What is Chris considering doing and what factors have to align to be successful? What goals should he have?
Ans. Chris Prangel, the head of the marketing operations at the Mountain Man Beer Company wanted to launch Mountain Man Light, a light beer formulation of Mountain Man Lager with the hope of attracting younger consumers to the brand. Chris wanted to do this because:-
a) In the previous 6 years the light Beer sales in USA has been growing at compound annual growth rate of 4% while traditional premium beer sales have been declining at the same rate.
b) Mountain Man beer's prime product was Mountain Man Lager a premium beer which could suffer the same fate as the other premium beer brands.
For his venture to be successful the following factors needed to fall into place:-
1) Chris assumed that the popularity of Mountain Man Lager would reinforce the sales and brand value of Mountain Man Light and in turn it would reinforce the sales of Mountain Man Lager.
2) The light beer industry share for USA was 50.4% of the total beer market and if Mountain Beer Light was introduced there was a chance that the Premium Mountain Man Light customer base would be alienated and this would lead to the brand erosion of Mountain Man Lager. So for mountain beer light to be successful the brand needs to be promoted in such a way so that there is no cannibalization of the prime brand Mountain beer Lager.
3) Also the new light beer had to be promoted so that the retailers would provide substantial shelf space to the light beer.
4) If the project is carried out it would be done, under the assumption that Mountain Man Beer Light would generate a profit within a span of 2 years. The senior management needs to be convinced about this fact. The senior managers are sceptical about the success of this brand keeping in mind the aspects of brand dilution and cannibalization and extensive advertisement costs.
5) In case there is cannibalization of the Mountain beer lager brand then the sales of Mountain Man Beer Light needs to compensate for the losses incurred.
The goals should involve the formation an extensive market strategy keeping in mind the 4Ps of marketing:-
Product – The product should be superior in quality with respect to the present market competition in the light beer category.
Place – The product should be initially launched in the East Central region in regions where the parent brand Mountain Man premium consumption is less, viz places apart from the "heartland states".
Price – The product should be launched at a competitive Market price increase popularity and consumption.
Promotion –The Light beer from Mountain Man should be promoted under a separate brand name to prevent the Brand dilution and cannibalization of the Mountain Man Premium beer category. Grass root level promotion should be carried out to increase the customer awareness.
2. What are the key success factors of MMBC? How is MMBC different from its competitors? Ans. MMBC had a huge brand value in the East Central Region of the United States since 1960s. The key success factors of the company are as follows: 1.) Pricing strategy-
MMBC followed a competitive pricing strategy by setting its product’s price in tune with those of the premium domestic brands such as Miller Budweister and also below the specialty brands such as Sam Adams .The price for kept at $2.25 for a 12-ounce serving of draft beer in a bar and $4.99 for a six-pack in a local convenience store. 2.) Strong brand name and positioning-
Brand played an important role in purchase of beer by the consumers. The consumers check for the price, taste, the occasion of...
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