Week 9: Pricing and Distribution

Reading: * Marketing Management Chapters 14, 15 and 16 * Case: Mountain Man Brewing Company

Questions:

1. What has made the Mountain Man Brewing Company successful? What is distinctive about MMBC’s product, customers and brand equity?
Product
Mountain Man had high quality product. Those attributes included the smoothness, percentage of water content, and drinkability. The beer it produced was flavorful and bitter-tasting. Mountain Man had a well-known reputation as quality bee throughout the East Central region.
Customer
Mountain Man targeted clearly on the blue-collar, middle-to-lower income men whose age were over 45. These core drinkers had high loyalty to Mountain Man. Loyal …show more content…
Besides, to promote a new product also consumes advertising and agency costs. In the meantime, administrative and incremental SG&A costs were needed to support the operation. As a result, the marginal cost of the new product would increase compared to the original one.
To achieve break even in two year, Mountain Man needed to sell more barrels to cover the associated marketing as well as incremental expenses and make up the lost on company’s overall profit resulting from the promotion of the new product. Its market share had to be higher than brands like Miller Lite or Coors Lite at least. To be more accurate, the new Light should have at least a market share of 11% to 24% in order to beat the competitions.

5. Should MMBC introduce a light beer? What are the pro’s & cons?
Since Mountain Man was losing customers because the amount of original loyal consumers was decreasing and the taste of the public was changing, it had to introduce the new light line to maintain its total market share and profit.
Pros:
1. There would be more customers, especially younger people and women.
2. Profit would increase when it sold more products.
3. The new line would help Lager line have more visibility and awareness among potential buyers.
4. Market share and brand equity would also increase.
5. More distribution channels available such as restaurants and bars.
Cons:
1. Cannibalization
2. Dilute or erode the original brand equity.
3. More expenses are