Mountain Man Brewing Company was established as a family concern in 1925 in West Virginia by Guntar Prangle. The company brewed single-product beer, Mountain Man Lager, which won “best beer in West Virginia” and was elected as “America’s Championship Lager”. Mountain Man Lager featured quality, bitter favor and slightly higher-than-average alcohol content that uniquely contributed to the company’s brand equity. Mountain Man was a local market leader and distributed its lager in several states outside West Virginia. By 2005 Mountain Man was generating over $50 million in revenue with over 520,000 barrels of Mountain Man Lager sold.
However, Mountain Man had been facing serious challenges. Its revenue was encountering a 2% yearly decrease in 2005 as it faced fierce competition. Light beer was sweeping the beer market and gained 50. 4% of volume sales in market share in 2005. Thus, the objective of Mountain Man in this case study is to increase sales revenue by moving into the light beer market. Chris Prangel, son of the company’s owner, hoped to achieve three goals in his marketing campaign: 1. ) To produce a light beer in the hope of attracting younger drinkers to the brand; 2. To sustain the core brand equity of Mountain Man Lager; 3. ) To maintain a steady share of its market segment by regaining the 2% annual loss. Mountain Man’s revenue was declining as it faced new products, which threatened to steal its customer base. However, Mountain Man met difficulties to make changes alongside a changing market. The light beer market was growing steadily, and younger drinkers preferred light beer to other categories. Further, the key customer segment for beer companies was younger drinkers, as most industry observers believed.
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However, the core customers of Mountain Man, featuring blue collar, middle-to-lower income men over age 45, preferred and got used to the taste of Mountain Man lager, and many of whom considered that yuppies consumed light beer. In fact, a demographic data had shown that among the customers of Mountain Man, younger drinkers only occupied 2%. Therefore, as Mountain Man’s loyal customer base ages, it was failing to attract younger drinkers in the current beer market. Mountain Man was the only remaining brewer with a single product. Apparently a company with only one product was not able to sustain success.
Its core customers, although loyal to the brand, were aging. Furthermore, the repealing of arcane laws in West Virginia resulted in more fierce competition in beer sales. Distributors alike were facing challenges and becoming more discriminating about which brand they would continue to carry. A company with a broad range of products appeared to be more prospective. If Mountain Man did not expand its product line, it was going to be in a very severe situation that its pride, Mountain Man Lager, was facing to be dropped from local market. Moreover, people’s habits and tastes were evolving.
Mountain Man had been marketing the same product, Mountain Man Lager, for a very long period. The population of their consumers was decreasing. On a message note, its rivals had found ways to success of marketing their light beer products. Although developing a new product, light beer, appeared to be the solution to regain Mountain Man’s market share, marketing light beer to the company’s existed customers without further marketing research would cannibalize their existing market share, alienate the older customer base and ultimately erode the Mountain Man brand equity.
A focus group to discuss a Mountain Man light beer advertising campaign showed that the loyal customers thought that Mountain Man light beer would taste like the traditional Mountain Man lager. However, a strong bitter flavor, featured in Mountain Man lager, would not capture the light beer market. Brand equity of Mountain Man Lager played an extremely important role in driving the existing sales of Mountain Man lager. Mountain Man Lager had been rated as the best-known regional beer and won “best beer” in West Virginia and Indiana.
It’s been perceived as a high-quality and legacy product. As one participant in the recent focus group had spoken, “My dad drank Mountain Man just like my granddad did. ” It would surprise no one that alienating the customer base would be disastrous for Mountain Man. Thus, Mountain Man should have to be careful of marketing its new products to keep the association with the Mountain Man Lager. Chris Prangel was convinced that the light beer market was the solution to sustain the company’s market share, but embarking on this opportunity would be at a risk without further market research.
Clearly a light beer alternative would need to find a distinct message of its own. In marketing its light beer, Mountain Man needed to build a distinct identity for its light beer product and its light beer brand. To do so, Mountain Man needed to know who would be the target customers. First of all, the key factor to achieve success in the light beer market is to attract younger drinkers to buy its beverages in the light beer category. These younger drinkers have not established loyalty to any specific brand of beer. Beer is an acquired taste for most people.
Once beer drinkers get used to the taste, they are going to have that taste cemented in their mind perpetually. Plus, consumers were considering more health concerns about alcohol consumption. Taken together, Mountain Man should produce a light beer with a special taste, which can draw younger drinkers’ interest, and with less alcohol and fewer calories for health concern. The company should make a new logo for its light beer product that appeals to a broader customer base. For example, the original logo, designed in 1925, features a crew of coal miners.
The company may redesign the logo by adding sports elements to attract potential younger customers, while its main features should remain the same to ensure that customers feel receptive to the change. The new logo can bring association with the legendary craftsman of Mountain Man Lager into Mountain Man light beer. In order not to erode its current brand equity, the company might give its light beer a new product name, distinguishing from Mountain Man Lager but originating with the brewery, e. g. , Mountain Star Lite.
Mountain Man must design the new label on which “Mountain Star Lite” is located in fancy font on the top with “Mountain Man Beer company” flanked by two tildes on the left and right, a new logo for “Mounatain Star Lite” is put in the middle and the healthy ingredients, special flavor and taste are emphasized on the bottom. To avoid the conflict in sales with Mountain Man Lager, the company might distribute and market their light beer outside the central region. Finally, needless to say, developing and marketing new products needs large amount of money.
At that point, Mountain Man was still profitable, although their sales went down by 2%. They could afford to pay these costs for developing and marketing their new light beer product. If they waited, eventually their profits would not internally sustain these costs. In conclusion, through the analyses on Mountain Man’s managers’ concerns, the market surveys and the demographic data, the launch of a new product, light beer, is necessary for Mountain Man to regain the expected sales revenue and sustain success in the very competitive business environment, although it is always going to be a risk.
Light beer has the largest sales, occupying 50. 4% in market share in 2005, and is still growing rapidly. Therefore, light beer is the required road to attract new consumers, especially younger drinkers, to Mountain Man. By producing high-quality light beer, positioning the new product correctly and marketing it properly, Mountain Man has the opportunity to get their product sales and marketing turned around. The new logo with sport elements and new label with specific features of Mountain Man light beer help distinguish itself from the light beer crowd, and also separate from Mountain Man Lager.