Beer and Man Brewing Company

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Managerial Analysis
Mountain Man Brewing Company Goes “Light”

12/13/2010
Mountain Man Brewing Company
Nicole Fiamingo

Company History
Mountain Man Brewing Company was established in 1925, and since then has come to be known as “West Virginia’s Beer”. In 2005, despite a 2% drop in annual sales they sold approximately 520,000 barrels and reported revenue close to $50,000,000.

Mountain Man Brewing Company’s average consumer is male, above the age of 45 and typically in the middle-to-lower income bracket. With a small number of Mountain Man Brewing Company’s consumers making up a large percent of their sales, it is important for the company to appeal to that small number of consumers, and ensure they are satisfaction to their brand loyal.

Competition: Recently, the state of West Virginia repealed the arcane law; allowing retail stores to sell beer at discount prices. This creates pressure on old school regional breweries, like Mountain Man Brewery Company, to try and compete with the “top-dogs” of the industry.

Future of the Beer Industry: As beer sales are not largely affected by economic downturns, Sales are however, affected by change in consumer (taste) demand.

Current demand: In 2005 light beer accounted for over 50% of total beer sales; putting pressure on Mountain Man Brewery to introduce a light beer line into the market ( or make some other change), in order to remain profitable.

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...
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