Mountain Man Beer Company - Case Analysis

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Case Analysis

Mountain Man Brewing Company:

Bringing the Brand to Light

Mountain Man Brewing Company (MMBC) was founded by Guntar Prangel in 1925. He reformulated an old family brew with quality ingredients, resulting in a flavorful bitter tasting beer which was launched as the Mountain Man Lager. The brand grew to claim a respectable market share for an independent-family-owned-brewery, in whole of the East Central United States by 1960. Even today, after 80 years, the lager is a legacy brew, awarded as the Best Beer in West Virginia for many years in a row.

MMBC is still a single product company and generates over $50 million in revenue and selling over 520,000 barrels of Mountain Man Lager. All has been well thus far but now the market trends are changing rapidly.

Problem Statement

For the first time in the 80+ years MMBC has experienced a 2 percent decline in revenue, relative to the prior fiscal year. Is this a one-time occurrence or a signal shift in the overall marketplace? Businesses must act in a certain manner in order to maximize profits or run the risk of losing their place in the marketplace.

Chris Prangel, son of the President and owner of MMBC, Oscar Prangel, is to inherit the business in only five years. With differing management styles and thoughts on the direction the organization should take, this uncertainty could be potentially crippling over time.

The question of whether or not MMBC should move ahead with Chris's plan to introduce a light beer product is the one that is most pertinent to the overall direction the company will take. The ever changing marketing environment with respect to demographic, socio-cultural, and political scenario will influence management’s decision on which path to take.

SWOT Analysis: Strengths

Mountain Man Lager has established a brand with a strong loyal blue –collar clientele. This high quality lager is known for its dark color, distinct bitter taste and slightly higher alcohol content. It boasts an unaided response rate of 67% from the adult population of WV and is known to be the best regional beer. In 2005, Mountain Man Lager won “Best Beer in West Virginia” for its eighth straight year. It also won “Best Beer in Indiana” and was selected as “America’s Championship Lager” at the American Beer Championship.

Research has shown blue-collar males purchase 60% of the beer they drink from off-premise locations. Currently MMBC sells 70% of its beer at off-premise locations which is quiet consistent with the industry wide sales. The lager is affordably priced for the middle-to-lower income “working man”, at $2.25 for a 12-ounce serving of draft beer in a bar and selling for $4.99 for a six-pack in a local convenience store.

Market research shows, Mountain Man’s position as an independent, family owned brewery provides a sense of “authenticity” with “anti-big-business” core drinkers. The brand is as recognizable in the East Central region as Chevrolet and John Deere. MMBC has proven to be successful in grass-root marketing with a sales force which is known to not just push the brand but influence customers to embrace Mountain Man and promote the brand by word of mouth.

Weaknesses:

MMBC is well known for their bitter tasting product. This has given them great success in the past, however with the changing market they need to conform to the new way of doing business if they wish to continue to succeed in the future. Having only one main beer that is sold in the East Central region of the United States makes it hard to maintain profits. MMBC has been experiencing a decline in their sales by nearly 2%.

MMBC has a very small demographic to which the lager appeals to. As such they are losing their influence over the younger market, as well as the women drinkers. The attractiveness of a bitter tasting lager doesn’t quite win...
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