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Mountain Man Brewing Co Bringing The Brand To Light Case Solution
In case the company opts to forgo the MM Light product, it may turn to other alternatives and strategies to overcome the decline in sales revenue and prevent eventual bankruptcy. This includes focusing more on promotions of lager beer, perhaps using more traditional forms of advertising to reach the younger demographic. MMBC may also improve the brand image to appeal to a younger market. The purpose of the advertising would not be to increase awareness (which is already quite high) but to convert said brand awareness into brand equity, i.e. lead potential customers to actively purchase the product (Lee, Lee and Wu).
Following questions are answered in this case study solution
What has made MMBC successful? What distinguishes it from competitors?
What factors have to enable MMBC to create such a strong brand?
What has caused MMBC’s decline despite its strong brand?
Should MMBC introduce a light beer? What are the pros and cons?
Is it Mountain Man Light economically feasible for MMBC?
Should MMBC launch MM Light? If you don’t launch MM Light, or if MM Light proves unsuccessful, what other strategic options for growth does Chris have? What goals should Chris have?
Case Analysis for Mountain Man Brewing Co Bringing The Brand To Light
1. What has made MMBC successful? What distinguishes it from competitors?
As Oscar Prangel notes, the Mountain Man Brewing Company (MMBC) mainly attributes its success and survival to the strong brand image and overall profitable brand equity it has cultivated since its inception. This was possible due to MMBC targeting blue-collar workers in 1925, during a period where blue-collar workers dominated the job market (white collar workers not being officially recognized till after World War 2) (Prinz). MMBC was a family run business, earning the name ‘West Virginia’s beer’, cementing itself as a core part of the region’s identity with a high level of brand awareness. The initial success was maintained through maintenance of the brand and accommodation for the target market.
MMBC faces competition from four categories of companies, each of which MMBC is able to distinguish itself from. Major domestic producers rely on traditional advertising, which MMBC trumps through its use of the more effective grassroots method. The second-tier domestic producers were limited to areas in proximity to their factories, unable, individually, to match the reach of MMBC’s grassroots impact with their low-funded advertising. Import beer companies, unlike MMBC, had to face unique challenges such as higher shipping costs and controlling product freshness. The craft beer industry lacks a stronghold in the heartland states, where MMBC mainly operates. It is important to note that one key factor differentiating MMBC from all its competitors is its distinct, bitter taste and alcohol content, catered to its target market of blue collar workers.
2. What factors have to enable MMBC to create such a strong brand?
The factors that determine the strength of a brand include favorability, uniqueness and consensus (Mühlbacher, Raies and Grohs). By being associated with West Virginia in general, MMBC has accomplished a consensus where the vast majority of the population has a positive association with the brand, as a regional staple. The use of a “family-owned” image, as opposed to a corporate identity, also contributed to the authenticity of the brand, and improved favorability among the blue-collar target market as well.
As mentioned above, MMBC has created a strong brand by focusing on one target market consistently through the years. By concentrating on a niche, they were able to create a distinguished, unique taste, which the niche market responded favorably to and rewarded with high amounts of brand loyalty. The brand has been maintained since even keeping the same packaging and label the same. As a result, the message and image of the brand have also remained constant. MMBC plays to its strengths. Knowing it lacks the funding to compete with the mass marketing of the large, domestic producer, it instead relies on grassroots marketing to amass a smaller, much more loyal group of customers.
The singular association of MMBC with authenticity, quality and unique West Virginia toughness, were also characteristics the target market of blue-collar middle-aged workers liked to identify with. MMBC further accommodated its target market by focusing on being stocked at off premise locations, where blue-collar workers frequented. This was carried out by a sales force. Additionally, MMBC used grass-roots marketing, which was later determined as more cost effective than traditional marketing (Vellar).
3. What has caused MMBC’s decline despite its strong brand?
The recent decline in MMBC's sales may be attributed to both specific and industry-wide factors. Firstly, overall beer consumption in the US has fallen by 2.3%. in addition, there was definitely increased competition in the region MMBC was sold, leading to heightened competition. This competition led to off-premise retailers discriminating against smaller brands to utilize shelf space and maximize profits. This, coupled with a surplus of available beer in the region, led to declining profits even in companies that relied heavily on brand loyalty, such as MMBC (Dawes, Meyer-Waarden and Driesener).
The repeal of so-called “arcane” laws in relation to beer (such as a limit on promotion of beer in retail establishments), led to deeper discounts that fanned the competitive flames among brands, and made retailers more selective in stocking product, favoring the larger brands. More importantly, there was a shift in the demographics and market segments in the beer industry. The 13% of young adults of the beer-consuming population consumed around 27% of the beer, and their lack of loyalty to a particular brand meant that they were less susceptible to MMBC’s niche marketing strategy.
The proportion of light beer, of overall beer consumption, had also grown at a startling rate- reaching 50.4% of volume sales in 2005. MMBC produced a single kind of beer, bitter and strong, and so could not share in the increase in revenue that such a trend brought.
4. Should MMBC introduce a light beer? What are the pros and cons?
Introducing a light beer is a risky endeavor, especially if considering the fact that MMBC's existing product is a polar opposite of the light beer and the existing market is unlikely to be receptive to light beer. Chris, however, believes the idea holds merit. Introducing the light beer would substantially expand the market share of MMBC, being able to profit off the changing preference of the market towards light beer. Such an action would help diversify the brand, resulting in increased overall sales (Etgar and Rachman-Moore). It was also believed that another successful product under the same brand would enhance the core values and image of the MMBC brand.
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