MMBC; what has made this company so successful and what distinguishes it from competitors: •
Older working class, blue collar
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.
Mountain Man Brewing Company will only be able to achieve .15% of the light beer industry market share.
Mountain Man Brewing Company will spend $1,500,000 on advertising their new light beer in their first year.
In association with producing a light beer, Mountain Man Brewing Company will have an additional $69,000 in fixed expenses per year.
Mountain Man Brewing Company will be able to sell their light beer at $0.29 per bottle.
Mountain Man Light will not erode sales of Mountain Man Lager anytime in the near future.
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. •
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
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....
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