Yellow Black Beer Quote Instagram Post

[Solved] Mountain Man Beer Case Study – Breakeven Analysis, Marketing Mix, and Launch Strategy

Mountain Man Beer Case Study is a case on marketing and new product introduction from HBR. Chris Prangel has recently joined his family-owned business and realized that the single SKU beer popular among blue collared employees is facing a decline in sales. The case narrates his journey and dilemma to launch a new product to counter declining sales.

Mountain man beer, Mountain man beer case study solution
Mountain Man Beer Case Study Solution

Mountain Man Beer Case Study: Brief Introduction

Mountain Man, a brewing company founded in 1925, over the years managed to gain a large share of the lager beer market for about  50 years due to its reputation.  of quality and tasty bitter taste.  Advancing the years the company is in decreased of sales of its product (lager beer)  by 4% and at the same time there is a great growth of light beers which make up  50% of the total sales of the beer market. The company is led by Chris Prangel who must make innovative decision regarding the brand.

For more Solutions to Case like Mountain Man beer, please refer our Case Studies Section

Mountain Man Beer Case Study: Problem Definition

Faced with a change in consumer preferences, the company is in a situation where it must decide whether to expand its product line to enter the   beer market.  light or maintain the commitment to its current line of beers.

Mountain Man Beer Case Study: Launch Analysis

Taking into account the current situation of  Mountain Man Beer Company, we can determine that the introduction of  Light Beer to its product portfolio could result in a great benefit for the company due to the growth of this product segment or within the market.  In addition, light beer accounted for   50.4% of volume sales during  2005 across the industry.

The key to the success of a  product launch is anchored in planning,  direction, organization, and control.  It is essential to take into account the needs of consumers so that they can have an effective return and as a consequence produce profits.  Currently, the brand transmits quality values to the consumer so  that  a  launch of a new product can have an impact in two ways:

  1. The brand could increase its sales through a  more effective positioning within the mind of the consumer.
  2. The alternative would be that the product is not equivalent to the quality standards of the    Mountain Man Lager product so that the overall brand perception is affected, as well as the values that it transmits to consumers.

 Launch  Pros

  •  Regional light beer project revenue growth of 4% per year.
  •  Spectacular implications for brand creation.
  • Increase in sales (segment of young   people who consume light  beer, key consumption target  for beer companies made up  of young people 21-27 years old (that do not yet  have established fidelity)
  •  Helps you get more  shelf space for your products
  •  Creating greater   product focus  among distributors  and retailers
  •     Growth     of the light beer category that had been steadily increasing market share and represents 50.4% of sales by volume during 2005 

(29.8 2001)

  •  Strategically important segment for the future of Mountain man beer company.
  •  Light beer newest    and fastest-growing product category
  •  Only light beer category that showed consistent growth.
  •  Helps increase  participation in  places where it was consumed in the lime: restaurants and bars

 Launch Cons

  • Costs:
    • $750,000 in an intensive advertising campaign
    • $  900,000 in incremental annual  costs
    • Increase in sales staff and constant marketing expenses.
    •  Lower contribution margin than Mountain Man Lager
  •  Difficulty reaching a sales volume of light beer competition brands such as Miller and  Coors Light due to the large sales and advertising force.
  • Risk of getting lost in the sea of introductions of new products.
  •  Product introduction takes time, resources, and attention away from the main product which is the main income.
  • Possibility of losing sight of main consumers by letting themselves enter the competing market.
  • Loss of  Mountain Man          Lager sales due to retailers not giving Mountain Man more gondola space and replacing lager product boxes with lager boxes light.

For more Solutions to Case like Mountain Man beer, please refer our Case Studies Section

Mountain Man Beer Case Study: Alternatives

To help  Chris,  we understand that there are four strategy options that could be applied in the company:  launch Mountain Man Light, invest in Mountain Man  Lager, launch Mountain Man Light under another mark or take no action.

Launch Mountain Man Light

 The more optimal and risky option is where the company launches the light version or the same Mountain Man brand.   We understand that a    brand launch could provide,  with the company’s support, new consumers,  as well as increased revenue and profits. On the other hand, this could cause cannibalization between products and cause the company to incur additional expenses such as advertising.

Invest in Mountain Man Lager

 Conservative option, where the company does not launch the new light version and invests the money in improving the existing Mountain Man Lager beer.   This alternative provides the possibility of continuing the business tradition, investing in the reinforcement of the brand by the target customer without affecting the culture or incurring extraordinary expenses. On the other hand,  it could be not accepted and cause losses,  as well as suffer a decrease in market share.

Launch Mountain Man Light under another brand

 Protectionist option, where the company creates the product under the name of another brand so as not to compromise the positioning of the original product and fight in the two beer markets,  but   It should seek to position light beer from scratch.  This completely separates the two brands and positions the target audience based on market research. 

 On the other hand, it may not be accepted as it would not have backing from the original brand, as well as incur production, branding, and extensive advertising expenses.

Do not take any action

 The less optimal and conservative option since they do not launch the light version and on the other hand do not reinforce the Mountain Man Lager brand,  thus continuing with the current strategy so as not to compromise with actions that   They hurt the profits of the company. If this option is realized, the company does not disburse additional money,  the positioning remains the same as well as the business culture. On the other hand, this could have an impact on a large decrease in customers and market share by not incorporating itself within the trends followed by consumers, existing the possibility of fading into the beer market. 

For more Solutions to Case like Mountain Man beer, please refer our Case Studies Section


After analyzing the different strategies, our recommendation is to relaunch the brand with a  Mountain Man Light beer aimed mainly at a new market niche that includes young people in the age range of 21 to 27 years, considered the primary target. This allows us to address the sector of consumers of light beer and without brand loyalty,  therefore, sales would increase.  

Our proposals are directly related to the people associated with our original positioning, but based on retro,  bohemian, and hipster culture,  among others, so that will attract the attention of the expected consumer.  It should be considered that these proposals do not have certain points in their favor such as expenses,  that advertising is a long-term investment so that You will see the return on it immediately, there is an uncertainty of the recovery time, and that the creation and branding of a young style can affect the current positioning.

For more Solutions to Case like Mountain Man beer, please refer our Case Studies Section

  Launch Strategy

We understand that  MMBC should carry out Mountain Man Light and we propose that an expectation campaign be made, creating concern towards the launch of the new product. 

We recommend that it be based on easy-to-remember phrases or concepts associated with the brand and that this be worked in conjunction with future advertising that is rooted in Mountain   Man Light.

Possible example

Place billboards in strategic locations with the highest flow of young people within West Virginia, so that as many people as possible see the campaign of expectation and   Generate word of mouth to Boca.  Later, carry out advertising campaigns via TV and radio. 

After several weeks of holding a    launch event,  we visualize it at a party,  aimed at the primary target, where the product at first hand and the positioning of  Mountain Man Light will be shown, who will not lose the identity of the company but will highlight factors that young people recognize are superior Res. A few weeks after the event, we will seek to use sales channels and social events, where the product will be tasted and tested blind so that they see that it is a beer that should not envy the larger version and in turn show that they are better beers than the competition in the beer market light.

Mountain Man Beer Case Study: Business Analysis

Mountain Man Beer Case Study: SWOT analysis

Recognized as quality beer in the market thus achieving a high reputation and various awards. First place among lager beers in West Virginia for 50 years.  Respectable market share. The main clientele considers  Mountain Man Lager to be the best-known regional beer on the market. High recognition for its loyalty (53% higher than the rest of its competitors)  Tasty beer with a bitter taste.   A high percentage of alcohol compared to its competitors.It had a single product that was mostly intended for a clientele such as workers over 45 with low and middle incomes. The market focused specifically on a region of the  United States. Only regional brands that had not expanded their products.
The distributors of the brand managed various brands therefore this avoided the reinforcement of the Man  Lager Brand. Health concerns.  Federal consumption tax. Initiatives that sought to moderate consumption.  The competition had increased in the region due to the nullity of laws that allowed stores to start to offer beers with great discounts.  – New products could hurt  Mountain Man Lager’s sales.  The United States represents the market with the highest consumption of beer worldwide.  Industry studies revealed that consumers between the ages of 21 and 27  represented a  key consumer segment. Growth of the light beer category  (50.4% volume for   2005).  The only category showing consistent growth.  Young consumers had a preference for light beers. – Observers show that new products introduced new consumers while maintaining the old ones.
Mountain Man Beer Case Study: SWOT Analysis

Mountain Man Beer Case Study: Competitor Share

Major domestic producers with a  74%  market share in the Mountain Man region.

 National Competitors Competitive Market  Share in Barrels by Brewery
Anheuser Busch42%
Miller Brewing Company23%
Adolf Coors Company9%
Mountain Man Beer Case Study: Competitor Share
  •    Second-tier domestic producers with a  12.5% market share in the East Central region (Pabst Brewing Company and Genessee).
  •  Imported beer company from Germany with a 12%  market share in the region (Beck,  Heineken, Molson, Corona).
  •  Craft beer industry with a market share of  1.5% of the total market.

For more Solutions to Case like Mountain Man beer, please refer our Case Studies Section

Mountain Man Beer Case Study: Segmentation

 Main clients: working class with low incomes over  45 years.


  • The United States was the most beer-consuming market in the  world at  the time.  Its sales were more than  $75  billion annually in 2005.
  •  U.S.  beer consumption per capita  suffers  a decrease of  2.3%
  • Wine and  spirits  begin to be consumed more in the United States
  •  Federal   excise tax increases
  •  Initiatives that encourage  moderation and personal responsibility are implemented
  • Health  concerns    increase
  • 18.3%  of beer sales in the  United States were concentrated in the   eastern central region.
  • In some states in the region (including West Virginia),  old  laws were  amended  limiting    promotions  on retail sales. As a result,   retail stores sold beer at deep discounts.
  • Light beers  in 2005  accounted  for    50.4%   of sales by volume,  compared to  29.8% in  2001.

The demand for  beer is inelastic in the market because   large economic fluctuations do not affect the consumption of this product.


  •  70% of  Mountain  Man’s beer  is sold outside the  factory through  distributors.
  • They established their own sales force    to get outlets outside  the factory such as liquor stores and supermarkets.

Mountain Man Beer Case Study: Marketing Mix

Make striking packaging  so that without changing the  essence of the  brand it is possible to capture the attention  of the target. Change the  shape of the bottle.Position Mountain Man  Light as a  more elite product next to   Mountain Man Lager, highlighting  Its  lower percentage of calories and different bottle  making it more striking in the eyes  of   different  targets. So it would be setting a  slightly higher  price than  the Mountain Lager.
Implement the same distribution channel that  Mountain Man Lager has,  to achieve  greater gondola  space  in the establishments  and achieve more consumers. Implement the  same distribution channel that  Mountain Man Lager has,   so that in the 
Establishments of wholesalers and  retailers The product manages to obtain a greater shelf space, attracting the attention of  the customer and resulting in a greater possibility of  sale     of   product.
Make another distribution channel  only directed towards Mountain Man Light, stores with hours extended, petrol pumps,  specific bases.  Use channels to reach our young target, they  can be  sporting events or concerts and social networks.  Since
     Free  trials at sporting events, as  well as  parties.     Perform blind tests, so that the  consumer sees the quality of beer and that should not  envy anything to the competition.
Mountain Man Beer Case Study: Marketing Mix

For more Solutions to Case like Mountain Man beer, please refer our Case Studies Section

Profitability Analysis

Profitability analysis of  light beer for the Mountain Man brand from 2005-2008 

Consumption of light Beer18,744,303,0019494075,0020273838,0021084972,00
Growth of light Beer 4%4%4%
Growth Estimate if MM Light Beer 0.25%0.5%0.75%
Sales Estimates of Barrels of beer 48735,00101369,00158136,00
Estimated Profits of MM 4727295,009832793,0015339192,00
Mountain Man Beer Case Study: Profitability Analysis 1

Profitability analysis without cannibalization

Price per Barrel97Fixed Cost255000000
Variable Cost71.62Barrels Needed for Profitability100472.81
Net Profits25.38Breakeven Numbers9745862.88
Mountain Man Beer Case Study: Profitability Analysis 2

Profitability analysis  with  20%  cannibalization plus a 2% loss

Price per Barrel97Fixed Cost2987226,00
Variable Cost71.62Barrels Needed for Profitability1177000,00
Net Profits25.38Breakeven Numbers11416900,00
Cannibilization+loss on Net Profits for the year 2005437226,00  
Mountain Man Beer Case Study: Profitability Analysis 3

 The data on the investment made to market light beer and the growth estimates, give an estimated return on investment in a time horizon of two years.   Even taking into account cannibalization, marketing the breed means obtaining benefits from the 3rd year.

For more Solutions to Case like Mountain Man beer, please refer our Case Studies Section