Mountain Man Brewing Co. is a market leader in West Virginia that produces one beer called Mountain Man Lager. To remain profitable amid a 2% revenue decline, the company is considering launching a light beer called Mountain Man Light to tap into the growing light beer segment. This would involve new product development, marketing, and costs of $1.65 million. The strategy could increase revenue but faces risks of high costs, competition, and difficulty building a new brand.

1. MOUNTAIN MAN
BREWING CO.
CASE STUDY BY:
DEVASHISH KHULBE

2. KEY HIGHLIGHTS ABOUT THE COMPANY
• Market leader in West Virginia for over 50 years.
• Also known as 'Virginia beer'.
• Marketing operations managed by Chris Prangel, a recent MBA graduate.
• Brewed one beer called 'Mountain Man Lager'.
• Mountain Man's beer quite popular among blue collar workers.

3. TIMELINE
• 1925-Founded by Gunter Prangel
• 1960s-MM's Lager entrenched throughout East Central
US
• 2005-Attained top market position by selling over
520,000 barrels and generating revenues of over $50
million.
• 2006-Company taken over by Chris Prangel.

4. CURRENT SITUATION IN MARKET
• 2% decline in revenue.
• 4% growth in light beer segment due to youth preferences.
• High brand equity in premium segment.
• Mostly sold at off-premise locations.
• Challenge to company to remain profitable.

5. COMPETITORS
• Anhueser Bush
• Miller Brewing Co.
• Adolf Coors
• These companies possess 74% share
of overall brewing market.
• They have 84% market share in light
beer segment.
• Rely heavily on broadcasting market
as well as diversifications to create
barriers for entry of other brands.

6. SITUATION ANALYSIS OF CUSTOMERS
• The beer industry in US generates $ 75 Billion in
annual sales.
• Customers base their choice on taste, price, occasion,
perceived quality, brand image, tradition, local and
authenticity
• Eastern Central Region represents $13 billion in annual
sales out of $75 billion.
• Mountain Man counts with 81% male drinkers,
thusneglects Female market segment
• Female market segment which represents 32% of
theTAM of domestic premium beer.

7. BEER CONSUMPTION DATA OF U.S.

8. AIM OF THE CASE STUDY
• Capturing the light beer market.
• Its effect on brand value and current product.
• Investment and returns on the new product.

9. SOLUTIONS
• Launch Mountain Man Light via brand extension.
• Launch new product using 4p`s of marketing mix i.e Product, Price, Place Promotion.
• Advertising the new beer brand through Online Media and Social Networking Sites
• Providing offer in prices for Mountain Man Light if bought in high quantity
• Easy to convince retailers to stock &promote
• Labeling and packaging efficiency

10. PROS AND CONS OF NEW APPROACH
Pros
• Increase in revenue
• No brand dilution.
• Cater Untapped market.
Cons
• High advertising costs.
• Difficult to build new brand name.
• Pressure by competitors.
• Light beer already has a strong
presence.

11. PROJECTED COSTS TO COMPANY
• Advertising: $750,000 for intensive six-month advertising.
• Variable cost per barrel of Mountain Man Lager: $66.
• SG & A costs: $900,000 annually.
• Variable cost of new light beer: $71.
• Market price per barrel of new beer: $97.

12. PROJECTED REVENUES
• Market price of new beer per barrel: $97.
• Revenue per barrel: $25.
• Total investment: $1.65 million.
• Break even volume: 1650,000/25= 65000 barrels.

13. RISKS
• New product can get lost in the sea of other
products introduced by other companies.
• Projections may be overly optimistic.
• Advertising cannot be as aggressive as other big
companies.
• Product awareness and brand value may not
reach up to the mark.

14. THANK YOU!