Mountain Man - Brewing Company‘Bringing The Brand To Light’

Harvard Business School Case(Case Study)

Mountain Man, Huh??

Hierarchy •Chris Prangel ( Managing marketing operations, heir for the company )•Oscar Prangel ( Founder and President )•John Fader (Vice President )Domain•Premium Beer•West Virginia Market leader•Off premise locations•Blue collar workers ( above 35 )

Current Situation•Mature family business, 80 years old•Quality beer brand perception, old family recipe•2% downfall in revenue relative to prior fiscal year

Worth a try??

Brand Attributes

Points of Parity Smooth

DrinkableWater percentage

YAY!!

Market Analysis

Pitfalls•Decline in US per capita beer consumption since 2001 ( 18.3% )•Increase in federal excise tax•Initiatives and increasing health concerns•Competition from wine and spirit based drinks

Opportunities

•Rise in sales of light beer drink since 1999 ( 4% annually )•Targeting new segment of customers ( age 20-30 )•Only few competitors left in market for beer

Market Research ResultsBlue collar most loyal customer and largest segment in consumer market

Good awareness among young generation but preferred light beer drinks

Grass root marketing most effective

Push strategy helpful for brand

So??

Managerial questionsShould the light beer be launched

to reposition the brand?

Must the expansion be in line or with a new brand name?

Would it cannibalize or corrode the original brand?

Can it sustain itself among strong competitors ?

Alternatives??

Alternative 1 – Don’t launch light beer

AdvantagesOriginal brand name remains

untouched

Target customers do not feel alienated

No new load on company to recruit more forces and resources for marketing operations

Alternative II – Launch light beer under brand name

AdvantagesMoney and resources required for market operations will be lesser

Sales might increaseExpansion of brand in a new market

segment

Alternative III- launch light beer under new brand name

AdvantagesOriginal brand name remains

untouched

Increase in sales with new customer segment in market

Expansion of sales to on premise locations

Chris’ Analysis

• Assumption – 2% annual revenue loss till 2010

• Regional revenue growth of mountain man light 4% annually.

• Mountain man shall steadily grow its share of regional beer market at rate of 0.25% of total regional market share annually.

Oscar’s View• Targeting new segment of customer will alienate the existing segment of blue

collar workers.

• Mountain man shall never achieve the same loyalty among the new younger customers.

• The core brand equity shall get eroded

• Mountain man still stands and survives due to its great brand name.

• A fatal decision might dilute the brand name.

John Fader’s Judgement• Mountain man light cant match distribution and advertising of

already existing market leaders.

• The brand shall get lost in the sea of new product introductions.

• Mountain Man Light shall just replace facing they have earned for Mountain Man Lager

• Light beer shall draw huge time, revenue, resources and attention of original brand.

“Boosting sales of our core brand even slightly means more than what we will get in the light beer segment. It’s a pipedream, Chris”

Conclusion

• Mountain man beer light ‘SHOULD NOT’ be launched.

• Calculations of Chris are overly optimistic.

• Light beer market offers tremendous competition.

• Entering it will only dilute original brand and pressurise company.

Conclusion• Since many breweries have shut down already, its good chance

for Mountain Man Lager to succeed at other places.

• As Oscar said, the Brand already has a strong name which will help it survive the struggle.

• After a period of 5 years of analysis, Mountain Man Light must be launched if revenue continues to decline. In my opinion, at some point they shall stop declining

• The core brand must be concentrated on and improved upon.

DisclaimerThis presentation was created by Akhil Kumar Pathak, DTU New Delhi, during an internship under guidance of Prof Sameer Mathur, IIM Lucknow. (www.iiminternship.com )