SLIDE 1- Background

Gunter Prangel founded the Mountain Man Brewing company in 1925.

It was situated in the New River coal region of West Virginia.
Popularly known as West Virginia's beer.
Mountain Man Lager was a reformulated family brew recipe.
By 1960's Mountain Man Lager was well respected and known throughout
the east central region.
By 2005 Mountain Man Beer Company was generating $50 million in
revenue and selling over 520,000 barrels.

SLIDE 2 - Present Situation

Chris Prangel a recent MBA graduate stood to inherit Mountain Man

Brewing Company.
MMBC was experiencing declining sale for the first time.
Light Beer Market was growing.
It was recorded that Light Beer had a growth of 4% annually over the last
6 years.
Should MMBC expand their horizon and get into this light beer market.

SLIDE 3 - Why was Mountain Man a success?

It was a family owned business.

By 1960's Mountain Man Lager expanded to the east central region in
spite of being called West Virginia's beer.
It was a brew recipe using a meticulous selection of rare Bavarian Hops
and unusual strains of barely.
Flavourful bitter in taste.
It was packaged in a brown bottle with its original 1925 design of a crew of
coal miners printed in the front.
Higher than average alcohol content.

SLIDE 4 - AWARDS & RECOGNITION

West Virginia's top lager for 50 years.

Voted "Best Beer in West Virginia" for eight straight years.
Voted "Best beer in Indiana in 2005.
Brand awareness & quality reputation among blue-collar men.

SLIDE 5 - Customer Base

MMBC's customers values the brand authenticity.

Reputed among the blue-collar men.
Primary customers are low-income men over age 45.

SLIDE 6 - Promotion of the brand

Relies heavily on brand loyalty & word of mouth.

Packaged in old style brown bottle with its original 1925 crew of coal
miners label.
It was promoted mostly in retail stores located in east central U.S.

SLIDE 7 - Decline in Sales

Growth in light beers sales which was 50.4% of market share in 2005
compared to 29.8% in 2001.
Increase in federal taxes.
Overall beer consumption declined by 2.3% since 2001.
Health awareness.
The key consumer in the market was young drinkers aged between 21 to
27.

SLIDE 8 - PROS of launching Mountain Man Light Beer

It will attract young drinkers between ages 21 to 27, hence the consumer
market of the brand will expand.
It will a different brand by the company.
The core brand name will be highlighted by creating a new beer.
Market research shows growth in light beer sales annually by 4%.

SLIDE 9 - CONS of launching Mountain Man Light Beer

Cost of Production & advertisement will increase.

Competition with brands like Miller Lite or Coors Light.
Alienate the current customer base.
Risk of harming the current brand image.
Cannibalize the sales of Mountain Man Lager.
New product will add to the cost structure, hence reduction of profit will
take place.

SLIDE 10 - Chris's Estimates

COST
SG&A Cost will be $900,000 annually.
Intense six months advertisement would cost $750,000.
Variable cost per barrel of Mountain Man Lager is $66.93.
Variable cost per barrel of Mountain Man Light is $66.93 + $4.69 = $71.62
Market price per barrel of new light beer is $97.
REVENUE
Market price per barrel is $97.
Revenue per barrel will be $97 - $71.62 = $25.38
Total Investment is $1.65 million.

SLIDE 11 - DECISION
The net profit projections Chris Developed, he assumed that Mountain Man Lager
lost 2% of its revenue base annually. But after examination of the financial
projects of the Mountain Man Light it was found out that regional revenue growth

of light beer is 4% annually. Hence Mountain Man will grow 0.25% every year
with the base year as 2006.
So I think with all the statistics kept in mind Chris should go ahead with this idea
and launch Mountain Man Light.