Mountain Man Brewery Case

1441 Words Oct 14th, 2011 6 Pages

1) What is Mountain Man Brewing Company’s positioning relative to its competitors?
Mountain Man Brewing Company brewed a beer called “Mountain Man Lager” beer. “Mountain Man Lager” held the top market position among lagers in West Virginia for almost 50 years. It was also known as “West Virginia’s Beer”. It was a legacy brew in the mature beer brewing business and had managed to maintain a respectable market position in most of the states where the beer was distributed.

“Mountain Man Lager” was a dark colored beer, priced similar to premium domestic brands such as Miller and Budweiser. Its core audience was blue collar, middle-to-lower income men over the age of 45. It was categorized as a second tier domestic
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g) The “light beer” category had seen significant growth in sales. It accounted for 50.4% of the total volume sales, and was seen to be growing steadily. MMBC did not compete in this category at all. h) The younger generation, mainly purchased beer at pubs and bars. MMBC had not been successful in targeting these markets for distribution and sales.

4) Assume the company decides to introduce “Mountain Man Light”. Conduct a one-year and two year analysis of the “Mountain Man Light” and Use the information to discuss breakeven analysis within your options grid.

Calculation of Break Even Volumes Required | Year 1 | Year 2 | | | | Current Revenues of MM Beer | $50,440,000 | | Projected Revenues of MM Beer Next Year | $49,431,200 | $48,442,576 | Projected Contribution from MM Beer | $15,323,672 | $15,017,199 | Projected Loss of Sales from Introduction of MM Light | $2,471,560 | $2,422,129 | Projected Loss of Contribution from Launch of MM Light | $766,184 | $750,860 | # Barrels of MM Light Needed to recover Loss of Contribution | 30,188.48 | 29,584.71 | Cost of Advertising MM Light | $750,000 | 0.00 | Incremental SG&A cost | $900,000 | $900,000 | # Barrels of MM Light Needed to recover new Advertising Costs + SG&A | 65,011.82 | 35,460.99 | | | | # Barrels of MM Light Needed to Break-Even in First Year |
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