MOUNTAIN MOUNTAIN MAN BREWING COMPANY COMPANY CASE ANALYSIS ANALYSIS
Group 2
ANSHUL SETH-IPM2011014 CLINTON THOMAS-2014PGP094 INDRANIL CHAKRABORTY -2014PGP1! KARAN DE"-2014PGP1## PATNI SAPNA RA"INDRA2014PGP2#1 SUNEET BADLA-2014PGP$4 "AIDA HEMACHANDAR2014PGP410
CASE %ACTS& •
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Guntar Prangel founded the Mountain Man Beer Company (MMBC) in 1925. Chris Prangel, an MB graduate returned home to manage the mar!eting operations of MMBC and had to inherit this family o"ned Business in #$e years MMBC %re"ed one %eer M&'* M +G- , also !no"n as est /irginia0s Beer he ompany0s ompany0s sales had eperien eperiened ed a '()*+,( for the 3irst time in 244 Chris "anted to launh M&'* M +*G6 in hope of attrating younger drin!ers to the %rand L+./ ((r sales in '7 had %een ro+, at a Compounded annual rate of 4 Tr3'+/+o,3* B((r 3*( r('u)(' %y 4 annually MMBC "as a reputed ompany throughout the east entral region of '7 *n est /irginia, it had held top position among lagers he sole %rand %rand loyalty rate for Mountain Mountain Man +ager "as "as 58 "hih "as higher than the rates of ompetiti$e produts suh as Bud"eiser at :2, and Bud +ight at 8 By 2445 Mountain Man generated re$enues of ;54::4444 and sold o$er 524444 %arrels of Mountain Man +ager thus S(**+, pr+)(5 3rr(* 6 798 Prie "as ;2.25 for 12
for ? th year straight, "on Best Beer in *ndiana and "as seleted as =meria0s hampionship lager> at the merian Beer Championship he %rand "as "as po+/+o,(' "ith its Core drin!ers<%lue ollar, middle to lo"er inome men o$er age :5 and "as a%le to mil! the %rand loyalty %eause of its @uality and uni@ue taste. hey had a patented formula "hih had its distinti$e @uality, %itter Aa$or, slightly higher than a$erage alohol ontent and ompetiti$e prie "hih appealed to the :5 men. espite the strong %rand and strategi position that MMBC reated, the ompany eperiened a deline in re$enue re$enue of 2 in 2445. he deline is due to hanges in %eer drin!ing patterns, mar!ets, and demographis in the region as "ell as the '.7. in general.
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his "as due to ompetition ompetition from "ine "ine and spirits spirits as "ell as ne" national health reommendations to derease alohol onsumption for impro$ed health. his mo$ement of onsumer purhasing pratie, ma!es adding a light %eer produt attrati$e.
KEYS TO SUCCESS O% BRAND MMB LAGER
1. Media ampaign ampaign 6ighlighting 6ighlighting it as as est est /irginia0s /irginia0s %rand, %rand, made "ith "ith "est /irginia0s la%or and apital, to reate regional loyalty for the %rand 2. Duality
THE 4C:S O% MARKETING& MARKETING& Cu/o;(r& • •
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he %eer industry industry in '7 generates generates ; 5 Billion in in annual sales. sales. aste, aste, prie, oasion, oasion, perei$ed perei$ed @uality, @uality, %rand %rand image, tradition tradition and and authentiity is "hat ustomers %ase their hoie on. astern Central -egion represents ;18 %illion in annual sales out of ;5%illion. ?1 of Mountain Man0s onsumers are male drin!ers. he target target segment of of MMB+ has %een %een %lue<ollar, %lue<ollar, middle middle to lo"er inome men o$er age :5. hile their target ustomer %rings them the fous and loyalty needed to %uild %rand a"areness and e@uity, MMB+ doesn0t target other mar!et segments suh as the "hite<ollar lass and other potential nihes. Brand +oyalty -ate for Mountain Man +ager is 58 "hih is greater than that of the ompetitors.
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Competitors for Mountain Man are nheuser Bush, Miller %re"ing Co. and dolf Coors possessing : mar!et share of the o$erall %re"ing mar!et. hese three three ompanies ompanies ha$e ?:mar! ?:mar!et et share in in the light %eer %eer mar!et. hey rely rely hea$ily on on traditional traditional ad$ertising ad$ertising as "ell produt produt di$ersi#ation to reate %arriers of entry for other %rands.
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Mountain Man Bre"ing Company has re$enues of o$er ;54 million. *t "as founded in 1925 %y Guntar Prangel "ho esta%lished itself as a premium domesti @uality %eer !no"n for its Aa$or and %itter taste. &sar Prangel, the retired president and o"ner, foused on maintaining the @uality and ser$ing a spei# mar!et nihe %uilding %rand e@uity among %lue<ollar, middle
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A =UALITI" ITI"E E ANA ANALYSIS E>TERNAL %ACTORS&
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THE
s r e m o t s u C r a l l o C e u l B t n a 1 # i n g i 7 r o t 1 e 7 m u i m e r P n i n o i t i s o p p o ) H s s e n h g u o ) a i n i g r i / t s e . H e u @ i n ' a d n a y t i l a u D , y t i 1 i t n e h t u y t l a y o l d n a r % h g i 6 n o i t i n g o 1 e r l a 1 o l d n a s s e n e r a " a d n a r % h g i 6
POS POSSIBL IBLE
INTE INTER RNAL
AND
WEAKNES S 7mall arget Customers (ludes #rst time drin!ers and "omen) &nly one produt Presene in only ast -egion 2 derease in -e$enue 7een as lo" inome %lue ollar %eer
S H T G N E R T S 7&
+I7* S T A E R H T 7 Changing Consumer
aste Preferene aste Preferene 7ta%le Mar!et ntry of +ight Beer 3emale arget Customer
OPPORTUN ITY
e s a % r e m o t s u C g n i ! n i r h 7 d n a g n i g n o i t u l i d n a r B e l a 1 s r e l l a m s a s a l a n o i t a n e t e p m o 1 o t d r a 6 s n r e 1 n o C h t l a e 6 d e s a e r 1 n * e r a h s t e ! r a M g n i " o r g y l i d a e t s r e e B t h g i +
PRESSING =UESTIONS %ACING THE %UTURE AND SUSTAINABILITY O% MMBC& =UESTIONS • • •
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Can pro#ta%ility %e sustained "ith Mountain Man +agerJ hether Mountain Man should launh the ne" %rand in the mar!etJ *f Mountain Man +ight is launhed, "ill it anni%aliKe the eisting %randJ oes the ne" %rand aFet the sales of eisting %rand i.e. Mountain Man +agerJ ill Mountain Man %e a%le to retain its loyal ustomersJ ISSUES Mountain ManLs re$enue delined %y 2 in 2445 and this slope "ill hallenge the ompany0s a%ility to remain pro#ta%le 3irst time drin!er segment represented 18 of the adult population in 2445,%ut aounted for more than 2 of total %eer onsumption and "as gro"ing +ight %eer ategory has %een gaining mar!et share and aounted for 54.: of $olume sales in 2445, ompared to 29.? in 2441 -egional re$enue gro"th of the light %eer produt is epeted to %e : annually Mountain Man steadily gro"ing its share of the regional light %eer mar!et %y a @uarter of a perent eah year oF of a 244 %ase mar!et share of 4.25 *mpat of Mountain Man +ight on sales of Mountain Man +ager and onern that launhing Mountain Man +ight might alienate the ore ustomer %ase
MARKETING STRATEGY& THE THREE TRACKS %OR MMBC& •
Continuing with the original product LAGER in spite of the delining re$enues and pro#ts. here is no threat of anni% anni%al aliKa iKatio tion n and and has has high higher er margi margins, ns, ho"e ho"e$er $er the the grap graph h sho"s the Pro#t after ta for MMBC lager starting from year 2445. nd it "ill lead to "astage of apaity of prodution eah year and restrit target mar!et "hih is at a ris! of depletion. here is also a potential potential ris! of losing mar!et mar!et share in long run. Graph gi$es a fair idea that the produt is not sustaina%le and is at its maturity stage %eause of the steep fall in pro#ts, thus it is not a $ia%le option.
PAT :,444,444.44 P
8,444,444.44 2,444,444.44 1,444,444.44 < 1
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INTRODUCING LIGHT AND REMO"ING LAGER& *nitially there are losses %ut aording to the epeted gro"th rate it is e$ident from the graph that +ight pro#ts are multiplying o$er years gi$ing an unpreedented gro"th of almost 144 per year. 6o"e$er if "e remo$e lager from the mar!et, the ompany "on0t %e a%le to sustain at all and "ill ollapse sine there are losses. hus onsidering onsidering lagerlight lagerlight as an option %eomes %eomes more more feasi%le and logial.
PAT :,444,444 8,444,444
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2,444,444 1,444,444 4 <1,444,444
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C3*)u*3/+o, o? Br(3@ E(, Po+,/&
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7elling Cost of 1 Barrel /aria%le ost (Manufaturing) of 1 Barrel Pro#t Margin 3ied Cost inurred (7G Cost d$ertising
;9.44 ;1.2 .2 ;2:.58
Cost) Brea! $en Point of o of Barrels eeded to
;1,54,444.44
%e sold
::2?.44 Barrels
3rom the nalysis, it is possi%le to attain BP sales "ithin 2 years as proNeted sales of Mountain man light is around 15444 %arrels. Gro"th of mar!et share of Mountain man light rises %y only 4.25. 7o, d$ertising osts ould %e inreased and pro#t margin an %e le$eraged upon. he ore produ produt, t, mountain mountain man lager lager should not not %e sidelined. sidelined. he retailers retailers should %e %e gi$en higher higher margins margins in order order to gain more shelf spae. *n the long run, it "ould %e ad$isa%le to etend the produt line. *n the onlusion, "e used the %rea!e$en analysis to realiKe that in the #rst year epeted light %eer sales falls short of the %rea!e$en and there is loss for Mountain Man +ight0s #rst year. 6o"e$er, as sales inrease, and startup #ed osts derease, Mountain Man +ight "ill pro$e to a pro#ta%le in$estment deision for the ompany.
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INTRODUCING LIGHT AND CONTINUING WITH LAGER E *nitially the %rand LAGER "ill eperiene a anni%aliKation of 12.5 "hih "ill deline o$er the years sine the ompany "ill %e a%le to de#ne the segments more eOiently and redue the anni%aliKation through thorough mar!eting eForts. 3rom 3rom the graph one an onlude that due to the introdution of ne" produt and anni%aliKation the pro#ts deline initially %ut doesn0t lead to losses. nd o$er the years, the pro#ts inrease and the ompany "ill %e a%le to ope "ith the initial Ner!s and sta%iliKe its performane o$er the years. lso another option is remo$ing +ager from the line of produts after
PAT 5444444 :444444
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8444444 2444444 1444444 4 1
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CONCLUSION 3,' SUGGESTIONS&
By BP analysis and proNeting the epeted re$enue and pro#ts in net fe" years, "e o%ser$e that the %est mar!eting strategy for Mountain Man Bre"ing Company is introduing the ne" produt that is Mountain Man +ight0 and ontinuing "ith Mountain main +ager along "ith it. 6o"e$er another name an %e used to protet the %rand image of %eing a tough
man0s drin!. lso steps should %e ta!en in future to segment the t"o produts properly so as to redue anni%aliKation and retain the +ager mar!et. lso it is highly unli!ely that the mar!et share of +ight "ill dou%le e$ery year, thus Chris should start loo!ing at other options and also try to ontrol its high spending on the +ager. lso gi$en the %rand e@uity the ompany should try to tie up "ith restaurant hains and inrease its reah in diFerent areas of mar!et.
