Defining the Problem
During the fiscal year 2005, Mountain Man Brewing Company (MMBC) lost 2% in sales
for 2005.
The company competes in the premium beer segment of the market. MMBC operates in
the East Central Region of the United States. Premium beer sales are declining at the rate
of 4% annually. MMBC must make a decision on how to move forward with the business
in a market that over the past 6 years has a compound annual growth rate (CAGR) of (4%).
Situation Analysis
The light beer market in the US has grown at a rate of 4% in the past few years and now
makes up
50% of the beer consumption market. Women and young adults (those under the age of 28)
make up a significant portion of the demographic that prefers to drink light beer. This
market segment is projected to increase in size while the premium segment that Mountain
Man operates has reached maturity in its life cycle. The company is considering entering
the light beer market but is worried about the ramifications of this decision. MMBC doesnt
want to alienate its established customer base and harm their brand.
In order to change MMBCs current trajectory and increase its market share while
maintaining its
brand image, the company must evaluate their situation:
MMBCs family owned brewerys sales have begun to stagnate showing 2% annual decline
MMBCsMountain Man Lager(MML) has held the position for Best Beer in various states
The younger demographic drinking segment is not typically loyal to specific any brand and
constitute
27% of total beer consumption
Light beer producers are dominated by the largest brewers who leverage economies of
scale MMBC prices the MML between premium domestics and specialty brands for an
affordable price MML is targeted toward blue-collar, middle to lower income earning men
over the age of 45
MML core consumers (45 years and up) are aging rapidly
Potential Alternatives for MMBC
Alternative 1 – Expansion of Mountain Man Lager
This alternative relies on keeping the MML and expanding other opportunities without
introducing a new beer. This would include increased marketing efforts as well as
expanded distribution. Through these
increased efforts on branding and distribution channels, the Company will be able to
thwart its current
downward trajectory.
Currently, the Mountain Man Brewing Company has a strong brand amongst their current
market selling MML.The Companys customers are fiercely loyal and are viewed as the
tough bitter beer for blue-
