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MEMORANDUM
To: Oscar Prangel, President and Owner of Mountain Man Brewing Company (MMBC)
From: Chris Prangel, Marketing Operations Manager
RE: Building new strategies, Launch of the product ‘Mountain Man Light’
Date: 02/20/2006
Overview of Situation
Mountain Man Brewing Company (MMBC) holds a rich history from its single popular product
Mountain Man Lager. Having been a family brew recipe reformulation, Mountain Man Lager is
known as West Virginia’s Beer. It’s popular among Blue Collar workers.
By 2005, Mountain Man Beer Company rose to generate $50 million in revenue, selling 520,000
barrels. The Company has high brand loyalty and had always relied on grass-roots marketing,
creating popularity via word of mouth. Mountain Man Lager’s brand loyalty rate was 53% which
was higher than competitive products such Budweiser and Bud Light.
However, there has been a change and shift occurring in the market with the light beer
segmentation growing in number leading to MMBC experiencing a decline in sales Although
still at a profitable standpoint, the growing market change with people’s beer preferences and
there appears a need to adopt a new light beer product (Mountain Man Light) to keep up and stay
ahead of the market’s growing needs. There is a steady 4 % compound increase sales each year
in the light beer segment because of preferences of the youth target audience. This rising concern
needs to be addressed to ensure the company does not lose revenue and market share in the
upcoming years.
My recommendations supported by insights and exhibits are listed below for further detail and
understanding:
RECOMMENDATIONS
For Mountain Man Brewing Company to increase sales, benefit from profits and hold an
increasingly competitive market share, it should adopt the introduction of the new Mountain Man
Light.
Recommendation 1: Penetrating a New Market Segmentation with the Mountain Man
Light Beer Introduction
• As a leading brand in the industry, Mountain Man can diversify its portfolio with the
introduction of the MMB Light. MMBC with its current positioning and brand loyalty
can leverage the core brand name to help create MMBC light. (exhibit 1)
• It is analyzed that Mountain Man Light has a 4% growth rate as opposed to Mountain
Man Lager. As for the customer base, with Lager the male to female ratio is 4 to 1, while
Light holds a 3 to 2 ratio
• This will lead to creating an increased appeal amidst female consumers. Thereby leading
to increased revenues. Furthermore, from a market segmentation perspective, it can
expand its consumer market by being able to attract and gain numbers with younger
drinkers aged 21-27 years
• It is pivotal to consider projects without having Mountain Man Light in the portfolio
(exhibit 5). The numbers shows a steady decline in the revenue for MMBC and
descending operating margin value (from $4.64 to $3.14 from years 2005 to 2010).
Recommendation 2 : Gaining advantages of production line extension and portfolio
diversification of the brand
• The light beer market rose from a 29.8% in 2001 to 50.4% of volume sales in 2005. The
young target audience ranging from 21 to 27 years of age comprises 27% of total beer
consumption. This vast change in numbers calls for game changing decisions at MMBC
even from portfolio diversification and product line extension perspective (exhibit 2)
• A new product line extension will help MMBC gain more shelf space and traction with
