Mountain Man Lager Case

1. Identify the main problem. (try to keep it to 3 sentences or less)

Due to decline in sales and changing in customer dynamics, MMBC was facing a major problem of how to secure the company’s future by deciding whether to introduce the Light beer as Mountain Man Light or not without losing its brand equity of Mountain Man Lager. Also, how would Chris be able to convince the senior management team and his father to go forward with the launch of MM Light.

2. Evaluate the performance of the brand.

Mountain Man Lager had a high brand equity in the premium segment and was sold mostly at off-premise location. It was founded in 1925 and within 35 years MM Lager’s reputation was well entrenched throughout the East Central region of US. It was also

Mountain Man Lager was most successful with the blue-collar consumers. They never lost sight of their core customers. The key cornerstones were brand awareness, perception of quality and brand loyalty that it cultivated. The sole brand loyalty rate for MMBC was 53% which was higher than the competitors. MMBC always used grass-roots marketing to spread its beer quality message by word of mouth. Their advertising expenses were almost 2.7% of their total revenues (Exhibit 1). Mountain Man Lager was most common in males (81%) as compared to females (19%). It was more common among middle-to-lower income men (household income 75k and lower), especially in the age group of 45 and above, as compared to the youngsters (Exhibit 2). Out of the total beer sales in US, 18.3% came from East Central region. MM Lager along with other

There has been a decline in sales of MM Lager due to increase in federal excise tax, increasing health concerns, changes in consumer dynamics due to rising popularity of light beer among the young people and competition from wine and spirits-based drinks. On the other hand, the light beer sales in US had been growing at a compound rate of 4%, while sales of traditional premium beer declined by the same percentage. There has been a constant growth in the demand for light beer. The light beer category accounted for 50.4% of volume sales in 2005, compared with 29.8% in 2001. By diversifying their product by launching the light beer, they will be able to capture the new market segments such as the youngsters and the health-conscious people and