Distinctive Products and Brand Equity
Guntar Prangel founded Mountain Man Brewing Company (MMBC) in 1925 with roots all the way from Bavaria. They distinctively use specialized hops and uncommon strains of barley to create a beer that has been described as “strong”, robust and flavorful. With revenues of $50 million in 2005, MMBC had sold 520,000 barrels of their larger to distributors in West Virginia, Illinois, Michigan, and Ohio. The brand mostly appealed to their core drinker segments that are blue collar, middle to lower income men who are over the age 45, which is different than other competitor’s market segments. Furthermore, they have a strong presence in their town as their grass root initiatives helped them develop a local
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Decline in Sales Beer consumption had declined by 2.3% due to the increased sales of wine and sprit drinks. Now people are aware of health concerns and the impact of high taxes on alcoholic beverages by the government. More than ever, beer is starting to appeal to younger drinkers between the ages of 21-27. These types of consumer have not yet developed any loyalty a specific brand and still have a high impact on the industry. Again, big name competitors took over market share with their larger distribution infrastructure. Furthermore, the trend of light beer grew in market share and grew to 50.4% of volume sales of barrels of beer. Market research conducted in conjunction with a focus group in this case futher showed these trends. Consumers make a selective purchase with deciding which beer to enjoy. They look at price, quality, brand image, local authenticity, tradition and taste. MMBC represented a tough beer primarily for older men who liked the rugged image of the brand. Younger, more fashion forward men did not like the taste of the lager and preferred something lighter. The competitive nature of the craft brewery industry should also be analyzed. With four different categories: brewpubs, microbreweries, regional craft breweries, and contract breweries, the availability of choices are varied. These are small-scale
One of the weaknesses to distributing Coors beer in the two counties is the competition of other domestic and microbrew beers. Although the consumer and retailer willingness to buy Coors beer is high, will they actually purchase Coors beer when it becomes available to them? The questionnaires have strong feedback for Coors beer in the Delaware counties but people may become biased by their customer loyalty to other beer brand. There is a big enough marker share for Coors to be implemented, but will Brownlow be able to succeed in this competitive industry.
h) The younger generation, mainly purchased beer at pubs and bars. MMBC had not been successful in targeting these markets for distribution and sales.
A documentary film made in 2009, Beer wars features and describes the American beer industry distinguishing between the large and small breweries. The large breweries feature some main corporate companies like Coors Brewing Company, Anheuser-Busch, and Miller Brewing Company whereas the small breweries include craft beer producers like Moonshot 69, Stone Brewing Company, Dogfish Head Brewery, Yuengling, and others. The documentary shows how the beer market is controlled through advertising and lobbying, which is harmful for the competition in the market. There is a reason why the small companies are falling behind and the large corporates are controlling the market, which in turn makes it essentially oligopoly economy.
2. MMBC is ignoring the shift in the consumer segment for beer companies. 21-27 year olds are spending more on liquor and most have not yet developed brand preference.
Executive Summary - Coors’ prominence in the beer industry has always been overshadowed by its bigger competitors like Budweiser, Miller and Molson, but new insights unearthed by this report may pave new roads for a more exciting future. The first part of our analysis describes the typical Coors drinker as an aged 25 to 44 male light beer drinker consuming almost seven bottles a week. He also works in a managerial or professional occupation earning over $30,000 annually. Coors’ three competitors also exhibit a similar consumer base with the exception of Molson being predominantly regular beer consumers. These conclusions are tested to be statistically significant.
C) The key consumer segment is the younger drinker who aged 21 to 27. They were first time drinker that not founded loyalty to any brand yet accounted for large beer consumption. The segment tended to purchase more light beer instead of lager.
In order to grow, Boston Beer must continue to increase its market share in the overall beer market. The market continues to be dominated by the large scale breweries like Anheuser Busch, Adolph Coors Co, and Miller Brewing Co. Craft Breweries are beginning to increase their share in the overall market. It is expected that craft breweries will account for 5% of the overall beer market in 2000, up from 1.4%. However, there is increased competition in the craft beer market. There were 165 new craft brewers in 1994. This increased the total of craft breweries in the US to 750. Boston Beer will be competing with these 750 breweries for 5% of the 5 billion in US beer revenues.
Mountain Man Lager is currently offered by MMBC and is considered a premium beer product. Lager beer is generally seen to be in the mature stage of the product life cycle, and this carries implications for MMBC in terms of proposing appropriate measures to address the declining sales of its
Microbrewers should concentrate more on the following attributes of the beer: quality, freshness, distinctiveness and variety of product offers, in order to gain more customers.
The brewing industry was once held to competition among many breweries in small geographic areas. That was almost a century ago. The U.S. brewing industry today is characterized by the dominance of three brewers, which I will talk about in this paper. There are many factors today that make the beer industry an oligopoly. Such factors include various advancements in technology (packaging, shipping and production), takeovers and mergers, economies of scale, barriers to entry, high concentration, and many other factors that I will cover in this paper. Over the course of the paper I will try to define an oligopoly, give a brief history of the brewing industry, and finally to show how the brewing industry today is an
Within the craft beer market, consumers have many products to chose. A product is anything offered within a market that which fulfills a want or need (Armstrong & Kotler, 2015). In 2012, over 1,750 breweries operated in the United States (U.S.), with over 1,920 the following year (Brewers,
In order to stay competitive in the beer market, MMBC can introduce a new product under the same brand. As MMBC has been producing only one beer, MM Lager, which is more appealing to older consumers, MMBC can introduce MM Light to target new market segmentation, the younger consumers. “Over the past six years, light beer sales in the U.S. had been growing at a compound annual rate of 4%” (Adelli, 2007). The light beer is equally popular among men and women, especially in their 20’s. These consumers are mostly first-time drinkers who have no brand loyalty yet. They will keep on trying any beer to find the best one, and MM Light might be the one. This younger consumer segment is accounted for more than 27% beer consumption and is still growing; they also spent twice on alcoholic beverage than consumers aged above 35. MM Light can increase MMBC total sales as it appeals to more consumers, MMBC beers can serve consumers across all age groups with these two beers, MM Lager and MM Light. As the target market for the light beer, younger consumers and women, frequently visit on-premise location, MM Light can help MMBC gain recognition in on-premise locations. Besides that, producing a new product under the same brand will help in reducing the cost and as more people begin to know the MM Light, MMBC can get more recognition and results in boosting MM Lager popularity and sales.
Problem identification: The global beer industry was experiencing increasing competition due to the new and potential mergers and acquisitions of
Boston Beer Company (BBC) has enjoyed much success with their craft beers with Samuel Adams as their main focus. Being the leader of this segment, overtopping five of their competitors combined (Exhibit 1), the company now must decide how to take advantage of the light beer market. Boston Lightship, their current light beer, had been a small contributor in BBC’s product line. Currently, it is facing dwindling sales with product volumes down from 12 000 cases per month to 3000 cases per month.
Although sales of premium brands have fallen in a steady response to the growing popularity of the craft beer. The industry revenue has been stable over the past 5 years. As a result, from 2011 to 2016 the industry revenue is expected an increase and growth annually at 6.7 percent over the five years,with a total of $39.5 billion . (IBISWorld iExpert) In the long-term, these numbers are expected that grow 0.9 percent annually within the next five years. The potential growth will be seen in the traditional and premium beer sector. As a response, the giant companies in the industry Anheuser-Busch InBev and MillerCoors look forward into the merges and acquisitions as a strategy to maintain market dominance. The strategy is based on the