The document discusses Mountain Man Beer Company's options to address declining sales and an aging customer base. It is considering introducing a light beer brand. Analyses show introducing a light beer under the Mountain Man brand could break even within two years if it gains 0.25% market share annually. However, this could risk cannibalizing existing brands or confusing brand positioning. Creating a new light beer brand would be more expensive and difficult. The document concludes Mountain Man should introduce a light beer under its brand, targeting both loyal customers and younger drinkers, using effective marketing.

1. Mountain Man
Beer Company
Chris Pangel

2. Mountain Man Lager
- ‘West Virginia’s beer’
• Distinctly bitter flavour and slightly
higher than average alcohol content.
• Packaged in a brown bottle to
accentuate beer’s dark colour.
• Pricing similar to premium domestic
brands such as Miller and Budweiser.
($2.25 for a 12-ounce serving and $4.99
for a six-pack)
• Own small sales force to make it
available in off premise locations.
(stores/supermarkets)

3. Mountain Man Lager
- ‘West Virginia’s beer’
• Authenticity
• Quality
• Toughness
Core Attributes

4. Profile of Drinkers
• 81% are Male.
• 64% are above 45 years of age.
• 47% have household Income
below $50k.
Loyal Market Segment comprise of working class men or
‘blue collar’ men over age 45 belonging to the
middle-to-lower income group.

5. Best-known regional beer, with an unaided response rate of 67% from the state’s adult
population.
Mountain Man Lager won “Best Beer in West Virginia” for its eighth year straight.
It was selected as “America’s Championship Lager” at the American Beer Championship.
70 % sale through off-premise locations using its’ own sales’ force.
Only regional brewer to have not bend down to circumstances or undergo any change.
53% brand loyalty among Blue-Collar Customers.

6. THREATS
• Since 2001, U.S. per capita beer
consumption had declined by 2.3%.
• The state had recently repealed arcane laws
that had sharply limited the promotion of
beer in retail establishments, and thus,
retail stores began selling beer at deep
discounts
• Revenues were down 2% relative to the
prior fiscal year.
• Light Beer took over more than 50% of the
market.
• Only 2% of the key consumer segment for
beer companies (the younger drinkers, 21–
27 years of age) had Mountain Man Lager.

7. Now What
• Market Survey

8. 0
10
20
30
40
50
60
Consumption
Light Beer
Premium Beer
Popular
Imported
Premium
Beer Consumption by Type
%
0
10
20
30
40
50
60
2005 Market Share
Anheuser-Busch
Miller
Coors
Other brands
Imports
Competition in Light Beer
Market Share

9. Now
• Venture into new market
• Protect the Brand

10. Options.
1. Maintain Status Quo.
2. Introduce Mountain Man Light Beer.
3. Introduce Light beer under a different
brand name.

11. Maintain Status Quo.
• Customer Base is ageing.
• Drop off rate is exceeding Replacement Rate.
• Steady decline in sales by 2 % annually.
15,00,000
20,00,000
25,00,000
30,00,000
35,00,000
2005 2006 2007 2008 2009 2010
Status Quo
Revenue(in $)
Not feasible

12. Introduce Light Beer under a
different brand name.
Pros
Possible increase in Revenue
No risk of Brand Erosion
New market opportunities
Light Beer sales have taken over
50% of Beer Market with a +4%
CAGR
Cons
High Advertisement Costs
Difficult to build a new brand
Difficult to cater to different branding
for different market segments
High competition in Light Beer industry
with Premium Brands in the market

13. CONCLUSION
1. For a new brand, advertisement costs will go up more than $20 million.
2. Break Even will take more than 10 years.
3. Brand Creation and Survival of a new Brand in a competitive market will
be tough.
Not feasible

14. Introduce Mountain Man Light Beer.
Pros
Possible increase in Revenue
Lower Advertisement Cost
New market opportunities
Light Beer sales have taken over
50% of Beer Market with a +4%
CAGR
Cons
Chances of Product Cannibalization
Negative effect on Brand Positioning
Loss of loyal consumers
High competition in Light Beer industry
with Premium Brands in the market

15. Break Even?
Initial Costs
Advertising - $750,000
SG&A costs - $900,000
COGS - $71.62
(per barrel)
• 69% of selling price is COGS.
• Price of light beer has to be
equal to that of lager beer.
Price of Light Beer = 97$
Profit Margin per barrel of Light Beer = $25.38
(keeping COGS in mind)

16. Break Even!
0.25 % increase in Market Share every year.
4% increase for Light Beer in total Beer market share.
Market Share (number of barrels) for Light Beer in 2005 = 18,744,303
Number of barrels required to break even = 65,012
Year Expected Quantity(barrels)
2005 -
2006 48,735
2007 101,369
2008 158,135

17. CONCLUSION
1. Mountain Man Light Beer will be able to achieve break even by 2007
in a total time of two years if it starts off in 2005.
2. Product can be profitable at a rate of
3. Upliftment of brand and increase of awareness will take place.
Cautions
1. Estimates might be overly optimistic
2. Prediction depends on extent of aggressive marketing.

18. 15,00,000
20,00,000
25,00,000
30,00,000
35,00,000
40,00,000
45,00,000
50,00,000
2005 2006 2007 2008 2009 2010
Status Quo
Mountain Man Light
Beer
Revenue(in $)
Projected Growth

19. Final Step
Effective Marketing & Branding
• Use traditional brand & loyalty
• Focus on grass-root
• Cross-Promote
• Try to reach out to youth
Using the same packing for Light Beer, Mountain Man can introduce it under a
new name like Mountain Man Live Young.
5 P’s To Remember
• Product
• Price
• Place
• People
• Promotion
Chris Prangel should go ahead with the sale of Light Beer under the MMBC’s brandname.

20. DISCLAIMER
This presentation has been prepared by
Rajit Bhattacharya of Jadavpur University
during a marketing internship under
Prof Sameer Mathur of IIM Lucknow.