The document discusses the history and current state of Mountain Man Lager, an independent brewery founded in 1925 in West Virginia. It was well established by the 1960s but now faces declining sales and changing consumer preferences toward lighter beers. The company generates $50 million annually from its sole brand but revenues were down 2% in 2005. Younger consumers prefer light beers which provide an opportunity. The CEO has to decide whether to stick with the original brand, launch a new light brand, or extend the Mountain Man brand into light beer. Introducing a Mountain Man Light brand leverages existing brand equity and distribution while reaching a new demographic and has the best chance of profitability within two years.

1. Bringing the Brand to Light

2. Who are the eminent
personalities of the
company and what does
the brand stand for?
OSCAR PRANGEL-
President and Owner
CHRIS PRANGEL-
MBA Graduate,Head of
Marketing Operations

3. Company History
• Founded in 1925 by Guntar Prangel.
• Mountain Man brewed one beer,Mountain Man Lager,also called “West
Virginia’s beer”.
• By the 1960s,Mountain Man Lager was well established as a quality brew
in the East Central region of the United States.
• The beer was packaged in a brown bottle,with its original 1925 design of
a crew of coal miners printed on the front.
• Mountain Man Lager was priced similar to premium domestic brands and
below speciality brands.
• The primary customer base of the brand included blue-collar,middle to
lower income men aged over 45.

4. What Does the Brand stand for?
Mountain Man has relied on its history and status as an
independent,family-owned brewery to create an aura of
authenticity and to position the beer with its core drinkers.
CORE ATTRIBUTES OF THE BRAND
•AUTHENTICITY
•QUALITY
•UNIQUE WEST VIRGINIA “TOUGHNESS”

5. HOUSEHOLD INCOME
UNDER $25K
$25K-49.9K
$50K-74.9K
$75K-99.9K
$100K+
GENDER
MALE
FEMALE
0
10
20
30
40
50
Column2
Column1
AGE
Profile of Mountain Man Lager Drinkers

6. MARKET FINDINGS
By 2005,the company was generating revenues of
over $50 million and selling over 520,000 barrels
of the lager beer.
The mountain Man Lager won the “Best beer in
West Virginia” for the eighth straight year in
2005 and was selected as America’s Championship
Lager.
The Brand awareness , equity and the loyalty it
cultivated were the cornerstones of its success.
The sole brand loyalty rate for Mountain Man
Lager was 53%,higher than any other competitive
product.

7. MARKET
COMPETITION
Competitive Market Shares in Barrels by Brewer
East Central Region
Anheuser-Busch 15,620,252 42.0%
Miller 8,553,948 23.0%
Coors 3,347,197 9.0%
Other 2nd tier Premium & Popular Brewers 4,648,885 12.5%
Craft/Specialty Brewers 557,866 1.5%
Imports 4,462,929 12.0%
Total 37,191,077 100%
Note: Sales in barrels of wholesale shipments.

8. The Company faced certain
Situational Threats in 2005

9. Analysis
Since 2001,U.S. per capita beer consumption declined by
2.3%.West Virginia repealed arcane laws, thereby resulting in
large discounts being given and smaller brands being neglected.
Change in beer drinker preferences.The light beer category was
steadily gaining market share accounting for more than 50% in
2005
Younger consumers preferred light beer and they constituted
the key consumer segment for beer companies.

10. MOUNTAIN MAN’S 2005
REVENUESWERE DOWN 2%
RELATIVE TO THE PRIOR FISCAL
YEAR.

11. Chris Prangel has 3
choices:
Try to revive the company’s
fortunes through the lager
brand.
 Introduce a lighter version
of the lager brand under a
new name.
 Introduce the brand
extension as Mountain Man
Light.

12. OBJECTIVES
1.
• To find out whether it is economically
feasible and sustainable to launch
Mountain Man Light.
2.
• To market new products efficently in
order to compensate for losses in core
product sector.
3.
• To develop with changing preferences
without affecting its loyal customer base.

13. SWOT ANALYSIS OF THE BRAND:
Strengths:
Brand awareness,loyal
consumer base,strong
presence in off premise
locations.
Weakness:
No brand portfolio
diversification,revenue
totally dependant on
single product,customer
base concentrated in a
single section.
Opportunities
The lighter version of
the brand extension can
help connect with
younger consumers.
Generate greater
revenue and help in
globalizing the brand.
Threats:
Competitors possessing
greater financial
prowess,beer
consumption on the
decline.

14. MAINTAINING
STATUS QUO
 Single Product Centric.No risk
of cannibalization.
 However,not feasible to attract
new customers and increase brand
loyalty.
 Steady loss in revenues by 2%
every year.
 Consumer base degrading in this
already shrinking beer industry.
 Strong competition.

15. Therefore ,maintaining
status quo is not a viable
option…..it is like a time
bomb which will
eventually render the
company out of business.

16. Mountain Man should launch new product
in the growing “light beer” market as it is
profitable segment in the industry and
even a small market share will bring high
revenue .
Consumption by Type of Beer
EAST CENTRAL REGION %Total 6-yearCAGR
Premium Beer 7,326,642 19.7% (4%)
Popular 4,351,356 11.7% (5%)
Imported Premium 4,462,929 12.0% +6%
Superpremium (craft and
high-end domestics) 2,305,847 6.2% +9%
Total Barrels 37,191,077 100.0%
Potential
segment
for
Mountain
Man

17. MOUNTAIN MAN SHOULD TARGET YOUNG CONSUMERS
WITH ITS NEW “LIGHT BEER” PRODUCT
New Target Audience
• Age: 21-27 years (27% of total beer consumers
(constitute 13% of adult population), and the
number is constantly growing)
• “the first- time drinker demographic”
• not brand loyal yet
• spend twice as much per capita on alcoholic
beverages than older consumers
• prefer light beer ,consume in quantity
•buy mainstream products
• While purchasing consider: taste, price, the
occasions of drinking, perceived quality, brand
image, tradition, local authenticity
Reasons for
targeting new
audience
•can increase the number of
company’s loyal customers
•new product will bring the
company into new bigger
market which is constantly
growing
•will help the company to
increase its revenue and
total net income

18. PROS
•Mountain Man will capture younger generation of drinkers who
constitute 27% of total beer consumers
• As these customers are not loyal to any brand yet, Mountain Man
can turn them into company’s loyal ones
• As the brand awareness increases, more distributors will be
interested to carry Mountain Man brand
•Having a substantial regional position, Mountain Man will have a
capacity to compete in the national market
• Expanding market share will bring company growing market share,
high competitive market position, and constantly increasing revenue

19. CONS
•Current customer perception about the brand will be a significant
barrier in gaining new target audience
• New customers don’t have certain beer preferences yet, so they are
likely to try different brands
•Mountain Man can still not be able to compete with big national
competitors who are more attractive to distributors
• In the national market the competition is high, and the existing
companies already have stable competitive position
•The company’s growth may be slower than expected which may
damage company’s capacity to compete

20. LAUNCHING LIGHTER EXTENSION OF THE
BEER BRAND UNDER A NEW NAME
ADVANTAGES DISADVANTAGES
Increase in income Greater marketing costs.
Introduction to new market segments without Difficult to establish a brand
any prior negative customer perceptions. from scratch.
No chance of brand dilution. Very competitive light beer segment.
Without using Mountain Man’s name,the new brand will find it very
difficult to survive and break even will take more than 10 years.

21. Launching the extension as
Mountain Man Light Beer
ADVANTAGES
•The company is known for its quality
•Younger drinkers (company’s new target
audience) are well aware of the brand and
show appreciation for the brand’s
association with an independent brewery
• New product will not cannibalize the
current one as the target audiences are
completely different
• Mountain Man reputation will help the
new product to enter more distribution
channels .
DISADVANTAGES
•New product may damage brand equity
•The distributors may be interested in “light”
beer rather than in the core company’s
product which will lead to space
cannibalization
• The new product does not align with the
current company’s positioning
• Launching new product may offend
company’s current target audience

22. Even though the risk to lose current
target audience is high, Mountain Man
should use its name to launch and
promote the new product as it will
increase the chances of becoming
profitable quickly

23. BREAK EVEN ANALYSIS
Cost per Barrel:
Variable Costs - $66.93
Extra Costs - $ 4.69
Total costs - $71.62
Total Revenue - $50,440,000
Total Sales in Barrels-520,000
Selling Price=(Total Revenue/Total Sales in
Barrels)=$97
Revenue per Barrel=$(97-71.62)=$25.38

24. Light Beer market share growth-4%
Initial Market Share of Mountain Man-0.25%
Increase in Market Share per year-0.25%
Initial Advertisement & SG&A Costs-
($750,000+$900,000)
Therefore,Costs for 2 years-
$750,000+2*$900,000=$2,550,000
Required Barrel Sales in 2 Years-100473
Estimated Barrel Sales in 2 Years-149744

26. CONCLUSION:
CHRIS PRANGEL SHOULD GO AHEAD AND
INTRODUCE MOUNTAIN MAN LIGHT.