Mountain Man Brewery Company Case Analysis

3. What has made MMBC successful? What distinguishes it from competitors?
MMBC has various and compelling reason for the success. In terms of product
offering, it is considered as West Virginias Beer although it is a regional brewer. It
has superb name recognition. In addition, it has very strong brand position with
consumers favoring MM Lagers unique taste and quality ingredients from the family
recipe.
Brand Awareness was one of the core reasons for the success of MMBC. The brand
success was with blue collar consumers. The other keystone was the perception of
quality in Mountain Man Lager and the brand loyalty it grew. In terms of quality, the
attributes that defined the quality of Mountain Man, like its smoothness, percentage
of water content and drinkability and moreover, its better flavored and slightly
higher than average alcohol content made unique and contributed to companys
brand equity. Enlightening on the history of MMBC, its status is as an independent,
family owned brewery which creates an aura of authenticity. Besides this, MMBC has
the few core attributes which has been keys to success like authenticity, quality and
toughness of lager Beer.
The bequest of the company is its main distinguishing trait from its competitors.
Holding the title of West Virginias Beer allows MM Lager to have an ingrained
exposure to consumers in the region and act as a natural default for its blue collar
patrons. Finally, MMBC has a trained sales force that is very adept and getting its
product into the right channels to compete with national breweries
4. What factors enabled MMBC to create such strong BRAND?

Mountain Man has sustained its brand throughout the years as the best tasting beer
for the workingman since the 1920s. MMBC understands the importance of brand
management, and has focused on creating a high degree of brand awareness.
Research supports that Mountain Man was as recognizable as Chevrolet and John
Deere to their core customers. Mountain Man Lager is packaged in a brown bottle
with their original 1925 logo, a crew of coal miners. This supported the "toughness"
and "working man's" beer image.
To quote the Mission Statement, Mountain Man is still standing because we
manufacture an exceptional beer with a great brand name, weve never lost sight of
our core customer, and weve never been seduced by the other guys market.
MMBC stands for such unique qualities that have been the boilerplate for developing
an enriched brand with strong equity. For almost 50 years it held the top market
share for lagers of West Virginia in the majority of the states where it was
distributed distinguishing them in prime position among competitors. Research of

working-class males determined that MMBC was as recognizable as leading
manufacturers Chevrolet and John Deere in the East Central region. Besides
successful branding efforts in a large market, MM Lager was priced with an
extremely competitive Every Day Value below specialty brands, but above premium
domestic brands. This allowed for an aura of authenticity distinguishing it as higher
quality than Miller and Budweiser.
Another factor was the distribution of MMBC by establishing their own sales force
which didnt just push the brand; it uphold, focusing on one ultimate objective:
getting off-premises location to embrace Mountain Man.
5. What has caused MMBCs decline in spite of its strong brand?

With the change in the perception in the market, it faced stiffening competition, a
maturing market and new products which threaten to steal its customer base.
Added to this is the perception that Mountain Man is not, or cannot, change
alongside a changing market. Light beer is sweeping the consumer beer market,
and as Mountain Mans loyal customer base ages, it is failing to attract younger and
female drinkers with its current offering.
In 2001, U.S. per capita beer consumption has declined by 2.3% due to increasing
competition from wine and spirits-based drinks. MMBCs revenues are down 2%
relative to the prior fiscal year. The current state of the company and market
conditions suggests that a single product line may be unsustainable. As of 2005,
MMBC was the only major regional beer company to not expand beyond its flagship
lager product. A segment of the population was still interested in MMBC, but that
segment, while loyal, was aging. The rate at which MMBC was building new
consumers was only going to replace a fraction of their current buyers. Distributors
were discriminating about which smaller brands they would carry, and the
percentage of new consumers by age group was continuing to decrease.
There have also been few reasons that have been attributed to MMBCs decline
despite their strong brand. Increased taxes and fees to manufacturers have been
obvious in the rising retail costs of goods in the marketplace. Companies cannot
afford to absorb the added expenditures and therefore pass them on to the
consumer whom tends to buy less as prices increase; these increases are hitting
their pockets on the home front as well. In addition, the average consumer is
becoming much more health conscious and has made changes in their preference of
alcoholic beverage segment. Beer is very high in calories; for instance, as compared
to wine or spirits and decreasing caloric intake has been one of those fairly recent
health conscious changes being made. Beer lovers are sticking with their choice of
libation; however, substituting a light version of their favorite brand. With these
factors on the rise every day and the core demographic of MM Lager reaching an
age bracket were considerably less portions of income are dedicated to alcohol
purchases, the brewery has slowly lost market share to the larger domestic brewers
that have been fortunate enough to capital to invest on increased advertising and
marketing.
6. Should MMBC introduce a light beer?

With sales declining and seeking new areas of business growth, Chris Prangel, a
recent MBA graduate, is considering a campaign to launch MM Light. Light beer
sales in the U.S. have been growing at a compound annual rate of 4%, while
traditional premium beer sales, such as MM Lager, have declined by the same
percentage. The core age group for light beer drinkers is 25- 44 which extends
below the current core age group of MM Lager (men over the age of 45). Currently,
MM Lager has a 4-to-1 male-to-female ratio while the light beer category ratio is
roughly 3-to-2. Using current rates of decline with profit margin down 6.2% in 2005,
2010 sales of MM Lager will continue to decrease at the current rate of decline.
Given the current state of the beer industry, it is reasonable to project that the rate
of sales decline will continue to accelerate in the future. In 2005, MMBC was still
profitable and could afford to take on the costs of extending its product line;
however, each year that the company waited to do so jeopardized its ability to
afford new costs.
At first glance, there appears to be an obvious opportunity to expand the brand by
introducing a light beer to the market. The concern is that a light brew would
alienate the core customer base and erode the attributes that make MM a profitable
company. MM Light will add additional capital expenditures for plant and equipment
upgrades and could potentially hurt sales of the lager as brand loyalty may become
threatened. To arrive at a well-informed decision supported by strong financial
calculations, it is first necessary to perform a SWOT analysis.
While weaknesses and threats identified are serious, they are few in number when
compared to the many strengths and opportunities of expanding the MMBC product
line. Because 9.4% of the regions light beer production was captured by small
brewers, there are successes to be had in producing a light beer. In addition, light
beer is responsible for more than 50% of all beer sales in MMBCs East Central
region. Even a small percentage of the biggest market had the potential to be
valuable for MMBC.
Strength
Well-known brand and experience

Reputation; known as a quality
beer.
Enable to meet the needs of the
consumers.
Brand loyalty with a rate of 53% in
the East Central region
Weakness

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3. What has made MMBC successful? What distinguishes it from competitors?

4. What factors enabled MMBC to create such strong BRAND?

distributed distinguishing them in prime position among competitors. Research of

5. What has caused MMBCs decline in spite of its strong brand?

6. Should MMBC introduce a light beer?

Well-known brand and experience

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