Name: Prashant Kumar ROLL No.: EPGP-12A-075

NAME : PRASHANT KUMAR
ROLL No. : EPGP-12A-075

MOUNTAIN MAN BREWING
COMPANY:
BRINGING THE BRAND TO LIGHT
Introduction
 Founded in 1925 by Gunther Prangel.
 Core customers - blue collared men over age 45.
 Known as “WEST VIRGINIA’S BEER”
 Strong brand image with various accolades to its name.
 Generated revenue of over $50 million and sold 520,000 barrel of Mountain Man Lager in 2005.
 Price $2.25 for 12 ounce beer in bars and $4.99 for a pack at stores. Family owned business.
 Targeted Blue collared workers in the premium segment over the age of 45.
 Sold at off premise locations.
 Followed grassroots marketing to create brand awareness.
 Core attributes of brand- Authenticity ,quality and unique West Virginia toughness.
 Distinct bitter flavor of beer and greater alcohol content.
 Effective bottling and packaging.

Situation Analysis
 Revenues were down by 2% relative to 2004.
 Arcane laws were repealed ,leading to decreasing shelf space
 Competition from larger national brewery brands giving out deep

discounts.
 Change in beer drinker preferences.
 Growth in “ light beer category”, almost doubling volume sales to 50%

in 2005 as compared to 29.8 % in 2001.
 Change in consumer dynamics - Younger people were occupying

greater segment of beer drinkers.
Company Rivalry
Main Players include Anheuser Busch, Miller Late who have a
strong brand portfolio and great financial resources to fund their
marketing and advertising campaigns .
Objectives of the case
How to secure
company’s How to How could it
future with introduce newer How to market compensate for
changing product? Within the newer losses in core
customer same brand or product? product sales
preferences? different? and also act as a
booster?
SWOT Analysis
 STRENGTHS  WEAKNESS
1. Brand awareness(West Virginia’s beer) 1. Single revenue product
2. Loyal customers 2. Shrinking target customers
3. Authenticity, quality and uniqueness 3. Lack of financial resources.
4. Strong presence at off premise locations. 4. Weak presence at on premise
locations.
 THREATS  OPPORTUNITIES
1. Ageing target market 1. Brand extension in light beer
2. Increase federal taxes market
3. Deep pocketed competitors 2. Tap potential younger age
4. Changing customer preferences and customers
dynamics 3. Stronger brand image
5. Decline in revenue 4. Expanding distribution and sales
channels.
Light Beer Sales Evaluation
Year 2005 2006 2007 2008 2009
Light Beer 18,744,303 19,494,075 20,273,838 21,084,792 21,928,184
Consumptio
n
CAGR 4% 4% 4% 4%
Estimated 0.25 0.5 0.75 1.0
growth(0.25
)
Estimated 48,735 101,369 158,136 219,282
sales in
barrels
Estimated $4,727,295 $9,832,793 $15,339,192 $21,270,338
revenue($9
7/
barrel)
Breakeven analysis
Mountain Light beer (2006-2007)
 Variable Cost Calculations :

 Variable cost of MM lager = $66.93
 Variable cost of MM light = $ 66.93+ $ 4.69 = $71.62
 Price /barrel = $ 97
 Net profit margin = $ 25.38 ($ 97- 71.62)
Mountain Man Light
Fixed cost calculations(without cannibalization)
Initial advertising campaign cost = $750,000
Incremental SG&A cost (2006-07) = $900,000*2= $18,00,000
Total fixed cost = $2,550,000
Fixed cost calculations(with 20% cannibalization+ 2% loss)

Cost from cannibalization( 22% for 2 years)
=$437,226 +$341,036 = $778,262
TFC(with cannibalization) = $3,328,262
Mountain Man light
To breakeven(without cannibalization)
• Total Breakeven volume = Fixed costs/Net profit margin
=$2550000/$25.38 = 100,473 barrels
• Total breakeven revenue = Total Breakeven volume * price/barrel =
$ 100,473 *$97
= $9,74,581
To breakeven (with cannibalization)
• Total breakeven volume = Fixed costs/ net profit margin
= $ 3328262/$25.38
= 131,137 barrels
• Total Breakeven revenue = Total breakeven volume *price/barrel
= $131,137*$97
= $12, 720,308
Mountain Man Light
Mountain Man Light beer will break even in both
scenarios by end of 2007
• Revenue needed to breakeven (with cannibalization)
= $9,745,881
• Revenue needed to breakeven(without cannibalization)
= $12,720,308
Estimated revenues for Mountain Man Light beer
• For 2006 = $ 4,727,295
• For 2007 = $9,832,793
• Total revenues at the end of 2007 = $ 14,560,088
Launch Light beer with New Brand
Name
• Attract potential customers
• Greater revenue
PROS
• No brand dilution
• Lesser core product erosion

• Increased advertisement expenditure
• Difficult to market newer brands
• New strategy for packaging, labeling,
CONS
divisions etc.
• Compete with already established brands in
light beer category
Launch Light beer under the same
brand name
• Low advertisement and
production cost
PROS • Greater revenue
• Greater brand recognition by
consumers
• Brand dilution
CONS • Core product cannibalization
• Loss of core customers
Marketing Strategy
4Ps to be followed:
PRODUCT PRICE
•Attractive product design •Use appropriate pricing strategy for 12
• Separate labeling and demarcation of ounce beer and 6 packs considering market
lager and light bottles. price trends
•Trendy name and slogan for both •Same price at all on premise locations.
products. •Offer retailers incentives by giving supplier
•Maintain same quality as Lager discounts to increase shelf space.
PLACE Promotions
•Continue sales of MM lager at off •Continue grassroots marketing for Lager.
premise locations. •Extensive advertising campaigns both online
•Sell MM Light through on premise and offline.
locations to reach younger demographic •Employ youth icons to endorse Light.
and women •Use communication channels like concerts
as well as radio/TV.
•Use offers and promotions to increase
customer product trial.
Conclusion
• A 0.5% capture of market share is possible
by 2007 with the given market situation considering
cannibalization of shares.
• Hence, Chris should go ahead with his
decision to launch Mountain Man Light under the
same brand name.
• He should formulate an effective marketing
strategy using the 4P mix to enhance brand image
and provide value to newer as well as core customers.

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NAME : PRASHANT KUMAR

ROLL No. : EPGP-12A-075

 Core customers - blue collared men over age 45.

 Known as “WEST VIRGINIA’S BEER”

 Strong brand image with various accolades to its name.

 Sold at off premise locations.

 Followed grassroots marketing to create brand awareness.

 Distinct bitter flavor of beer and greater alcohol content.

 Effective bottling and packaging.

 Arcane laws were repealed ,leading to decreasing shelf space

 Competition from larger national brewery brands giving out deep

 Change in beer drinker preferences.

 Growth in “ light beer category”, almost doubling volume sales to 50%

 Change in consumer dynamics - Younger people were occupying

 Variable Cost Calculations :

Fixed cost calculations(with 20% cannibalization+ 2% loss)

• Lesser core product erosion

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