Case Analysis: Mountain Man Brewing Company

By: Group -8 | Section-H

Anubhav Satapathy
Dhruv Roosia
Ketan Kachhadiya
Niyati Garg
Priya Arora
Sajal Gupta
Tushar Lokhande

Under the guidance of

Prof. Bipul Kumar
In Partial Fulfillment of the Requirements for qualifying a Pass in
Marketing Management II course
At

Indian Institute of Management Indore, Rau-Pithampur Road,

Indore, Madhya Pradesh, India.
2019

MOUNTAIN MAN BREWING COMPANY: BRINGING THE BRAND TO LIGHT

Problem Statement: MMBC is currently facing the dilemma of whether to extend the product
line and launch Mountain Man Light or not.

The preferences of people are changing and thus MMBC’s revenue is decreasing by 2%
annually. Chris Prangel is of the opinion that MM Light can help capture a larger market and
lead to increased profits for MMBC. He needs to think strategically and tactically about the
marketing and distribution to see if the product can generate profit within 2 years.

Qualitative Analysis

Pros of launching MM Light

● Light beer accounts for 50.4% of the total consumption of beer and is growing at a rate
of 4% annually, offering a huge opportunity for MMBC in the Light beer market.
● It can help gain share in off premise locations like restaurants and bars as in these places
customers do not have any brand preference

● It could help MMBC tap into new customer segments - youngsters and women.

● Product line extension using the core brand name could help MMBC obtain greater
shelf space, create greater focus amongst distributors & retailers and increase brand
recall, leading to an increase in sales of Mountain Lager.

● Existing excess capacity in MM’s facility would help the production of MM Light
without any additional capital expenditure on plant and equipment.

● Quantitative analysis shows that after 2007 sales of MM Light would start
compensating for the expected losses incurred in MM Lager. (refer to attached excel)

Cons of launching MM Light

● There exists a chance of Brand Equity Dilution as it is perceived as a strong & working
man’s beer by the current customers.
● Risk of cannibalization of MM Lager sales (Tentatively being expected to 5% to 20%)
● Exposure to competition with national brands because of same target customer base.
● Contribution Margin for MM Light is expected to be less than MM Lager.
● Fraction of time, resources and attention would be diverted from Lager to Light.
● MM Light might not be able to build brand loyalty (53%) that MM Lager enjoyed.
 ● Due to the repealing of arcane laws, retailers have started pushing higher-margin
products from large national brands, leading to limited shelf space for small regional
players such as MMBC. Since the per-unit contribution from MM Light is lesser,
overall gain from shelf space might be affected.

Recommendation

MMBC should go ahead with the launch of MM Light. If launched in 2006, even with 20 %
cannibalization of MM Lager, after 2007 the net profits are higher than in the case of not
launching.