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    Mountain Man Brewing Company

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    Fez Research Laboratory
    Branding and Marketing Communications. A group assignment for class discussion. Feel free to give your opinion and rate.

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    Attribution Non-Commercial (BY-NC)

    Mountain Man Brewing Company

    Uploaded by

    Fez Research Laboratory
    10K views32 pages
    Branding and Marketing Communications. A group assignment for class discussion. Feel free to give your opinion and rate.

    Copyright

    © Attribution Non-Commercial (BY-NC)

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    Branding and Marketing Communications. A group assignment for class discussion. Feel free to give your opinion and rate.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    10K views32 pages

    Mountain Man Brewing Company

    Uploaded by

    Fez Research Laboratory
    Branding and Marketing Communications. A group assignment for class discussion. Feel free to give your opinion and rate.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    of 32

    PRESENT

    MM6016
    Branding and Marketing Communication

    BRINGING THE BRAND TO LIGHT

    29111311 Haidir Afesina 29111363 Wirania Swasty 29111384 Chairunnisa M. 29111387 F X Kresna Paska 29111398 Aqsa Adhiperwira 29111400 Fajar Liem

    Prepared & Presented by:

    HIGHLIGHTS
    Chris Prangel has returned home to manage the marketing operations of Mountain Man Brewing Company (MMBC) Experiencing declining sales for the first time in its history
    due to changes in beer drinkers' taste preferences

    Want to launch Mountain Man Light, a "light beer attracting younger drinkers

    Prepared & Presented by:

    MMBC

    A family-owned business which brewing bitter-tasting beer

    Brewed one beer Mountain Man Lager, also known as West Virginias beer Mountain Man Lager's brand equity is a key

    Popular among blue-collar workers

    Prepared & Presented by:

    TIMELINE

    2006
    2005 1960s 1925
    Founded by Guntar Prangel MM Lagers entrenched throughout East Central US Selling over 520,000 barrels Generating revenues over $50 million down 2% Top market position Best Beer in West Virginia; for its 8 year straight Best Beer in Indiana Winner of Americas Championship Lager Oscar Prangel retired Taken over by Chris Prangel wanted to launch Mountain Man Light

    Prepared & Presented by:

    INDUSTRY ANALYSIS
    (PORTER 5 FORCES)
    Threat of new Entrants Local Beer & craft beer Lots of big & famous competitor Customer loyalty of product competitor

    Supplier Power Lots of supplier (raw material) Low switching cost

    Rivalry Competition Local & Import Beer

    Buyer Power Price Sensitivity Product Undifferentiated

    Threat of Substitutes

    Wine Spirits

    The beer market is matured, the revenue is dynamic

    Prepared & Presented by:

    PERCEPTUAL MAPS
    The Occasions being celebrated vs Quality among competitors
    The occasion being celebrated
    +

    Brand awareness vs Price among competitors


    Brand Awareness +

    Import beer
    Specialty Brewers Major Domestic producers + Quality MMBC Price

    Major Domestic producers


    Import beer

    +
    Specialty Brewers

    Second-tier domestic producers


    MMBC

    Second-tier domestic producers

    Prepared & Presented by:

    PERCEPTUAL MAPS
    Taste vs Local Authenticity among Competitors
    Taste

    MMBC Specialty Brewers

    Import beer Major domestic producers

    Local Authenticity

    +
    Second tier domestic producers

    Prepared & Presented by:

    COMPETITION

    Mountain Man Lager

    Source: http://en.wikipedia.org/wiki/Beer_style

    Prepared & Presented by:

    MARKET SHARE
    Exhibit 6. Light Beer Market Shares

    Prepared & Presented by:

    MMBC CBBE PYRAMID


    53% brand loyalty rate
    As good a beer as you could get anywhere Loyal customer feel this is the part of their life, Habit from generation

    Best Beer in West Virginia


    Focused on quality, Won beer championship, Use original ingredients Recognizable brand

    Local Authenticity, Legacy


    Independet family owned brewing company, Old company MMBC

    Prepared & Presented by:

    WHAT HAS MADE MMBC SUCCESSFUL?

    WHAT IS DISTINGUISHES IT FROM COMPETITORS?

    Prepared & Presented by:

    KEY SUCCESS
    Manufacture an exceptional beer with a great brand name
    Mountain Man was as recognizable a brand among working-class males in the East Central region The good perception of quality and the brand loyalty it cultivated

    Never lost sight of their core customer


    Never been seduced by the other guys market

    Prepared & Presented by:

    WHAT ABOUT THESE FACTORS ENABLED MMBC TO CREATE SUCH AS A STRONG BRAND?

    Prepared & Presented by:

    MMBC AS A STRONG BRAND


    Consistency of taste and quality
    The uniqueness (bitter flavor and slightly higher-than-average
    alcohol content)

    Its history and its status as an independent, familyowned brewery to create an aura of authenticity Positioning the beer with its core drinkers
    Blue-collar, which tended to be very loyal

    Invested in a number of branding activities to build brand equity with core consumers

    Prepared & Presented by:

    WHAT HAS CAUSED MMBCS DECLINE IN SPITE OF ITS STRONG BRAND?

    Prepared & Presented by:

    MMBCS PROBLEMS
    It has lost 2% of its revenue base annually (2005) aging demographic in the shrinking premium segment trend (customers are over age 45)
    Sales and profits ($)
    Introduction Growth Maturity
    Decline Sales

    Profits

    Losses-investment

    Time

    Prepared & Presented by:

    FACT FINDING

    BEER INDUSTRY
    Over the previous six years, light beer sales in the US had been growing at a compound annual rate of 4%, while traditional premium beer sales had declined annually by the same percentage

    Since 2001, US per capita beer consumption had declined by 2.3%


    Competition from wine and spirits-based drinks, an increase in the federal excise tax, initiatives encouraging moderation and personal responsibility, and increasing health concerns

    Prepared & Presented by:

    FACT FINDING BEER INDUSTRY CONT.


    Key consumer segment was younger drinkers (21-27 years of age) who preferred light beer and accounted for more than 27% of total beer consumption

    The trend was growth in the light beer category


    Accounted for 50.4% of volume sales in 2005

    In aging demographic, the premium segment of the beer market were shrinking

    Prepared & Presented by:

    FACT FINDING MMBC


    Brand played a critical role in the beer-purchasing decision Recent study in West Virginia, the audience rated Mountain Man Lager as the best-known regional beer Consumers considered: taste, price, the occasion being celebrated, perceived quality, brand image, tradition, and local authenticity MMBC relied on its history and its status as an independent, family-owned brewery to create an aura of authenticity MMBC positioning the beer with its core drinkers (blue-collar, middle-to-lower income, men, over age 45)

    Prepared & Presented by:

    FACT FINDING MMBC CONT.


    There were ranges of subjective attributes that defined the quality of Mountain Man Lager, like its smoothness, percentage of water content, and drinkabilitybut it was Mountain Man Lagers distinctively bitter flavor and slightly higher-thanaverage alcohol content that uniquely contributed to the companys brand equity

    Prepared & Presented by:

    SHOULD MMBC INTRODUCE A LIGHT BEER?

    Prepared & Presented by:

    MMBCS BUSINESS STRATEGY


    In response due to declining on sales, MMBCs options: whether or not to launch the new product
    Mountain Man Light a light beer formulation of Mountain Man Lager

    Yes

    Prepared & Presented by:

    Strengths
    Market leader and established brand name Strong brand equity

    Weakness
    New brand extension will spread already thin resources of the company MMBC doesnt have the marketing budget to compete in the light beer market

    Opportunities
    Younger demographic and increase lifetime customer value Light beer appealed to women

    Threats
    Risk of canalization of core brand Alienation of core consumer through new brand that might not be in line with their aspirations of MMBC

    Prepared & Presented by:

    IS MOUNTAIN MAN LIGHT FEASIBLE FOR MMBC?

    FEASIBILITY OF MOUNTAIN MAN LIGHT


    Nett revenue: $50,440,000 Barrel sold 520,000 Selling price per barrel $97 0.25% Market Share Every Year Light beer market share in 2005: 18,744,303 With 4% CAGR: 2006: 19,494,075 MMBC market share: 48,735 2007: 20,273,838 MMBC market share: 101,369 MMBC Revenue from light beer 2006: 48,735x97=$ 4,727,295 MMBC Revenue from light beer 2007: 101,369 x97=$ 9,832,793

    Prepared & Presented by:

    Feasibility Analysis
    Break Even Point = Fixed cost/Variable cost ($900k +$750k)/($66.93+$4.69) $1.650k/$(97-71.62) = 65,012 barrels
    2% declining sales 5% canibalization 10% canibalization 20% canibalization 2005 2006 $ 50,440,000.00 $ 49,431,200.00 $ 46,959,640.00 $ 44,488,080.00 $ 39,544,960.00 2007 $ 48,442,576.00 $ 46,020,447.20 $ 43,598,318.40 $ 38,754,060.80

    2% declining sales 5% canibalization 10% canibalization 20% canibalization

    2005 2006 2007 $ 50,440,000.00 $ 49,431,200.00 Loss $ 48,442,576.00 Loss $ 46,959,640.00 $ 2,471,560.00 $ 46,020,447.20 $ 2,422,128.80 $ 44,488,080.00 $ 4,943,120.00 $ 43,598,318.40 $ 4,844,257.60 $ 39,544,960.00 $ 9,886,240.00 $ 38,754,060.80 $ 9,688,515.20

    Revenue From Light Beer

    $4,727,295.00

    $ 9,832,793.00

    Prepared & Presented by:

    SHOULD MMBC LAUNCH MOUNTAIN MAN LIGHT?

    Prepared & Presented by:

    MOUNTAIN MAN LIGHT


    Yes, targeted to young consumer 21-27
    27% of total beer consumption & spending twice as much per capita on alcoholic beverages than consumers over 35 years of age

    The light beer category accounted for 50.4% of volume sales in 2005, compared with 29.8% in 2001 To grab a potential 0.25% market share annually from the regional light beer market

    The projected regional revenue growth is at 4% annually

    Prepared & Presented by:

    MOUNTAIN MAN LIGHT MARKETING MIX


    Product
    Brand name Mountain Man Light Packaged in a green bottle to differentiate from its lager The green bottle also indicated a lower alcohol content

    Price

    Need further market research to determine the optimal pricing

    Promotion

    Grass-roots marketing by word of mouth

    Place

    On-premise locations: restaurants and bars

    Prepared & Presented by:

    EVALUATION OF MMBCS OPTIONS


    Launch Mountain Man Light through brand extension

    Prepared & Presented by:

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