Mountain Man Brewing Company: A Marketing Case Study

Background

In 1925, Guntar Prangel founded Mountain Man Brewing Company (MMBC) in the New River coal region of West Virginia. He used an old family brew recipe that seemed to fit in perfectly with the ruggedness of the region; it is made with rare types of Bavarian hops and barley and has a strong bitter flavor that sets it apart from its competitors. Prangel called this beer Mountain Man Lager, and its sales took off.

By the 1960s, the family brewery had gained a reputation of great quality and had strong brand equity in the East Central region of the United States. Then, by 2005, Mountain Man Brewing Company “was a legacy brew in a mature business,” bringing in over $50 million through it sales of 520,000 barrels of Mountain Man Lager. The company sells its beers primarily in Illinois, Indiana, Michigan, Ohio, and of course, West Virginia and is considered a second-tier domestic producer in the beer industry. Mountain Man Lager is packaged in a brown bottle with its original 1925 label design of a group of coal miners on the front. It is usually priced at $2.25 for a 12-ounce class at a bar or $4.99 for a six-pack in a store. This pricing is similar to that of domestic brands like Miller and Budweiser (Anheuser-Busch), placing Mountain Man Lager in a median price range for domestic beer and cheaper than most microbrews.

Instead of having a variety of products, Mountain Man Brewing Company focused its energies on making one exceptional beer aimed at the blue-collar working man and inspired by the coal-mining economy of West Virginia. Mountain Man Lager was at the top of the beer market for lagers in West Virginia for 50 years and is respected for its regionalism and traditionalism. A study in West Virginia resulted in Mountain Man Lager being rated as the best known regional beer, with 67% of adults voting in its favor. It also won the title of “Best Beer in West Virginia” for eight straight years starting in 1997, as well as “Best Beer in Indiana” and “America’s Championship Lager.” The distinct bitterness and high alcohol content make Mountain Man Lager unique. In addition, Mountain Man Brewing company has a very high brand awareness. In fact, “market research showed that Mountain Man was as recognizable a brand among working-class males in the East Central region as Chevrolet and John Deere.” Mountain Man Lager is the working man’s beer and commands brand loyalty from many blue-collar workers in the region.

Brand Challenges and Directions

Despite the company’s remarkable success in the past, Mountain Man Brewing Company is now experiencing a significant drop in sales. Prangel’s grandson, Chris Prangel, is now in charge of the company and is trying to determine how to save his family’s business. Because the light beer industry is growing at a compound annual rate of 4% in the last six years, Prangel is trying to determine if it would be lucrative for Mountain Man Brewing Company to enter the light beer market. The introduction of Mountain Man Light would likely bring in a new market segment of drinkers, including a younger demographic as well as women, both of whom tend to buy light beer more than any other kind of beer. The light beer market is growing steadily and accounted for 50.4% of volume beer sales in 2005, nearly twice what it was in 2001. However, while young people tend to buy light beers, they also tend to purchase cheaper and more mainstream brands. If Mountain Man Brewing Company were to extend their brand to include Mountain Man Light, the investment would be extremely costly for them, and could either pay off or drive their company completely into the ground.

Marketing Decision:

We believe that Mountain Man Brewing Company should not expand its product line to include Mountain Man Light because we found that the risks outweigh the benefits. Our group came to this decision by conducting a SWOT analysis of potentially entering the light beer market. Strengths and opportunities for Mountain Man Brewing entering the light beer market include gaining a greater customer base, including the younger “first time drinker” demographic (age 21-27) that spent 27% of the total beer consumption in 2005 and is steadily rising. The greater customer base also would encompass more female customers, who tend to lean towards lighter beer options. This expansion could potentially lead to higher rates of lifetime brand loyalty. Additionally, the company could enhance brand awareness by showing its diversity in product line.

Weaknesses and threats of creating Mountain Man Light include the fact that there is already stiff competition in the light beer market from major domestic (i.e. Coors) and other second-tier domestic (i.e. Pabst Blue Ribbon) producers. Anheuser-Busch and Miller alone account for a combined 73% of light beer sales in the East Central region. The “first time drinker” demographic tends to purchase more mainstream domestic beers and therefore, has less brand loyalty. As a result, we feel that Mountain Man will get lost on the shelves in comparison. The “first time drinker” demographic also tends to purchase the cheapest beer they can find, and although Mountain Man’s lager is relatively cheap, major domestic producers continue to offer the lowest prices. In addition, the company does not have the capital to fund a new product launch, which would be extremely expensive in order to counteract its competition. If the launch went poorly, the company would more than likely be shut down or go bankrupt.

It is our group’s opinion that if Mountain Man introduces a new product into the light beer market, it will tarnish the brand’s current reputation and equity. Mountain Man Brewing Company has worked for 90 years to perfect its widely recognized lager, which should remain the sole focus and heart of the company. As an alternative to product line expansion, we propose that Mountain Man Brewing Company use its money and available resources to expand their brand image and identity via new marketing strategies, such as updated advertising, logo rebranding, and working to attract new customers to their existing product.

Value Proposition

Before coming up with specific marketing campaigns, our team assessed how to create value for Mountain Man Brewing Company’s target customers. In doing so, we analyzed which customers to serve, including market segmentation and targeting, and which value proposition to offer, including differentiation and positioning. In terms of segmentation and targeting, we have decided to continue targeting 40+, blue-collar (middle class), rugged men in the region because this target market is where the majority of the company’s customer brand loyalty and purchasing power is already generated. However, we are also adding another target market segment: 25-40 year-old active, upper-middle class men and women who enjoy outdoor recreation (i.e. mountain climbing, camping, etc.). Although this is a more concentrated market targeting strategy, our group believes that the company can gain more customer brand loyalty from this segment. Since this demographic is still relatively young, they might not want to spend a lot of money on beer in order to save money for adventure seeking or their future. Mountain Man Lager caters to these customers’ particular desires by providing a beer that is not an average Bud Light but rather a unique lager from a regional business that can be purchased at a reasonable price.

In terms of differentiating the Mountain Man Lager, the company has the competitive advantage of offering a cheaply priced beer without sacrificing its robust, bitter taste. Some second-tier producers can beat the company on price, but their beers tend to be more watered-down and lighter, which allows Mountain Man to appeal to customers who want more taste from an inexpensive beer. On the other hand, some craft brewing companies might compete against the company in terms of flavor similarities, but Mountain Man would be a cheaper option for customers. The company is positioning itself with the rugged, middle and upper-middle class customers who work hard and want a dependable, great tasting beer at a low cost that other competitors cannot offer these target markets. Whether Mountain Man Brewing customers are coming back from a long day at the coal-mining factor or celebrating hiking the Appalachian Trail, at the end of the day, they can reach for a Mountain Man lager and know that they have put in the labor and exertion to deserve a beer this good. We implemented several marketing strategies to promote the company’s new positioning and value proposition.

Marketing Strategy

In an effort to build brand awareness and equity for Mountain Man Brewing, our recommended strategies include updating the company’s brand, increasing the brand’s social media presence, creating interactive promotional materials, and emphasizing Mountain Man as the regional beer brand of the East Central region of the United States.

We also recommend that Mountain Man develop a brand personality—a rugged “Mountain Man” that the target consumers can relate to. Advertisers classify brand personalities as valuable in increasing brand engagement and brand attachment. To be effective, Mountain Man needs a well-defined brand personality with a strong brand image and brand voice. We believe that, because the consumer already connects with the ruggedness of the company, developing this brand character, “Mountain Man,” will be a smooth and easy transition for the company. Ultimately, the brand personality is already created through the brand name and image but just needs to be enhanced and advertised. Choosing a real person to be associated with the image of the brand is also a way to engage customers because, with enough repetition, the value and characteristics of the person will be transferred to the brand. Because of this, it is important to take caution in selecting who will represent the brand. It could, for example, be a well respected local celebrity whose values and image sync well with those of the company. He could be present at events where Mountain Man is marketed, and he could frequent bars where Mountain Man Lager is sold.

The logo should more accurately symbolize the new “Mountain Man” character. To connect back to the company’s historic coal-mining roots, we suggest that the logo be a single coal miner that the consumer can easily recognize and connect with the brand. We also suggest creating a slogan that matches the logo, character, and brand, something simple but effective like “Mountain Man—Reach Your Peak.” Enjoying Mountain Man Lager will be the peak of the customers’ days.

Another marketing strategy proposal would be to intensify Mountain Man’s social media presence. As we mentioned previously, to be successful, Mountain Man will need to utilize new media marketing strategies to garner increased brand awareness, especially among their new younger target demographic. They need a noticeable presence on social media sites, like Facebook, Instagram, and Twitter, and should frequently interact with their followers. By interacting, it allows Mountain Man insight into the opinions and thoughts of their consumers, and they can immediately notice and respond to any issues that customers might have with their products. Mountain Man can also use social media to give their consumers incentives to buy their products, such as coupon codes.

Mountain Man could launch a social media campaign surrounding the popular trend, “No Shave November.” Because “No Shave November” directly connects with the brand personality of “Mountain Man,” it will also connect with the Mountain Man consumer demographic. Mountain Man could encourage users to post pictures of their beards and their Mountain Man beer with the hashtag #MMBCNoShaveNovember. Apart from such social media campaigns, Mountain Man can also keep their followers updated on promotional events, brand news, etc.

From Mountain Man’s previous marketing experience, traditional advertising has not been as effective as grassroots marketing in building beer brand awareness in the East Central region of the United States. Because of this, Mountain Man should continue to rely on grassroots marketing to spread its message instead of spending large amounts of money on ineffective traditional advertising. Because the target audience includes younger beer drinkers that hold “anti-big-business” values and show appreciation for Mountain Man’s position as an independent brewery, sticking with this local identity would be more effective for the company’s brand. Because Mountain Man has relied successfully on its history and status as an independent, family-owned brewery in the past to create an aura of authenticity, we believe that continuing to align the beer with this local authenticity will be an effective marketing tactic.

Our final recommended marketing strategy involves the development of interactive promotional materials in order to increase brand awareness and consumer involvement in the brand. The business should execute this goal by having a presence in bars and pubs that serve Mountain Man and providing company-related materials such as koozies, coasters, flyers, and other promotional materials. Their celebrity promoter could make appearances here as well and help hand out the promotional materials, maybe even providing autographed items. Mountain Man should also be present at events in the East Central region, such as beer, music, and cultural festivals, to engage with their customers and hand out promotional materials.

Because our marketing plan has an emphasis on the fact that Mountain Man is a regional brand, we suggest incorporating brewery tours into our marketing plan. This will encourage tourism and will be another income channel for the company. Branding the brewery as an attraction in West Virginia will increase brand awareness to target audience outside of their loyal West Virginian consumers.

Measuring Marketing Success

When examining the success of these new marketing strategies in the future, we will analyze several factors. First, our group will measure how much social media presence the company has gained over the next year, including how many followers each of the company’s social media platforms has garnered and how many people have shared, posted, retweeted and/or used the brand hashtag. We will also conduct several virtual Twitter polls about consumer attitudes and buying behavior. This way, Mountain Man can get a real sense of whether it needs to continue improving its social media strategies as well as whether they are effectively reaching their new target demographic. These are customers who would be more involved in social media than the 40+, blue-color target market who tend to not be as tech-savvy.

We intend to conduct focus group testing with the Mountain Man’s loyal, blue-collar customer base in order to gauge customer reaction to the company’s brand enhancement and new marketing strategies. Subjects will be randomly selected to participate in focus group testing. As a way to quantify Mountain Man Brewing Company’s marketing progress, we will also determine the net marketing contribution (NMC), marketing return on investment, and marketing return on sales for this next year. Therefore, we will be able to access whether the new marketing strategies and brand positioning have directly profited the company as well as whether the marketing investment created substantial marketing productivity. If our group’s innovative marketing strategies and improvements of the brand are implemented properly, we expect them to prove to be effective in increasing company sales. Therefore, Mountain Man Brewing Company might soon regain its reputation as the leading beer company in the region.

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