Mmbc Study
MMBC; what has made this company so successful and what distinguishes it from competitors:
• Brand Loyalty
• Older working class, blue collar
• Effective marketing
• Sales team - "Grass roots" marketing
• 70% consumed at home
• higher alcohol %
Based on the numerical data and brand loyalty we could make a few financial assumptions.
1. Mountain Man Brewing Company will only be able to achieve .15% of the light beer industry market share.
2. Mountain Man Brewing Company will spend $1,500,000 on advertising their new light beer in their first year.
3. In association with producing a light beer, Mountain Man Brewing Company will have an additional $69,000 in fixed expenses per year.
4. Mountain Man Brewing Company will be able to sell their light beer at $0.29 per bottle.
5. Mountain Man Light will not erode sales of Mountain Man Lager anytime in the near future.
6. All else will be help comparable to the current capital structure of Mountain Man Brewing Company.
What may have caused MMBC’s decline in spite of its strong brand in terms of the beer market in general, as well as the market MMBC serves.
• Alternate beverages
• health concerns
• tax increases
• Consumer changes/shift in tastes towards light beer
• Limited distribution channels -shelf space
• very competitive industry and capital intensive
MMBC introducing a light beer could have some pros and cons:
Pros -
• Gaining younger demographics
• Diverse product portfolio
• May be MMBC could create a unique Light beer
Cons -
• Alienate existing customers
• Dilute the existing brand equity in terms of image - particularly the brand stands for Lager with higher alcohol %
• Decrease/ cannibalize shelf space.
• More expensive to produce
• Light beer already has a strong presence.
MMCB should target younger drinking aged adults at sporting events or venues. Especially some extreme sports events; example major concerts, this would be popular in this segment.
• Brand Loyalty
• Older working class, blue collar
• Effective marketing
• Sales team - "Grass roots" marketing
• 70% consumed at home
• higher alcohol %
Based on the numerical data and brand loyalty we could make a few financial assumptions.
1. Mountain Man Brewing Company will only be able to achieve .15% of the light beer industry market share.
2. Mountain Man Brewing Company will spend $1,500,000 on advertising their new light beer in their first year.
3. In association with producing a light beer, Mountain Man Brewing Company will have an additional $69,000 in fixed expenses per year.
4. Mountain Man Brewing Company will be able to sell their light beer at $0.29 per bottle.
5. Mountain Man Light will not erode sales of Mountain Man Lager anytime in the near future.
6. All else will be help comparable to the current capital structure of Mountain Man Brewing Company.
What may have caused MMBC’s decline in spite of its strong brand in terms of the beer market in general, as well as the market MMBC serves.
• Alternate beverages
• health concerns
• tax increases
• Consumer changes/shift in tastes towards light beer
• Limited distribution channels -shelf space
• very competitive industry and capital intensive
MMBC introducing a light beer could have some pros and cons:
Pros -
• Gaining younger demographics
• Diverse product portfolio
• May be MMBC could create a unique Light beer
Cons -
• Alienate existing customers
• Dilute the existing brand equity in terms of image - particularly the brand stands for Lager with higher alcohol %
• Decrease/ cannibalize shelf space.
• More expensive to produce
• Light beer already has a strong presence.
MMCB should target younger drinking aged adults at sporting events or venues. Especially some extreme sports events; example major concerts, this would be popular in this segment.