Mountain Man Brewing Co

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School

University Of Georgia *

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Course

4900

Subject

Marketing

Date

Feb 20, 2024

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pdf

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Uploaded by SuperHumanFly3798

Kaleb Thibodeaux MARK 4900 Q1) Looking at the BCG Matrix, Mountain Man Lager Beer would be positioned as a “Cash Cow” due to its substantial market share in a slow growing segment. Mountain Man Lager has built a strong reputation in the region over the last fifty years and maintains a high market share in most states where MMBC distributes their products. However, this segment has been experiencing a decline in per capita beer consumption and continues to see an increase in competition from wine, spirits and light beers. Light beer sales have grown consistently over the last few years, while traditional premium beer sales have seen a steady decline. Therefore, despite MMBC being a well established product with a loyal consumer base, the market for premium beers continues to decline. Q2) The 4 most important reasons why Chris anticipates that the revenues of the company will continue to decline: 1. Aging Consumer Base: Mountain Man Lager is known for having a strong flavor and high alcohol content, which is preferred by their core audience (older men). However, their primary consumers are aging, and the brand is struggling to attract younger drinkers that view Mountain Man Lager as a beer for the older generation. This demographic 2. Growth of Light Beer Category: With product preferences in the beer market changing and the light beer product category growing fast, Chris believed that adding a light beer product was important to MMBC’s future. The shift in these consumer preferences directly impacts MMBC’s revenue stream and if they do not address these trends then the company will continue to decline. 3. Competitive Pressure: The beer market in the Eastern Central Region has become increasingly competitive. Large national brewers are exerting high pressure on the smaller regional brewers, such as MMBC. These big companies control a high percentage of the beer shipments in the region and possess a higher advertising budget, adding to the challenges that MMBC might face trying to compete with these larger companies down the road. 4. Declining/Low Margins: Some states in the East Central region have seen an increase in competition. West Virginia recently repealed arcane laws that harshly limited the promotion of beer in retail stores. Distributors and retailers were forced to pay more attention to turnover and margins, causing distributors to become more discriminating about which smaller brands they carry. Furthermore, it would cost an additional $4.69 per barrel to produce Mountain Man Light, which would lower MMBC’s profit margins per barrel even more if they decide to tap into the light beer market. Q3A) 3 Critical Strengths of Mountain Man Entering the Light Beer Market: 1. Brand Loyalty: MMBC is known for having a very well-established brand and loyal customer base, which could provide a good foundation for the brand extension. The loyalty from its core audience and high brand recognition could offer a significant

competitive advantage and attract loyal Mountain Man Lager consumers to their Mountain Man Light product. 2. Expanding Light Beer Market: A report in the case highlights the growth of light beer in the market, drawing the attention of younger drinkers and women. Tapping into this market and expanding their product line could be an opportunity for MMBC to expand their reach and cater to the preferences of these groups. 3. Perception of Quality: MMBC has a long history of quality and brewing expertise, which could serve as an asset to the company as they leverage these qualities to promote their Mountain Man Light. Q3A) 3 Critical Weaknesses of Mountain Man Entering the Light Beer Market: 1. Competitive Market: Mountain Man lacks experience and expertise in the light beer market and the segment is already filled with established brands with high market share in the East Central Region (Exhibit 6A). It would be hard for MMBC to compete with these larger light brew brands that sustain distribution and support advertising in ways that Mountain Man cannot. Furthermore, these bigger companies are constantly introducing new brand name products in the market, making it harder to grab market share. Fader believes that Mountain Man Light would “get lost in the sea of new-product introductions”. 2. Brand Image Mismatch: Mountain Man Lager was known as “West Virginia’s Beer” and the core attributes of the Mountain Man brand are “authenticity, quality, and toughness”. However, a consumer study from the case highlights that the many younger, light beer drinkers rated high in awareness of the brand, but were not purchasing their lager. The younger demographic that this market segment serves views the Mountain Man brand as a drink of choice for the “swing” and baby boomer generation. They don’t like to purchase from corporate companies and many young drinkers are turned away from Mountain Man Lager due to its high alcohol content and strong flavor. Therefore, introducing a light beer product extension to target this younger audience could dilute the brand image associated with their core attributes. 3. Cannibalization Risk: By entering the light beer market, MMBC runs the risk of diverting customers from their core Mountain Man Lager, which could lead to an even greater decline to the company’s revenue. Members of the MMBC management team were concerned that retailers would not grant shelf space and the sales of Mountain Man Light would have to compensate for the potential loss of their lager product revenue.

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