Date post: | 12-Apr-2017 |
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Mountain Man - Brewing Company‘Bringing The Brand To Light’
Harvard Business School Case(Case Study)
Mountain Man, Huh??
Hierarchy •Chris Prangel ( Managing marketing operations, heir for the company )•Oscar Prangel ( Founder and President )•John Fader (Vice President )Domain•Premium Beer•West Virginia Market leader•Off premise locations•Blue collar workers ( above 35 )
Current Situation•Mature family business, 80 years old•Quality beer brand perception, old family recipe•2% downfall in revenue relative to prior fiscal year
Worth a try??
Brand Attributes
Points of Parity Smooth
DrinkableWater percentage
YAY!!
Market Analysis
Pitfalls•Decline in US per capita beer consumption since 2001 ( 18.3% )•Increase in federal excise tax•Initiatives and increasing health concerns•Competition from wine and spirit based drinks
Opportunities
•Rise in sales of light beer drink since 1999 ( 4% annually )•Targeting new segment of customers ( age 20-30 )•Only few competitors left in market for beer
Market Research ResultsBlue collar most loyal customer and largest segment in consumer market
Good awareness among young generation but preferred light beer drinks
Grass root marketing most effective
Push strategy helpful for brand
So??
Managerial questionsShould the light beer be launched
to reposition the brand?
Must the expansion be in line or with a new brand name?
Would it cannibalize or corrode the original brand?
Can it sustain itself among strong competitors ?
Alternatives??
Alternative 1 – Don’t launch light beer
AdvantagesOriginal brand name remains
untouched
Target customers do not feel alienated
No new load on company to recruit more forces and resources for marketing operations
Alternative II – Launch light beer under brand name
AdvantagesMoney and resources required for market operations will be lesser
Sales might increaseExpansion of brand in a new market
segment
Alternative III- launch light beer under new brand name
AdvantagesOriginal brand name remains
untouched
Increase in sales with new customer segment in market
Expansion of sales to on premise locations
Chris’ Analysis
• Assumption – 2% annual revenue loss till 2010
• Regional revenue growth of mountain man light 4% annually.
• Mountain man shall steadily grow its share of regional beer market at rate of 0.25% of total regional market share annually.
Oscar’s View• Targeting new segment of customer will alienate the existing segment of blue
collar workers.
• Mountain man shall never achieve the same loyalty among the new younger customers.
• The core brand equity shall get eroded
• Mountain man still stands and survives due to its great brand name.
• A fatal decision might dilute the brand name.
John Fader’s Judgement• Mountain man light cant match distribution and advertising of
already existing market leaders.
• The brand shall get lost in the sea of new product introductions.
• Mountain Man Light shall just replace facing they have earned for Mountain Man Lager
• Light beer shall draw huge time, revenue, resources and attention of original brand.
“Boosting sales of our core brand even slightly means more than what we will get in the light beer segment. It’s a pipedream, Chris”
Conclusion
• Mountain man beer light ‘SHOULD NOT’ be launched.
• Calculations of Chris are overly optimistic.
• Light beer market offers tremendous competition.
• Entering it will only dilute original brand and pressurise company.
Conclusion• Since many breweries have shut down already, its good chance
for Mountain Man Lager to succeed at other places.
• As Oscar said, the Brand already has a strong name which will help it survive the struggle.
• After a period of 5 years of analysis, Mountain Man Light must be launched if revenue continues to decline. In my opinion, at some point they shall stop declining
• The core brand must be concentrated on and improved upon.
DisclaimerThis presentation was created by Akhil Kumar Pathak, DTU New Delhi, during an internship under guidance of Prof Sameer Mathur, IIM Lucknow. (www.iiminternship.com )