Downloaded 17 times
Uploaded byPlayground
Harvard Business Case review - Case Study
This document summarizes a case study about Mountain Man Brewing Company considering launching a light beer brand to target younger customers. It outlines the company background, current market situation, opportunities and risks of different alternatives. The Vice President argues a light beer would dilute the original brand and be unable to compete. The President agrees it would alienate existing customers. However, the Marketing head provides projections that a light beer could modestly boost revenue. In the end, the conclusion is that a light beer should not be launched currently and the core brand should be focused on instead if revenue continues declining over 5 years.
More Related Content
Similar to Harvard Business Case review - Case Study
Harvard Business Case review - Case Study
- 1. Mountain Man -Brewing Company ‘Bringing The Brand To Light’ Harvard Business School Case (Case Study)
- 2.
- 3. 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
- 4.
- 5. Brand Attributes Points of Parity Smooth Drinkable Water percentage Pointsof difference Distinctively bitter flavour Higher alcohol content
- 6.
- 7. Market Analysis Pitfalls •Decline inUS 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
- 10. Market Research Results Blue collarmost 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
- 13.
- 14. Managerial questions Should thelight 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 ?
- 15.
- 16. Alternative 1 –Don’t launch light beer Advantages Original brand name remains untouched Target customers do not feel alienated No new load on company to recruit more forces and resources for marketing operations Risks Declining sales may continue Loyal customer may switch and try out new changing taste
- 17. Alternative II –Launch light beer under brand name Advantages Money and resources required for market operations will be lesser Sales might increase Expansion of brand in a new market segment Risks Core brand value might corrode or get cannibalized Original segment of customers may feel alienated
- 18. Alternative III- launchlight beer under new brand name Advantages Original brand name remains untouched Increase in sales with new customer segment in market Expansion of sales to on premise locations Risks Huge revenue required for marketing and promotion of the new brand Huge competition in market
- 19. 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.
- 20. Oscar’s View • Targetingnew 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.
- 21. 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.
- 22. “Boosting sales ofour core brand even slightly means more than what we will get in the light beer segment. It’s a pipedream, Chris”
- 23. Conclusion • Mountain manbeer 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.
- 24. Conclusion • Since manybreweries 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.
- 25. Disclaimer This presentation wascreated by Akhil Kumar Pathak, DTU New Delhi, during an internship under guidance of Prof Sameer Mathur, IIM Lucknow. (www.iiminternship.com )