Company Overview

Core Attributes of Mountain Man Lager

• Founded in 1925 by Gunter Prangel
• Located in New River Coal Region in West Virginia
• Launched Mountain Man Lager by reformulating an old
family brew recipe by selection of rare ingredients Unique Packaging
Bitter Flavour & High
• Known as West Virginia’s Beer 1925 design of crew
Alcohol Content
• By 2005, mountain man beer company was generating member
$50 million in revenue and selling over 520000 barrels
• Majorly concentrated in the East Central Region of US
Right Percentage of
Key Personalities Smoothness
Water Content

 Guntar Prangel – Founder of MMBC

 Oscar Prangel – Owner & President of MMBC
 John Fader – V.P of Sales
 Chris Prangel – MBA graduate and successor of MMBC
Target Market : Profile of Mountain Man Beer Drinkers
GENDER AGE
 81% of males prefer Mountain Man
Male Female 35%
Lager drink
 64% of population above 45 years age 30%
like MMBC brand 19%
25%
 Lower to middle income population
prefer Lager drink 81% 20%
 Older Generation prefer Lager drink
15%

10%
HOUSEHOLD INCOME
5%

Brand Loyalty rate for MMBC 0%

21-24 25-34 35-44 45-54 55-64 65+
Lager was 53% higher than
other competitive products
in 2005 under $25K $25K-$49.9K
$50K-74.9K $75K-99.9K
$100K+
 Target Market : Profile of Mountain Man Beer Drinkers

Pricing Strategy Major Competitors

 MMBC Lager brand priced similar to premium domestic brands
(Miller, Budweiser)
 Rated below speciality brands (Sam Adams)
 12-ounce draft beer -$2.25 Major
 6 pack in local store- $4.99 Domestic
Anheuser-Busch
Adolf Coors
Place Millers
 Bars Second Tier Import
 Restaurants Pabst Brewing Corona
 Liquor Stores Co. Molson
 Supermarket Stores Genessee Beck’s

Craft
Promotion Strategy Sam Adam’s
 Grass-roots marketing- Use of word-of-mouth marketing to spread Sierra Nevada
awareness Harpoon
 Established its own sales force team to increase demand in market
 Engaged with research firms to discover its brand extension
opportunities
Market Analysis - 2005
Situation

US per capita beer The 21-27 years age group

There was tremendous
consumption declined by 2.3
growth in light beer
% due to intense
category, which accounted
competition from other
for 50.4% of volume sales in
beverages
east central region
accounted for more than
MMBC’s 2005 revenue went
27% of total beer
down by 2% relative to
consumption. MMBC’s Lager
previous year
was not a preferred product
in this segment

Challenge
Changing Market trend leading to decline of MMBC
 Competition from alternate beverages- Wine and Spirits
 Increase in Federal Exercise Tax (upto 43% of COGS)
 Increasing health concerns of consumers
 Negligence in targeting the growing target customers-
women and young generation
 Pressure from other existing large national domestic
brewer, craft, and imported brands
 Should Mountain Man Beer Company invest in
Light Beer to take advantage of the changing
trends in Beer consumption?
 Will the MM Light Beer be profitable in the
market in the suggested time?
 Will launching Mountain Man Light Beer dilute
the Competitive advantage and challenge the
core competency and Brand perception of the
Mountain Man Beer Company Lager?
Profile of Light Beer Drinkers (2005)
GENDER Household Income
 Light beer brand was equally popular among men & woman
Female Male
14%  The brand was consumed by customers across all age
24%
groups( young and old drinkers)
16%
25%  Light beer had same presence in low income as well as high
42%
58%
income target markets
21%

under $25K $25K-$49.9K $50K-74.9K

$75K-99.9K $100K+
Light beer accounted for 50.4% of volume sales in 2005 and
AGE is expected to grow at 4% CAGR rate
30%

25%

20%

15%

10%

5%

0%
21-24 25-34 35-44 45-54 55-64 65+
 Difference in Opinions
Oscar Pragnel & VP’s belief
There are already major brands in
light beer market which have high
advertising and marketing standards
A new product can dilute MMBC’s
Lager popularity
Launching a new product requires
huge additional investment in
inventory, packaging and advertising
Retailers would not grant incremental
shelf space for MMBC brand or
particularly for old product like Lager
Chris Pragnel’s belief
Light Beer Competitive market shares
Market share of light beer in %
60%
Light beer has been consistently 50%
showing growth (+4.3%) in markets 40%
30%
20%
10%
Light beer launch will help to gain
share in on-premise locations: bars & 0%
restaurants
The new product meets the demand
of young drinkers and females
Oscar Pragnel had fear of already existing
It will lead to diversification of brand
portfolio and its popularity may even popular brands in Light Beer Market
boost the sales of other brand
product-Lager
Analysis