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Communicating Brand Strategy By Mark Reisler
1. Mountain Man Brewery is experiencing declining sales for the first time in the company’s history
1) Age Demographics • Mountain Man’s beer drinker’s
are getting older and decreasing
their frequency of purchases
• As Mountain Man’s beer
drinker’s are aging the children of
Proof a Mountain Man drinker are not
choosing Mountain Man beer as
Central East 2004 2005 2006E their primary choice
Region
Market Size 38,678,720 37,191,077 35,703,434
overall 2) Increased presence • Distributors supporting beer
Market Size 4,718,618 4,648,885 4,462,929 of large multi-national brands on basis of turnover and
MM brands in Mountain margins; dropping brands that
Competes in do not contribute to bottom line
Man’s distribution area
MM share 530,400 520,000 509,600 (Case Fact) • Large brands maintain
(Barrels) economies of scale in brewing,
Profit $ $4,887,636 $4,791,800 $4,695,964 transportation and marketing;
Increased pressure
• Mountain Man is not a
3) Distributors not popular customer to
willing to help build distributors because of small
Mountain Man market share presents
brand awareness • Small shipments of under
600,000 barrels annually.
2. Mountain Man provides a high quality beer that hard working men enjoy
Loyal – Hard Working - Deserving Legacy – American – Gold Standard
A Mountain Man beer drinker Mountain Man Brewing Company
• Blue Collar •Legacy Beer
• Middle to low income men over age •High quality
45 •Rich and bold flavour
• Purchase beer at off premise •Mouth watering beer
location (liquor stores) •Drinkability
• Working man (trades) (large • Mountain Man is authentic
population of workers) • Best beer in West Virginia
• Since 1925 Oscar has had the same • America’s championship lager
customers, rugged, middle age men • Family owned
from the coal miners union. • Strong brand image in East Central
Region
•Brand loyalty rate of 53% • Small sales force (focus- getting off
premise locations)
• Old management transitioning to
younger management
A small amount of MMBC’s blue • Unaided response rate of 67%, men in
collar customers accounted for the East Central Region know this beer!
a large percentage of sales
“We manufacture an exceptional beer with a great brand
name, we’ve never lost sight of our core customers, and
we’ve never been seduced by the other guy’s market”
3. Mountain Man Brewery competes on similar dimensions as other beer companies
Beers Price (6-pack)~ Taste (customer’s
perception) Mountain Man is fulfilling the
need of customers that want a
Anheuser-Busch $5.00 Typical high quality beer at a reasonable
price.
Miller $5.10 Typical
2nd tier domestic $3.99-$4.99 Mid • This places Mountain Man as a
regional Craft Brewer and in direct
Imports $6.00+ Mid competition with brewers like Sam
Adams, Harpoon and the 50 other
Coors $4.99 Typical
regional craft brewers.
Mountain Man $4.99 Bold
Craft Brewers $4.99+ Bold •The Advantage of being a regional
craft brewer is:
1) Known for quality and taste
Price High 2) Distribution channels are
already set up in most states
3) Customers of a Craft beer
are always loyal
• The Disadvantage of a Craft
Bold Flavours Brewery:
Typical 1) High competition (980
Flavours brewpubs, 380
microbreweries and 50
regional brewers)
2) Low barrel production,
therefore distributors
hesitate to build brand image
Price Low
4. Mountain Man needs alternatives to fit three core dimensions
Must reverse declining sales trend and turn a profit
within two years of investment
• Mountain Man is able to invest approximately $1.3
million dollars
• It is expected to achieve a 12% return within two
years of the investment or $156,000
• The strategy needs to make financial sense for the
long term sustainability of Mountain Man
All dimensions must be in
line for Mountain Man to
be successful
The strategy can not alienate Mountain Fit with the Mountain Man brand
Man’s Core customers • Mountain Man brews high quality beer and is
• The core of Mountain Man’s business relies known for its drinkability and bold taste
on their relationships with their customers • The Mountain Man brand is a man’s brand
• These customers need not feel like Mountain with rich heritage in the USA
Man’s commitment to them is in jeopardy • The beer is packaged with a label that says to
• The strategy must hold on to current loyal the man drinking it, that you deserve a good
customers, while producing increased profits beer
5. Launching a light beer is not for Mountain Man
1) Negative profits for at least the first two years
Mountain Man 2005 2006 2007 • Very high cost to build new light beer brand
• Negative profits for at least the first two years after launch
Mountain Man Lager
$3,087,396 $3,028,674 $2,971,127 • Does not raise MMBC’s bottom line
• Does not increase chances of distributors building brand
Mountain Man Light
- $1,452,395 $1,450,530 • Cost of goods is increase by nearly $5 per barrel
• Very difficult to compete in light beer because all other
Mountain Man Profit
$3,087,396 $1,576,280 $1,520,597 brands are developing light beer as well
• Light beer will take away facings in off premise locations
from regular Mountain Man lager, decreasing sales
2) Extremely high competition, Mountain Man is lagging
Light Beer 2005
Market Share Mountain Man will not be able to steal market share from any of the competitors:
Anheuser- 54% • 90% of the light beer category is owned by the three largest beer companies in
Busch the United States
• larger advertising budget
Miller 24%
• Greater pull with distributors
• Increase the bottom line of off premise stores and where beer is sold
Coors 11%
• Stronger brand image across the United States
• Pull strategy marketing (people know about these light beers)
Other Brands 8%
Imports 2%
3) Light beer does not fit the Mountain Man Culture
•Mountain Man is a beer for the hardworking man, and has always been a beer for the hard working man, light beer
drinkers tend to be younger college students
• Mountain Man is a company that focuses on building a relationship with their customers, this is not the case with a light
beer drinker
• Mountain Man beer is pushed onto consumers, building brand awareness of Mountain Man Light will cause MMBC to
switch to a pull strategy where major brands will over power them.
6. Increase Mountain Man market share in East Central Region
1) Increase facings:
Currently: • Increase facings within the off premise channels by
• MMBC holds less than 0.5% share in East targeting selected chain stores that fit with the modus
Central Region operandi of the Mountain Man lager customer
•MMBC currently sells 70% of their beer to off
premise locations (liquor stores, supermarkets) Will have to work hand in hand to be
• MMBC holds top market position among successful
lagers in West Virginia
• 60% of their beer purchase is by blue collar 2) Increase awareness:
workers or $1.8 million in profit • leveraging the unaided brand awareness of Mountain
Man to 75% instead of 67%
• ROI = $664,925 (approximately)
• Warning- this may cost MMBC more than $1.3million
The Problems
Value of Investment: No differentiating factors from competition:
•Strategy will return profit in due time • MMBC will still keep the same market position
• It took MMBC to build an unaided brand and will be competing against brands on price
awareness rate of 67% over 50 years and taste
• It will be very difficult to gain a new loyal • Mountain Man Lager will never have pull with
customer quickly off premise locations to have the facings they
• The cost of advertising and trade promotions want to increase growth exponentially
will probably be more than what MMBC is • due to greater pull from larger brands
willing to spend
• High risk, Mid to low reward Position stays the same, difficult to
compete with larger brands on
facings
7. Enter new markets in close proximity will increase lead generation
• West Virginia is a central hub for distribution
channels
•Located in the East Central Region, but situated
better to serve in the surrounding states to the
south and the east
• Virginia, Pennsylvania, Tennessee, North
Carolina, Maryland, New Jersey
2005 Population (in
2005 Population (in Millions)
Millions)
Tennessee 5.9
West Virginia 1.8
Virginia 7.5
Ohio 11.4
N.Carolina 8.6
Illinois 12.6
Maryland 5.8
Indiana 6.2
New Jersey 8.6
Michigan 10.0
Pennsylvania 12.4
•By Entering these six other states MMBC’s population of potential
users increases by 48.8 million people and approximately 24.4
million males
• These states are easily accessible via major highways running
through West Virginia
• Strong presents of hard working men that fit MMBC target
customers
8. Mountain Man Brewing Company heard the call from hard working American men for a beer that is
accessible and of award winning stature, which is why Mountain Man Brewing Company is expanding
their distribution network
2005 Price High
Anheuser –Busch
Miller
Bold Flavours
Coors
Typical
Flavours Second Tier Domestic
Mountain Man
Imports
Craft
Price Low
High 2006
Quality
•Mountain Man is competing in war that they can not win,
Small Large
with dimensions of price and flavour Distributi Distribution
• By changing the dimensions that they compete on, MMBC on Network
Network
can now create a competitive advantage for themselves
among Craft brewers
• By positioning themselves as a high quality beer with Low
a relatively large distribution network, it decreases Quality
competition for MMBC and makes their award winning
lager accessible to hard working men
• Mountain Man is heavily reliant on their current
customers, by increasing their distribution network
MMBC will gain new brand loyal customers
9. Enter new markets in close proximity will increase sales and build the Mountain Man brand
Entering new markets will lead to stronger relationships 2006E 2007E
with distributors
• Increased sales Investment $1.3MM $1.3MM
• Giving the distributors more work will increase their
bottom line and return a greater profit Revenue $4.3 MM $7.2MM
• They will be more helpful building MMBC’s brand in
Profit $282, 315 $451,704
the states that Mountain Man distributes too
• MMBC will have a stronger presence on the east Barrel 16,500 33,000
coast which can lead to future distribution nationally
Increased amount of awareness among target age
Process: • MMBC will be able to target a larger broader base of 40+
• Enter one new state every year starting with year olds
Pennsylvania • Greater chance to build brand awareness through gaining
• Keep same amount of facings and focus on access to a larger population
off premise locations (70% of distribution) • As sales increase and overall profit increases there is
• Leverage relationships with distributors and
use them as a collaborator
opportunity to build brand loyalty amongst target
• Increase sales force in new states to push customers
the product
• Penetrate pricing strategy to show value and Do what MMBC does well
maintain customer loyalty with current • Brewing a high quality lager should be shared with
customer
all surrounding states
• MMBC will gain recognition for their award
winning lager on a larger national presence
• MMBC will be one of few Craft brewers to have a
large scale presence in the United States