Beer and Mm Lager

3271 words 14 pages
11/10/13

Mountain Man Brewing Company Case Study

Table of Contents
What is the current situation? 2
What has made MMBC successful & distinguishes it? 2
What enabled MMBC to create such a strong brand? 3
What has caused MMBC’s decline in spite of its strong brand? 3
Should MMBC introduce a light beer? 4
Is MM Light financially feasible for MMBC? 5
Break-Even Point (BEP) Analysis 6
MM Lager Cannibalization 6
MM Light Marketing Strategies 7
Exhibit 1 – SWOT Analysis 9
Exhibit 2 – Financial Data and Assumptions 10
Exhibit 3 – Break-Even Point (BEP) Analysis Calculations 11
Exhibit 4 – MM Lager Cannibalization Calculations 12
Exhibit 5 – MM Light Marketing Strategy 15

What is the current situation?
Mountain Man Brewing
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Beer lovers are sticking with their choice of libation; however, substituting a light version of their favorite brand. With these factors on the rise every day and the core demographic of MM Lager reaching an age bracket were considerably less portions of income are dedicated to alcohol purchases, the brewery has slowly lost market share to the larger domestic brewers that have been fortunate enough to capital to invest on increased advertising and marketing.

Should MMBC introduce a light beer?
With sales declining and seeking new areas of business growth, Chris Prangel, a recent MBA graduate, is considering a campaign to launch MM Light. Light beer sales in the U.S. have been growing at a compound annual rate of 4%, while traditional premium beer sales, such as MM Lager, have declined by the same percentage. The core age group for light beer drinkers is 25- 44 which extends below the current core age group www.termpaperwarehouse.com/print/Mountain-Man-Brewing-Company-Case-Study/173042 2/8

11/10/13

Mountain Man Brewing Company Case Study

of MM Lager (men over the age of 45). Currently, MM Lager has a 4-to-1 male-to-female ratio while the light beer category ratio is roughly 3-to-2. Using current rates of decline with profit margin down 6.2% in 2005, 2010 sales of MM Lager will continue to decrease at the current rate of decline. Given the current state of the

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