Mountain Man Brewing Company:
Bringing the Brand to Light
Prepared by: Olena Gapon
December 5, 2014
1
First time in the Mountain Man’s history the revenue is falling by
2% due to the changing tendencies in the market
Tendencies in the industry
Over last 6 years light beer sales has been growing at 4% rate
annually (in 2005 “light beer” category takes 50.4% of volume sales)
while traditional premium beer sales has declined at 4% annually
Why they affected Mountain Man
Mountain Man is a premium lager beer
Glut of products in the market
In the whole beer market in East Central Mountain Man takes only
1.4% market share (exhibit 1)
Mountain Man is a comparatively small regional brewery that
does not have enough capacity to compete with national brands
Large national brewers put pressure on smaller regional breweries
Due to discriminating small brands by distributors, many
independent breweries in East Central have been closing
Changes in beer drinkers’ preferences and overall changes in
consumer segments
Increasing health concerns among the consumers
Big companies are introducing more new products to the market
Mountain Man is a small brand that provides lower gross margin
to distributors due to limited capacity of distribution and lack of
financial and marketing resources than big companies are able to
do
Mountain Man’ current target audience is very specific that
influences other beer drinkers’ perception about the brand (the
image of “working man” beer)
Mountain man is perceived as “stronger” beer, and has higher
than average alcohol content
Mountain Man keeps to a single- brand product strategy
Aging demographics
Mountain Man is targeting consumers of the age of 45-54 years
old
US beer consumption is decreasing by 2.3% due to competition from Mountain Man is presented exclusively in beer market
wine and spirits- based drinks
2
If Mountain Man keeps Mountain Man Lager, it will be profitable
only if the market share does not change, otherwise, the
company will face loss
Year
Market size
(barrels)
Mountain Man
Lager market share
stays the same
(11%)
Revenue
Net Income
2005
4,648,885
2006
4541960,645
2007
4437495,55
2008
4335433,153
2009
4235718,19
11%
11%
11%
11%
11%
$ 50 440 000,00
$ 3 114 670,00
$ 48 462 720,08
$ 2 501 713,23
$ 47 348 077,52
$ 2 156 174,03
$ 46 259 071,74
$ 1 818 582,24
$ 45 195 113,09
$ 1 488 755,06
Mountain Man
Lager market share
decrease by 0.5%
annually
Revenue
Net Income
11%
11%
10%
10%
9%
$ 50 440 000,00
$ 3 114 670,00
$ 47 077 029,09
$ 2 072 149,02
$ 43 842 072,08
$ 1 069 312,34
$ 40 731 019,34
$
104 886,00
$ 37 739 882,57
$ -822 366,40
Mountain Man
Lager market share
decrease by 1%
annually
Revenue
Net Income
11%
10%
9%
8%
7%
$ 50 440 000,00
$ 3 114 670,00
$ 44 874 178,17
$ 1 389 265,23
$ 39 537 701,39
$ -265 042,57
$ 34 422 964,10
$ -1 850 611,13
$ 29 522 589,28
$ -3 369 727,32
*East Central Region, “other 2nd tier premium & popular brewers” (exhibit 2)
If the market share stays
the same, the company
will stay profitable,
however, revenue still will
be falling
If the share falls by
0,5% every year, the
company will face the
loss in 2009
If the share falls by 1%
every year, the company
will face the loss in 2007
Even if the share will stay stable, Mountain Man’s revenue will still keep falling
3
Mountain Man should launch new product in the
growing “light beer” market as it is profitable segment
in the industry and even a small market share will bring
high revenue
Segments
sold barrels market share
2nd tier brewers
4648885
13%
light beer
18744303
50%
others
13797889
37%
total
37191077
Beer segments
2nd tier
premium
brewers
Light beer
Mountain Man Lager’s segment
Potential segment for
Mountain Man
Market Size of
the segments
4,648,885
Mountain
Man share
11%
Revenue
Net Income
$ 50 440 000,00
$ 3 114 670,00
18,744,303
3.3%
$ 60 000 513,90
$ 3 177 373,53
If the company gains at least
3.3% market share in the
“light beer” market, the net
income would be equal to
holding 11% market share in
the “2nd tier premium
brewers segment in which
the company currently
operates.
4
Launching in “light beer” segment will bring Mountain Man to the
national level in long term and provides it a sustainable competitive
position
Opportunities
Threats
Mountain Man will capture
younger generation of drinkers
who constitute 27% of total beer
consumers
As these customers are not loyal
to any brand yet, Mountain Man
can turn them into company’s
loyal ones
As the brand awareness increases,
more distributors will be
interested to carry Mountain Man
brand
Having a substantial regional
position, Mountain Man will have
a capacity to compete in the
national market
Expanding market share will bring
company growing market share,
high competitive market position,
and constantly increasing revenue
Current customer perception
about the brand will be a
significant barrier in gaining new
target audience
New customers don’t have certain
beer preferences yet, so they are
likely to try different brands
Mountain Man can still not be
able to compete with big national
competitors who are more
attractive to distributors
In the national market the
competition is high, and the
existing companies already have
stable competitive position
The company’s growth may be
slower than expected which may
damage company’s capacity to
compete
5
Mountain Man should target young
consumers with its new “light beer”
product
New Target Audience
 Age: 21-27 years (27% of total beer
consumers (constitute 13% of adult
population), and the number is
constantly growing)
 “the first- time drinker demographic”
 not brand loyal yet
 spend twice as much per capita on
alcoholic beverages than older
consumers
 prefer light beer
 consume in quantity
 buy mainstream products
 While purchasing consider: taste, price,
the occasions of drinking, perceived
quality, brand image, tradition, local
authenticity
Reasons why Mountain Man
should target new audience
• can increase the number of
company’s loyal customers
• new product will bring the company
into new bigger market which is
constantly growing
• will help the company to increase its
revenue and total net income
6
Even though the risk to lose current target audience is high, Mountain
Man should use its name to launch and promote the new product as it
will increase the chances of becoming profitable quickly
Advantages to use Mountain Man name in the new
product positioning
 The company is known for its quality
 The only company’s product, Mountain Man Lager,
is recognized as “Best beer in West Virginia”, “Best
beer in Indiana”, and “best- known regional beer”
what positively affects the customer perception of
the company
 Younger drinkers (company’s new target audience)
are well aware of the brand and show appreciation
for the brand’s association with an independent
brewery
 New product will not cannibalize the current one as
the target audiences are completely different
 Mountain Man reputation will help the new
product to enter more distribution channels
Disadvantages to use Mountain Man name in the new
product positioning
 New product may damage brand equity
 The distributors may be interested in “light” beer
rather than in the core company’s product which
will lead to space cannibalization
 The product is perceived as “working men beer”
 The new product does not align with the current
company’s positioning
 Launching new product may offense company’s
current target audience
Mountain Man name is a significant attribute in the new product’s strategy as the
brand awareness among beer consumers in East Central is high
7
Mountain Man should launch a sub-brand “Premium Light by
Mountain Man” under company’s name as it will help the
new product to have high brand awareness immediately
Mountain Man Light
Advantages


Premium Light by Mountain
Man
Company’s market reputation 
Sounds like product extension
of Mountain Man


Disadvantages

Consumers perceive
Mountain Man brand still as a
strong beer product for “blue
collars”
Mountain Man’s core
attributes are
authenticity and
quality

Company’s market
reputation
Sounds like separate product
under Mountain Man brand
The name emphasizes the
“premium” quality of the
new product
Consumers perceive
Mountain Man brand still as
a strong beer product for
“blue collars”
New Light

The name will not suffer from
current consumers’
perception of the product as
of the one exclusively for
“blue collars”

Without using Mountain Man
name, the new name sounds
like a completely new
product in the market
Using Mountain Man
name in the name for
the new product will
transfer these attributes
to the new product
8
“Premium Light by Mountain Man” should be launched
in mainstream channels with an average price
Channels
Supermarkets and liquor stores
How to persuade
distributors to place the
product



How it will be presented
in the channel



Breweries and
restaurants
Distributors already know Mountain 
Put higher than
Man brand, so company’s reputation
average price for
will persuade them to place the new
the product, so
product of the company
that distributors
Give them an opportunity to get a
will have bigger
minimum possible inventory
margin
Provide them with additional
refrigerators for the new products
The product will be placed on the

shelves next to its main competitors:
Corona Light, Anheuser- Busch, Bud
Light, and Amstel Light
There will be additional refrigerators
around the store exclusively for
“Premium Light by Mountain Man”
The refrigerators should be
surrounded by Mountain Man print
advertising
The new product
will be positioned
as premium
domestic light beer
Mountain Man
should put efforts
into placing
“Premium Light by
Mountain Man” in
every “beer” point
of sale
The company should create
a separate department for
the new product which
should include a manager
who deals exclusively with
distribution
9
The main advertising channel for “Premium Light by Mountain Man”
should be outdoor advertising, television, and digital
Advertising channels
Advantages for “Premium
Light by Mountain Man”
Television
Big audience can be reached
in the same time
Radio
Short broadcast time
Social Media
New target audience is highly
presented in the channel and
get a lot of information from
there. Low expenses
Due to big audience, low price May not appeal to the
to contact 1 consumer
readers
Print magazines and
newspapers
Outdoor
Word- of- mouth
Good “reminding” tool to
increase brand awareness.
Will attract current beer
consumers
Consumers’ recognition
Disadvantages for
“Premium Light by
Mountain Man”
High expenses
New target audience
does not listen the radio
much
The company cannot
completely control
High expenses. Will not
be effective to attract
new consumers
Television, Social
Media, and Outdoor
are the most relevant
advertising channels
to promote
“Premium Light by
Mountain Man”
because they will
contact the target
audience with the
highest repeat rate
The company cannot
completely control
The approximate advertising expenses will be at least $750,000 for 6 months, or $1.5 million
for a year, what is absolutely affordable budget for Mountain Man Company (as its net present
value will still be high)
10
Mountain Man should keep supporting its core Mountain Man
Lager product as it is targeted towards very specific group of
beer consumers who show high brand loyalty
Current customers profile:
rugged, middle- aged men,
blue- collar, particularly
miners, middle- to- lower
income, over 45 years
Mountain Man should extend its
product line with new packaging
variations of Mountain Man Lager,
not changing the taste and
positioning
Why it is important to keep them:
58% of customers are extremely
brand loyal and bring company the
most of the revenue.
Current customers will feel that
the company takes care about
them, not only focusing on the
new product. So, they will not
feel offended, and the brand
equity will not be damaged
11