Mountain Man Brewing Company

1419 Words Dec 8th, 2012 6 Pages
1. What is Mountain Man Brewing Company’s positioning relative to its competitors?
Mountain Man Brewing Company (MMBC) is a 2nd tier domestic beer manufacturer based out of West Virginia. MMBC is positioned as a leader among local brewers in the East Central region, being one of the four regional breweries still operational in West Virginia. MMBC brews only one type of beer – the Mountain Man Lager, a dark bitter tasting beer. Target market for the product is middle aged men from the blue collared working class. Branding includes an image of coal miners on the bottle suggesting a strong taste and reinforcing target market segments to a niche. The beer sells mainly in off-premise locations. There is no variant of Mountain Man Lager
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National beer brands have been able to splurge on advertising and use lifestyle based advertising apart from on-premises advertising to attract new customers. Given MMBC’s small advertising budget it is an uphill task to promote their brand to newer consumer segments. 4. Assuming the company introduces Mountain Man light. Conduct a 1 year and 2 year analysis for the Mountain Man Light brand? Calculation of Break Even Volumes Required - First Year Breakeven | | Year 1 | Current Revenues of MM Beer | 50,440,000.00 | Projected Revenues of MM Beer Next Year | 49,431,200.00 | Projected Contribution from MM Beer | 15,323,672.00 | Projected Loss of Sales from Introduction of MM Light | 2,471,560.00 | Projected Loss of Contribution from Launch of MM Light | 766,183.60 | # Barrels of MM Light Needed to recover Loss of Contribution | 30,188.48 | Cost of Advertising MM Light | 750,000.00 | Incremental SG&A cost | 900,000.00 | # Barrels of MM Light Needed to recover new Advertising Costs + SG&A | 65,011.82 | | | # Barrels of MM Light Needed to Break-Even in First Year | 95,200.30 | | | Compared to forecast sales in the first year of | 48,735.19 | | | Calculation of Year 2 Volumes (Needed to Calculate the 2-year Breakeven | | | Year 2 | | | Projected Revenues of MM Beer