Marketing in High-Tech
Mountain Man Brewing Case Study
Factors that enabled Mountain Man Brewing Company (MMBC) to create such a strong brand
They are staying focused on where they originally began. The choice not to get distracted by other competing markets has allowed MMBC to continue to grow with their customers and meet their customers' needs without being spread across multiple areas.
MMBC hasn't adjusted for new shift in the consumer landscape as many of the industry observers agreed that the key segment was younger drinkers making up more than 27% of total beer consumption and was growing
They are staying focused on where they originally began. The choice not to get distracted by other competing markets has allowed MMBC to continue to grow with their customers and meet their customers' needs without being spread across multiple areas.
MMBC hasn't adjusted for new shift in the consumer landscape as many of the industry observers agreed that the key segment was younger drinkers making up more than 27% of total beer consumption and was growing
They are staying focused on where they originally began. The choice not to get distracted by other competing markets has allowed MMBC to continue to grow with their customers and meet their customers' needs without being spread across multiple areas.
Large domestic brewers were putting pressure on MMBC due to aging demographic in the shrinking premium segment and were spending heavily to maintain their sales levels in the premium segment.
Factors that made Mountain Man Brewing Company (MMBC) successful
The loyalty rate towards MMBC showed the highest loyalty rate (53%) compared to all their main competitors.
The large enough size of the market to support the business: Primary distributors are in Illinois, Indiana, Michigan, Ohio, and its native West Virginia, where MMBC has had the top market position in West Virginia for 50 years.
Never fail its core customers. Never been outdone by other companies’ markets and lost sight of its own core customers and values.
The meticulous formula. Guntar Prangel had reformulated an old family brew recipe creating a flavorful beer that set them apart from other lager/beer brands in the market.
Factors that made Mountain Man Brewing Company (MMBC) to decline
Changing business landscape and environment as increases in federal excise tax and overall health concerns were causing sales to drop.
Large domestic brewers were putting pressure on MMBC due to aging demographics in the shrinking premium segment and were spending heavily to maintain their sales levels in the premium segment.​
MMBC hasn’t adjusted for the new shift in the consumer landscape as many of the industry observers agreed that the key segment was younger drinkers making up more than 27% of total beer consumption and was growing.
5 Cs of Marketing
01
Company
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A popular brand which exclusively focuses on Beer production and marketing, which also happens to be a family recipe running as a legacy.
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A strength - Brand value and a fraction of loyal customer base.
02
Competition:
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Major domestic producers: Anheuser Busch, Miller Brewing Company, and Adolf Coors.
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Import beer companies
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The craft beer industry
03
Complementor:
Small scale beer industries, Restaurants, Marketing Media, Restropubs and other domestic distributors.
04
Customer:
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Their main focus was on the older working men (Over 35 years) who were loyal customers to the brand. But MMBC also considered to include light beer to attract the younger crowd. (21-27 years)
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The concern: Younger crowd was not staying loyal over time. Ranked very low as favorite amongst younger age range.
05
Context:
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Over the 6 years, light beer sales in the United States had been growing at a compound annual rate of 4%, while traditional premium beer sales had declined equally.
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Reposition the brand to drive sales of Mountain Man Light to young people without eroding the core brand equity of Mountain Man Lager.
Segmenting, Targeting and Positioning of the product
Segmentation
There are two segments for Mountain Man Beer Company (MMBC) customers:
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One is the blue-collar, middle-to-lower income men over age 45. The elder segment shows a strong favor for lagers, the flavorful, bitter-tasting beer
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The other is the young adults who always prefer to drink a light beer.
Targeting
MMBC targets the young adult segmentation by introducing its new light beer because, over the past six years, light beer sales in the United States had been growing at a compound annual rate of 4%, while traditional premium beer sales had declined annually by the same percentage.
Positioning
MMBC positions the Mountain Man Light as the light beer product to attract young adults' attention to the brand, while still keeping the Mountain Man Lager product line for its existing customers who show a strong loyalty toward MMBC.
4 Ps of Marketing
Product
Launch the light beer as a trial product in certain on-premise and off-premise stored and check the demand.
Price
Set the price of "Mountain Man Light" below the leading domestic light beer brands to attract attention. For example, set the price under 8.6 cents/fl oz, since this is the price of Bud Light who has 32.9 % of the market share.
Promotion
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Market research should be conducted to determine how consumers react to the new brand being introduced.
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Campaigns and events for the youngsters should be organized where the light beer would be shown so that the young people can have exposure to the new product.
Place
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Continue selling the "Mountain Man Lager" at off-premise stores.
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Introduce the "Mountain Man Light" beer on the on-premises like the bars and restaurants, for the younger people and women.
Pros and Cons of launching light beer
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Pros
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MMBC's customer segment opportunity by introducing a light beer can attract young customers and women customers.
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Light beer sales in the United States had been growing at a compound annual rate of 4%, so the opportunity to boost sales of MMBC as a whole is there.
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This will allow MMBC to gain more space in restaurants and bars.
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Will diversify the products that MMBC has and balance the company's risk.
Cons
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​​Mountain Man Light might cannibalize the sales of Mountain Man Lager because of a fear that retailers would not grant Mountain Man incremental shelf space and, therefore, would substitute cases of light product for the lager product.
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It could hurt brand loyalty and therefore lose the core loyal customers and crush the business.
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Not having a significant market share, as major brands in the light beer category already have substantial marketing and advertising.
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Introducing a light beer would need significant investment for advertisement, marketing, packaging, and so on.
Recommendations
Mountain Man should try to produce Mountain Man Light. Because the demand for Mountain Man Lager is now in a downward curve. Although it has a loyal customer group, it has no positive growth. Also, its market is slowly occupied by other competitors. It needs to enter the mainstream market and attract more users by drawing a new segment or launching a new product category.
Based on the results of the break-even analysis we can know that after taking into account the cannibalization and other losses, the amount of Mountain Man Light that needs to be sold to reach equilibrium is small, about 22% of Mountain Man Lager sales, which is a target that can be easily reached.
By considering the qualitative analysis, we can deduce that, with the significant collaboration with external resources, different marketing strategies and already existing brand value, Mountain Man definitely up their game and reach the expected target in around a year.
Detailed Report