Mountain Man

With recent declining sales for Mountain Man Beer Company (MMBC), Chris Prangel is considering launching Mountain Man Light as a brand extension aligned with changes in beer drinkers’ preferences. He is seeking to maximize market coverage while minimizing brand overlap, and at the same time avoiding any brand equity damage, as MMBC’s core consumer segment is significantly different from the new targeted segment. Chris expects to negate declining sales of Mountain Man Lager and capture market share in the fast-growing light beer category, which accounted for 50.4% of all beer sales by volume in 2005 in the East Central Region (Exhibit 1). More specifically, Chris wants to capitalize on Mountain Man’s brand recognition in the region and capture a meaningful share of the local light beer market, a market in which MMBC currently has no presence. In addition, he is hoping a successful launch of Mountain Man Light in the local on-premise locations will boost the lagging sales of Mountain Man Lager.
In order for the launch of Mountain Man Light to be successful, several factors would have to align to obtain the goal of MMBC obtaining significant initial market share and subsequent years’ growth in the light-beer market. First, the new campaign targeting the light beer consumers, which consists largely of younger drinkers, would not erode the company’s brand equity by alienating its core customer base, consisting of the “swing” and baby boomer generations. (Abelli, 2007) Second, MMBC would have to minimize the light beer’s cannibalization of its lager. MMBC’s sales staff would have to convince off-premise retailers to grant MMBC “incremental shelf space” instead of substituting cases of light product for the lager product. MMBC would also have to be certain that the light’s sales would compensate for any potential cannibalization of lager’s sales. Third, Chris would need to convince the senior management team that light’s sales would generate a profit in two years after