MMBC; what has made this company so successful and what distinguishes it from competitors: •Brand Loyalty •Older working class, blue collar •Effective marketing •Sales team – “Grass roots” marketing •70% consumed at home •higher alcohol % Based on the numerical data and brand loyalty we could make a few financial assumptions. 1. Mountain Man Brewing Company will only be able to achieve . 15% of the light beer industry market share. 2. Mountain Man Brewing Company will spend $1,500,000 on advertising their new light beer in their first year.
3.In association with producing a light beer, Mountain Man Brewing Company will have an additional $69,000 in fixed expenses per year. 4. Mountain Man Brewing Company will be able to sell their light beer at $0. 29 per bottle. 5.
Mountain Man Light will not erode sales of Mountain Man Lager anytime in the near future. 6. All else will be help comparable to the current capital structure of Mountain Man Brewing Company. What may have caused MMBC’s decline in spite of its strong brand in terms of the beer market in general, as well as the market MMBC serves. •Alternate beverages •health concerns tax increases •Consumer changes/shift in tastes towards light beer •Limited distribution channels -shelf space •very competitive industry and capital intensive MMBC introducing a light beer could have some pros and cons: Pros – •Gaining younger demographics •Diverse product portfolio •May be MMBC could create a unique Light beer Cons – •Alienate existing customers •Dilute the existing brand equity in terms of image – particularly the brand stands for Lager with higher alcohol % •Decrease/ cannibalize shelf space.
•More expensive to produce •Light beer already has a strong presence.MMCB should target younger drinking aged adults at sporting events or venues. Especially some extreme sports events; example major concerts, this would be popular in this segment. Sponsoring events where young drinkers are found would increase the possibilities of marketing through word of mouth advertising after the event. It’s the most cost efficient way of advertising.
Moreover, the marketing campaign would need to maintain the “tough” standard its Lager created while reaching a younger audience. “Mountain Man Light: 21st century tough,” or” Mountain Man Light: 19th century tough. 1st Century tastes. ” Once an established market and or segment has been tapped in West Virginia light would need to make its way to other locales where Lager is already popular; Illinois, Ohio, Kentucky, etc. The main goal and or strategic approach is creating a light beer that tastes good, and inexpensive enough for younger drinkers to afford, while branding itself as a “cool” alternative to the same, boring light beers that have been around since dinosaurs existed. Finally, if they go with light beer with a different brand name, then think about financing – new brand, additional advertising etc.