MARKETING MANAGEMENT BADM 520

TEAM M414

Briefly describe team member’s contribution

Team Member Name
to this assignment
James Gagen contributor
Chris Cheng contributor
Jie Zhou contributor

MEMORANDUM
TO: Oscar Prangel, President
FROM: Chris Prangel, Marketing Operations Manager
DATE: 14 September 2021
SUBJECT: Mountain Man Light

The challenge that Mountain Main Brewing Company (MMBC) is facing is a decline in sales
(averaging 2% per annum) because of shifting consumer preference from local premium beers to
light beer. To counter the decline in sales revenue it is recommended that MMBC extend its
brand to include a product in the domestic light beer market. As part of this brand extension
MMBC must seek to attract female and younger customers. MMBC should do this through
implementing promotion that draws on transferable attributes to the light beer market such as
MMBC’s heritage, independent nature, and general awareness of the Mountain Man brand.
In order to hedge the sales decline in the domestic premium beer market, MMBC must enter the
light beer market with a strategy of product line extension. The light beer market represents
50.4% of all beer sales in the East Central Region and expected to continue growing a 4%
CAGR. Research (Exhibits 1 & 2) highlights the domestic light beer segment as displaying
trends of gender-balanced, consumed by all-age groups and similar popularity among low-
income, mid-income and high-income populations. Understanding the trends, a product line
extension to light beer will improve the diversity of MMBC`s brand equity, leading to more
popularity amongst younger and female consumers and the brand association may even lead to
sales boost of the lager beer. Extension does have some drawbacks. The potential alienating of
loyal customers and eroding of brand equity, the stretching of current distribution and retailing
tactics as well as huge investment of advertising, packaging, warehousing of the new line of
product are critical to evaluate.
Launching Mountain Man Light into the domestic light beer market would attract new customers
and help boost sales revenue while keeping existing customers loyal to Mountain Man Lager. To
be competitive, MMBC should rethink its market positioning and adjust its plan and strategy to
address potential new customer needs with a targeted marketing mix. Through brand extension
MMBC can exploit one of MMBC’s unique advantages in that it has is its well-trained staff and
an existing production line, that can produce light beer. MMBC can draw on existing packaging
to use existing brand awareness to attract consumers to the new product. Although production
costs of Mountain Man Light is 7% more than Mountain Man Larger pricing of Mountain Man
Light needs to be like competitors. Mountain Man Light needs to be distributed to locations
where young customers can be targeted directly (pubs and bars). Mountain Man Light’s
promotion must include MMBC’s excellent brand recognition among potential customers, its
reputation for smoothness and drinkability and MMBC’s independent nature. Mountain Man
Light product should also be promoted through social and online media so that customers of
younger age groups can easily know about new product and the context of the marketing should
be put in a certain way to relate to young and female customers. Although there is strong Fit,
Leverage and Opportunity for Mountain Man Light, drawbacks of this plan include the light beer
market is incredibly competitive with extensive marketing required to raise brand awareness.
MMBC needs to be ensure existing customers are not lost to other beer products. Finally, the
change needs to be fully supported by MMBC’s executives as reversing the decline in sales will
take time.
Exhibit 1

Profile of Beer Drinkers by Beer Type by Key Demographics, 2005

Domestic Light Beer Domestic Premium Beer Mountain Man Lager

Gender
Male 58% 68% 81%
Female 42% 32% 19%

Age
21-24 9% 8% 2%
25-34 20% 20% 15%
35-44 24% 23% 19%
45-54 22% 23% 32%
55-64 14% 14% 19%
65+ 12% 12% 13%

Household Income
under $25k 14% 16% 20%
$25k-49.9k 25% 24% 27%
$50k-74.9k 21% 21% 25%
$75k-99.9k 16% 15% 15%
$100k+ 24% 23% 13%
Source: Brief Cases – Mountain Man Brewing Company: Bringing the Brand to Light

Exhibit 2

Graph representing beer consumption by gender