistent growth in the industry.

3. Light beer appealed to young people and women and they consisted of a large section of society.

Evaluations - Negative

1. Diminishing brand value.

2. Increasing expenses without assuring results.

3. The demand for MM Lager might decrease.

4. Advertising was too expensive and MM could not afford to advertise as much as other brands.

Hypothesis

According to my hypothesis, MM should go with MM Lager only and not introduce MM Light.

According to my hypothesis, MM should go with MM Lager

only and not introduce MM Light.

Reasons/Proof and Actions for Hypothesis

1. Increase in the expenses to introduce new brand.

Reasons/Proof and Actions for Hypothesis

2. Dilution of brand name might further decrease the sales of MM Lager.

Reasons/Proof and Actions for Hypothesis

4. Guntar Prangel(father) had experience and advised not to increase the variety of the products.

Reasons/Proof and Actions for Hypothesis

5. Stick to the core brand values and target original age group of customers.

Examining Alternatives

Strongest Alternative : To introduce MM Light variety in the market and increase expenses for advertising and hope that the product sales increases.

Examining Alternatives

Weakness of the given hypothesis :

The greatest weakness would be that the number of customers would remain same and no new customers would be added, on the other hand, the sales of light beer will keep on increasing

Decision :

Downside of recommended decision :

No new customer would be added and thus the advertising for MM Lager should be increased I order to increase revenues.

New advertisement policies must be formed and money should be spent to promote the original product among new customers instead of increasing expenses on new product.

Decision :

Evidence against recommended decision :

We know that the consumption of light beer has increased by 4% over the last six years and light beer is a promising product in order to get good returns

Major alternative could also work in the market but is has no surety of returns and based on the experience of the father and the ability of the MM of afford expenses, it would be better not to go with the introduction of MM Light variety.

CREATED BY SAURABH AGRAWAL, NIT HAMIRPUR, DURING A MARKETING INTERNSHIP UNDER PROFESSOR SAMEER MATHUR.

DISCLAMER