MOUNTAIN MAN BREWING

COMPANY (MMBC)

A BRIEF HBS CASE STUDY

CHRIS PRANGEL MANAGER (Recent
MBA graduate)
OSCAR PRANGEL PRESIDENT AND
OWNER
GUNTAR PRANGEL FOUNDER (1925)
WHAT IS MMBC-Mountain
Man Lager?
• West Virginia’s Best Beer
• Premium Market Leader for almost 50 years
• Blue-Collared Consumer’s Favorite Drink
• Legacy Brew-Family owned Business
 Current Situation
HIGH BRAND EQUITY IN PREMUIM SEGMENT

SOLD AT OFF-PREMISE LOCATION

2% DECLINE IN REVENUE

GROWTH IN LIGHT BEER SEGMENT DUE TO YOUTH

PREFERENCES
 COMPETITIVE MARKET SHARES

These companies do
Anheuser Bush, Miller
product
Coors and Adolf Coors These Companies
diversification and
possess 74% of the have 84% share in
create entry barriers
market share in the the Light Beer
for other brands to
overall brewing of Market
come in the same
United States
market
BEER DRINKERS-PROFILE
CONSUMPTION
 Market Research
• Mountain Man Lager Attributes – Authenticity,
Superior Quality, Toughness etc.
• Awareness amongst people but they considered
as a beer for the blue collared
• 53% loyalty of Blue Collared Customers towards
the brand
 OBJECTIVES
• Whether to come in Light Beer Market or not?
• If enter Light Beer Market, How to capture it?
• Effect on the core value of Brand , if entered the
Light Market
• Investment and Returns on the new Light Brand
 2 Options
A) Introduce Light Beer under Mountain Man Brand
Name

B) Introduce Light Beer under a different Brand Name

A) Introduce Light Beer under
Mountain Man Brand Name
ADVANTAGES DISADVANTAGES

Low advertisement costs Reduction in sales volume and

revenue of the core product

Increase in revenue Loss of Blue Collared Core Customers

Come into Light Market Brand might erode like “Schlitz”

B) Introduce Light Beer under a
different Brand Name

ADVANTAGES DISADVANTAGES

Mountain Man Lager will not get High advertising costs

diluted and remain intact

Increase in Revenue and Market Share Difficult to build new brand name
when branded Light beer is already in
market
 RISKS
• New product could get lost
• New product could damage the market share
and positive customer based brand equity of the
premium Mountain Man Lager
• Some risks also associated with success of
advertising campaigns
 ANALYSIS
Variable per Barrel cost for Mountain Man
Lager(as mentioned in case study) : $66.93
Variable per barrel price of Mountain Man Light:
$4.69+$66.93=$71.62
Estimated market price (Light Beer) per barrel
that they can keep=$100
Gains per barrel=$100-$71.62=$28.38
SG&A costs=$900,0000 (annually)
Min. Advertising Costs=$750000 (six months)
Total Investment=$1.65 million

No. of barrels they can produce= $1.65

million/$28.38(per barrel)
=approx 58140
 CONCLUSION
Now, if the market share is to grow by 0.25% each
year, Mountain Man Light may be able to cover
up its investment cost in few years.

So, I think Chris Prangel should take the risk of

setting up Mountain Man Light Beer.
THANK
YOU
Created by Ramit Khurana, Guru Nanak Dev
University, during a Marketing Internship
under Prof. Sameer Mathur, IIM Lucknow.