Case Study

Mountain Man Brewing Company: Bringing The

Brand to Light
Ayan Sen
Shikhar Srivastava
Shirshadeb Majumder
Sreyash Rungta
Ruchir Jain
Pahuldeep Kaur
Somya Tiwari

INTRODUCTION

Gunter Prangel founded the Mountain Man Brewing company

in 1925.

It was situated in the New River coal region of West Virginia.

Popularly known as West Virginia's beer.

Mountain Man Lager was a reformulated family brew recipe.

By 1960's Mountain Man Lager was well respected and known

throughout the east central region.

By 2005 Mountain Man Beer Company was generating $50

million in revenue and selling over 520,000 barrels.

Present Situation & Dilemma

Chris Prangel a recent MBA graduate stood to inherit Mountain Man Brewing
Company.

MMBC was experiencing declining sale for the first time.

Light Beer Market was growing.

It was recorded that Light Beer had a growth of 4% annually over the last 6
years.

Should MMBC expand their horizon and get into this light beer market.

Why was Mountain Man a success?

It was a family owned business.

By 1960's Mountain Man Lager expanded to the east central region in spite of
being called West Virginia's beer.

It was a brew recipe using a meticulous selection of rare Bavarian Hops and
unusual strains of barely.

Flavourful bitter in taste, smoothness, percentage of water content and

slightly higher then average alcohol content.

It was packaged in a brown bottle with its original 1925 design of a crew of
coal miners printed in the front.

Higher than average alcohol content.

Customer Base

MMBC's customers values the brand authenticity.

Reputed among the blue-collar men.

Primary customers are low-income men over age 45.

Promotion of the brand

Relies heavily on brand loyalty & word of mouth.

Getting off premise locations like liquor stores and super markets. MMBC solds
70% of its bear for off premise consumption.

It was promoted mostly in retail stores located in east central U.S.

Decline in Sales

Growth in light beers sales which was 50.4% of market share in 2005
compared to 29.8% in 2001.

Increase in federal taxes.

Overall beer consumption declined by 2.3% since 2001.

Health awareness.

The key consumer in the market was young drinkers aged between 21 to 27.

PROS of launching Mountain Man Light

Beer

It was believed that new product introduced beer drinkers to both styles of bear
while simultaneously keeping them in the brand family.

Greater share space for the product and greater product focus among distributor
and retailers.

It will attract young drinkers between ages 21 to 27, hence the consumer market of
the brand will expand and Mountain Man was rated high in terms of awareness in
the youth.

Growth in light beers sales which was 50.4% of market share in 2005 compared to
29.8% in 2001.

It will be a different brand by the company.

The core brand name will be highlighted by creating a new beer.

Market research shows growth in light beer sales annually by 4%.

CONS of launching Mountain Man Light

Beer

Cost of Production & advertisement will increase.

Tough competition with brands like Miller Lite or Coors Light.

Alienate the current customer base.

Risk of harming the current brand image.

Cannibalize the sales of Mountain Man Lager.

New product will add to the cost structure, hence reduction of profit will
take place.

DECISION
The net profit projections Chris Developed, he assumed that Mountain Man Lager
lost 2% of its revenue base annually. But after examination of the financial
projects of the Mountain Man Light it was found out that regional revenue growth
of light beer is 4% annually. Hence Mountain Man will grow 0.25% every year with
the base year as 2006.
So I think with all the statistics kept in mind Chris should go ahead with this idea
and launch Mountain Man Light.