Position Statement
Mountain Man Brewing Company has a strong loyal following and is known to be West Virginia’s Beer. They are the leader in the Lager category with a 53% sole brand loyalty rate. MMBC should decide to keep status quo and not try to compete in the light beer category. They should continue to engage in grass-roots marketing since it helps define their brand identity.
Decision Options
#1 Focus on Mountain Man Lager, their core competency yet extend marketing efforts to strengthen presence in other geographic locations within the United States.
#2 Resort to line extension and formulate Mountain Man Light.
Decision Criteria
1.) Increase profits and maintain optimal market share
2.) Extend brand awareness
3.) Preserve the title “West Virginia’s Beer”
Proof of Recommended Option
Mountain Man Brewing Company should focus on their bread and butter, Mountain Man Lager, and strengthen the brand awareness of this beer instead of creating a light beer. Table 1 below shows the projected revenue for the MMBC if they stick with their popular lager.
Table 1- Projected Revenue for MMBC
Year | Revenue |
2005 | $ 50,440,000 |
2006 | $ 49,431,200 |
2007 | $ 48,442,576 |
2008 | $ 47,473,724 |
2009 | $ 46,524,250 |
While the industry is declining, which means a decline in revenue, MMBC has been able to retain very brand loyal customers due to staying true to their image. According to the case, MMBC has a customer loyalty rate of 53%, which is higher than some of the most popular beers in Budweiser at 42% and Bud Light at 36%. The MMBC introducing a light beer will not only hurt Mountain Man’s image, but the increased revenue after cannibalization is not worth the risk of losing loyal customers. Below are the figures showing revenue for the Mountain Man light beer.
One barrel of Mountain Man beer costs $97 |
= Yr 2005 revenue of 50,440,000/ Yr 2005 barrels sold 520,000 |
Since a barrel of...