Mountain Man Brewing Company Case Analysis

1003 Words Jul 15th, 2014 5 Pages
Katia Herrera
Dr. Barksdale
MK4900
June 23, 2014

Mountain Man Brewing Company Case Analysis

Situation Analysis

1. Industry

“The beer industry in the United States generates $75 Billion in annual sales.” (Abelli, 4)

Light beer sales have increased at a compound annual rate of 4% over the previous six years. Traditional premium beer sales have also declined annually by the same percentage.

The beer industry can be considered a monopoly since large national brewers maintain economies of scale in brewing, better distribution tactics, spend heavily on advertisement, and create barriers of entry for other smaller brands.

Brand plays a key role in the beer-purchasing process, along with taste, price, special occasion, brand image,
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3. Limited advertising and other budget resources to compete with large, well-established breweries

4. Brand erosion is also a key factor to take into account. MMBC is doing things right in the eye of the core consumer and can possibly stumble with its brand equity if they introduce a new product.

Alternative 2: Do not introduce Mountain Man Light (Status quo)

Advantages:

1. Continue to manufacture an exceptional beer with a great brand name

2. Not lose sight of its loyal and core customer.

3. Will not erode sales of the core brand, Mountain Man Lager.

4. Maintain brand equity with the distinctive bitter flavor and slightly higher-than-average alcohol content of Mountain Man Lager.

5. Will not experience any cannibalization.

Disadvantages:

1. Their current customer segment is a demographic that is aging rapidly, you can expect a shrink in sales.

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.

3. Increase in expenses for marketing efforts and expanded distribution even if you do not introduce a new product.

Recommendation and Justification

Mountain Man Brew Company should launch Mountain Main Light. Rationale/Support:

1. Based on the premise that MMBC will be targeting young consumers of ages 21-27, this segment accounts for more than 27% of total

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