Created as part of a Case Study Assignment during an internship under Prof.Sameer Mathur, IIM Lucknow

1. CASE STUDY :
Mountain Man Brewing Company
- Bringing the Brand To Light

2. An introduction on Mountain Man Beer Company
What is its background?
• Founded by Guntar Prangel in 1925.
• Family Owned Business
• Legacy brew
• Reputed as West Virginia’s Beer
• Strong brand and Premium segment market leader for
almost 50 years
• Popular among blue collar working men

3. Who are the players?
• Chris Prangel – Marketing Head, to inherit
MMBC
• Oscar Prangel – President and Owner of
MMBC
(to retire in another 5 years)

4. Current Situation
MMBC :
• High Brand Equity in Premium
Segment
• Mostly sold at Off Premise locations
• Decline in revenue by 2%
Overall :
• Growth in light beer segment by 4%

5.  2% decline in revenue
 Rising popularity of light beer
among youth

6. So What to Do next?

7. Chris Prangel thought : How to boost
revenue?
1. By attracting young drinkers via a light beer
category.
2. Encourage loyal consumer base to consume
more or expand in the same domain.
But the blue collar customers already
accounted for a large percentage of sales,
which meant near saturation in that
segment.

8. So what are our options ?
1. Introduce light beer under brand name
2. Don’t introduce light beer, focus on core
brand
3. Introduce light beer under different brand
name
Let us look at some market and demographic
statistics to support our arguments for and
against these options.

9. Competitive Market Shares

10. Beer Drinker Profiles

11. Option 1 :
Introduce light beer under brand name
Pros :
 New target segment
 Increase in revenue
 Lower advertisement cost than new brand
 Leverage from existing brand name

12. Option 1 :
Introduce light beer under brand name
Cons:
 Brand dilution
 Capture shelf space of Lager
 Loss of core customers
 Traditional advertising needed unlike typical
grassroots method.

13. Option 2:
Don’t introduce light beer
Pros:
 No reduction in brand equity
 Core customers stay satisfied
 No additional costs
Cons:
 Invite imminent danger to firm in future
 Leave a high potential market segment
untapped

14. Option 3:
Introduce Light Beer under different brand
name
Pros:
 New target segment
 Increase in revenue
 No brand dilution
Cons:
 High advertising and operation cost
 Need to build new brand
 Many other light beer competitors in market

15. What is Chris’s
Estimate?

16. Assuming Option 1 as plan of action :
• 750,000 in intensive six month advertising
900,000 in annual SG&A
that is, about 1.6 million in advertising cost
Lesser than normal advertising costs for a
new
product.
• Variable cost per barrel for Mountain Man
Lager is $66.93
For Mountain Man Light it is $71.62
So, contribution margin is lesser for Light
Beer at
same selling price.

17. • From the Mountain Man Income Statement,
gross margin is $15,636,400
Lager SP =
Gross margin
Number of barrels
+ Variable cost
(15,636,400/520,000)+66.93 = 97
So, the selling price of
Mountain Man Light is $97

18. • Revenue per barrel = 97- 71.62
= $ 25.38
• Breakeven number of units =
𝑇𝑜𝑡𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑅𝑒𝑣𝑒𝑛𝑢𝑒 𝑝𝑒𝑟 𝑏𝑎𝑟𝑟𝑒𝑙
= 65,012 barrels

19. Some future predictions Chris
arrives at after considering
revenue and net profit projections :
• Expected profit for firm would occur from
2007, when the new product sales would
cross breakeven and cover investment costs.
Assuming Mountain Man Light captures 0.25%
of
market share every year.

20. • Growth rate in Mountain Man Light in market
share annually might not be fulfilled
• Competition is heavy amidst multiple light
beer brands and product extensions of big
brands
• Young drinkers’ ‘anti big- business’ mentality
and other factors might not create same
loyalty as blue-collar workers.

21. What about the alternatives …..
Not introducing Light Beer might lead to
crucial decline of the company in future years.
Introducing Light Beer under a separate brand
name would lead to additional costs, and
effort to create a new brand.

22. Conclusion :
Introduce Mountain Man Light Beer

24. DISCLAIMER
Created by Sara Jacob,
NIT Trichy during a
marketing internship under
Prof.Sameer Mathur, IIM
Lucknow