case study on mountain man beer company

1. Abhishek kumar
Tarun sharma
Anjum
Adtya bhatiya

2. WHAT IS THE ALCOHOL INDUSTRY?
• The alcohol industry can be defined in different ways, with no agreed settled definition. The term is
most commonly used to refer to corporations engaged in the production of alcoholic beverages.
However, broader definitions also exist. The World Health Organization.
• Example, refers to “developers, producers, distributors, marketers and sellers of alcoholic
beverages”.
• Alcohol researchers have observed that:
• The alcoholic beverage industry includes producers, wholesalers and distributors, point-of-sale
operators (whether licensed or not) and hospitality providers such as hotels or cafés that serve
alcohol.
• Its production and distribution arms are allied closely with agriculture, trucking, capital goods
manufacturing and packaging industries.

3. Who are the major participants in the alcohol industry
• Raw materials suppliers: Primarily farmers, who grow ingredients such as barley, hops, apples,
grapes and sugar
• Producers: Companies that manufacture alcohol, managing processes such as brewing, distillation,
and bottling
• Distributors & Wholesalers: Intermediaries who connect producers and vendors, typically storing
and transporting the product
• Vendors: Sellers of alcohol – both on-licence (where drinks are bought and consumed on the
premises e.g. pubs, club and restaurants) and off-licence (where the drinks are bought and then
taken away to be consumed e.g. supermarkets)
• Input Suppliers/Contractors: Companies that supply products and services to any of the above
e.g. providing farm machinery, distillation equipment, freight services, marketing, consultancy,
lobbying etc.

5. LEADING GLOBAL ALCOHOL PRODUCER
Ref:- institute of alcohol studies- UK

6. ALCOHOL CONSUMPTION LEVELS IN UNITS BY
SEX
Drinker type Units per week
Men Women
Moderate Less than 21 Less than 14
Hazardous 21-50 14-35
Harmful 50+ 35+

7. Share of global beer production & global spirit volume
market share
Ref:- institute of alcohol studies- UK

8. TOP 10 BEST SELLING ALCOHOL BRANDS
Ref:- institute of alcohol studies- UK

9. COMPANY ANALYSIS
• Founded in 1925 by Guntar Prangel.
• Mountain Man brewed one beer,Mountain Man Lager,also called “West Virginia’s beer”.
• By the 1960s,Mountain Man Lager was well established as a quality brew in the East Central region of
the United States.
• The beer was packaged in a brown bottle,with its original 1925 design of a crew of coal miners printed
on the front.
• Mountain Man Lager was priced similar to premium domestic brands and below specialty brands.
• The primary customer base of the brand included blue-collar,middle to lower income men aged over 45.

10. WHAT DOES BRAND STAND FOR
Mountain Man has relied on its history and status as an independent, family-owned brewery to create
an aura of authenticity and to position the beer with its core drinkers.
• CORE ATTRIBUTES OF THE BRAND
• Authenticity
• Quality
• Unique west virginia “toughness”

11. MARKETING FINDING
• By 2005,the company was generating revenues of over $50 million and selling over 520,000 barrels of the lager
beer.
• The mountain Man Lager won the “Best beer in West Virginia” for the eighth straight year in 2005 and was selected
as America’s Championship Lager.
• The Brand awareness , equity and the loyalty it cultivated were the cornerstones of its success.
• The sole brand loyalty rate for Mountain Man Lager was 53%,higher than any other competitive product.

12. ABOUT MMBC
• A family-owned business which brewing bitter-tasting beer Brewed one beer – Mountain Man
Lager, also known as West Virginia’s beer Mountain Man Lager's brand equity is a key Popular
among blue-collar workers
• Strong brand
• Top market position in premium segments
• Popular among blue collar working man

13. ABOUT THE CASE
• Chris Prangel has returned home to manage the marketing operations of Mountain Man Brewing
Company (MMBC) Experiencing
• Declining sales for the first time in its history due to changes in beer drinkers' taste preferences
• Want to launch Mountain Man Light, a"light beer” attracting younger drinkers

14. TIMELINE
1925-Founded by
Guntar Prangel
1960s-MM Lager’s
entrenched throughout
East Central US
2005-Selling over
520,000barrelsGenerat
ing revenues over $50
million–down 2%Top
market position Best
Beer in West Virginia;
for its 8 year straight
Best Beer in Indiana
Winner of America’s
Championship Lager
2006-Oscar
Prangel retired
Taken over by
Chris Prangel
wanted to launch
MountainMan
Light

15. PORTER FIVE FORCE MODEL
Rivalry
Competition
Threat of
new
Entrants
Buyer
Power
Threat of
Substitutes
Supplier
Power
Local Beer & craft beer Lots of big
& famous competitor Customer
loyalty of product competitor
Local & Import Beer
WineSpirits
Price Sensitivity
Product Undifferentiated
Lots of supplier (raw
material) Low
switching cost

16. “THE BEER MARKET IS MATURED, THE
REVENUE IS DYNAMIC” PERCEPTUAL MAPS
The Occasions being celebrated vs
Quality among competitors
• The occasion being celebrated
Brand awareness vs Price among competitors
• Brand Awareness
 Import beer
 Specialty Brewers
 Major Domestic
producers
 MMBCQuality
 Second-tier domestic producers
 Major Domestic producers
 Import beer
 Specialty Brewers
 Second-tier domestic producers
 MMBC

17. CONT…
Taste vs Local Authenticity among Competitors
 MMBC
 Specialty Brewers
 Import beer
 Major domestic producers
 Second tier domestic producers
Local Authenticity

18. COMPETITION

19. SWOT ANALYSIS
•Ageing target market
•Declining per capita beer consumption
•Profit orientation distributors and
retailors
•Changing demographics
•Competitors financial resources
• Growing light beer market
• New potential target market
• Brand recognition among
youths
• Expanding sales channel
• Single revenue driver
• Narrow target market with
relatively small customer
lifetime value
• Limited financial resources
•Brand awareness
•Loyal customers
•High perceived quality
•Strong market presence
strength weakness
threatopportunities

20. MARKETING MIX
Trendy name
Clear
bottle
product
Differentiated
labeling
Launch the
beer under
the name of
mountain
man to
leverage on it

21. CONT…
price
Same price
should be
applied on
every premise
location

22. CONT…
Larger will
be continue
to be sold at
off-premises
Light beer will
be distributed
at on-
premises
PLACE

23. CONT…
PROMOTION
Separate
promotion
for light and
dark beer

24. SITUATION IN 2005
• Since 2001,U.S. per capita beer consumption declined by 2.3%.West Virginia repealed arcane laws,
thereby resulting in large discounts being given and smaller brands being neglected.
• Change in beer drinker preferences. The light beer category was steadily gaining market share
accounting for more than 50% in 2005
• Younger consumers preferred light beer and they constituted the key consumer segment for beer
companies.
• Mountain man’s 2005 revenues were down 2% relative to the prior fiscal year.

25. DECISIONS TO BE MADE
• Try to revive the company’s
fortunes through the lager brand.
• Introduce a lighter version of the
lager brand under a new name.
• Introduce the brand extension as
Mountain Man Light.
Current Image
West Virginia’s
Beer
Working Man’s
Beer
Toughness
Independent
Brewery
New Target
Segment
Active
Adventurous
Hard-Working
Health Conscious New Image
Quality “Working
Man’s Beer”
Independent
Brewery
Active
Adventurous
Health Conscious

26. OBJECTIVES, MARKETING & ADVERTISING
• To find out whether it is economically feasible and sustainable to launch Mountain Man Light.
• To market new products efficiently in order to compensate for losses in core product sector.
• To develop with changing preferences without affecting its loyal customer base.
• Grass Root Focus
– More effective for region
– Event promotion(Light Product)
• Expand On-Premise location to add light products and additional larger sales
• EMERSON campaign
– Brand Centric
– Underscores image/values
• Viral ads(Heavy Focus)
• Radio ads
• Print ads

27. STATUS QUO STRATEGY
• Single Product Centric. No risk of cannibalization.
• However, not feasible to attract new customers and increase brand loyalty.
• Consumer base degrading in this already shrinking beer industry.
• Steady loss in revenues by 2% every year.
• Strong competition.
• Therefore ,maintaining status quo is not a viable option, it is like a time bomb which will eventually
render the company out of business.

28. CHALLENGES AHEAD
• Was important to change to lighter beer.
• Light beer was a newer, fast-growing product category.
• Oscar Prangel was concerned that launching Mountain Man Light would affect the previous brand
positioning
• Mountain Man Light might cannibalize the sales of Mountain Man Lager as retailers would prefer
other big brands for placing product on shelves.
• Presence of high competition.
• Capital Intensive competitor has large distribution channels and surviving capabilities in market.

29. CHRIS DECISION
• Chris examined the financial projections which showed revenue growth of the light beer product at 4%
annually.
• Reason being:
– Target audience is of age: 21-27 years (27% of total beer consumers, which constitute 13% of adult
population & the number was constantly growing)
– The Demographic was considered as “The first time drinker”
– Youngsters were not loyal to brand
– Spend twice as much per capita on alcoholic beverages than older consumers
– They preferred light beer, which increases the number of beer consumed
– While purchasing consider they consider factor like: taste, price, occasions, received quality, brand
image, tradition, local authenticity

30. CHRIS DECISION CONT’D…
• Mountain Man will capture younger generation of drinkers who constitute 27% of total beer
consumers
• As these customers are not loyal to any brand yet, Mountain Man can turn them into company’s
loyal ones
• As the brand awareness increases, more distributors will be interested to carry Mountain Man brand
• Having a substantial regional position, Mountain Man will have a capacity to compete in the
national market
• Expanding market share will bring company growing market share, high competitive market
position, and constantly increasing revenue

31. CONCLUSION
• MMBC’s target segment is maturing without expanding.
• Light beer market is getting more and more important.
• The company should launch a light beer with differentiated marketmix to increase its sales and
profit.