Oscar Prangel Case
Introduction
Oscar Prangel, owner and president, of Mountain Man Brewing Company must decide on whether or not joining the light beer market is beneficial to the company. Mountain Man Brewing Company is located in the New River coal region of West Virginia and has been specializing in making lager since 1925. Their unique family recipe that includes combining a selection of rare Bavarian hops and unusual strains of barley gives their lager a distinct bitter taste that their consumers enjoy. Their main consumers are blue-collared, middle-to-lower class men age of 45 to 54 years old (Appendix A). These consumers view Mountain Man Lager as a “manly” drink because of its history and rugged décor, (based off of the picture of the coal miners on the front of the package). These consumers make up 60% of the Mountain Man Lager sales in the East Central region. Even though it may seem that Mountain Man Lager is successful, Oscar’s son, Chris Prangel, has recently noticed a rise in light beer consumption by about 4% annually (Appendix B). Chris feels that by introducing a light beer to Mountain Man’s brand can capture a segment of the market that has yet to be captured by other companies. Mountain Man’s revenues are also decreasing by 2% annually (Appendix C) so with the growing rate of light beer consumption Chris thinks that Mountain Man’s revenue would thrive with the introduction. However, with the increasing number of competition and the declining of revenue for their lager, and the amount that they have to spend on introducing the light beer, Chris must decide whether to:
Introduce the light beer as an extension of the Mountain Man brand name.
Introduce the light beer under a different name so that the Mountain Man brand doesn’t lose its identity or major consumers.
Do not introduce light beer at all.
A Successful Brand
Mountain Man Brewing Company distributes its lager to several states outside West Virginia including Illinois, Indiana, Michigan, Wisconsin, and Ohio. In 2005 Mountain Man was generating revenue over $50 million with 520,000 barrels sold, making the selling price per barrel $97. Mountain Man has become an award-winning brand in their native West Virginia region due to its authenticity by instilling the “toughness” of the beer. The use of the grass roots method of advertisement has kept advertising costs relatively low. Many of the consumers drink Mountain Man Lager because they view it as a legacy drink for example: their dads drank it and their granddads drank it so they drink it as well. The bitter taste, dark color, higher percentage of alcohol content and the historical feel helps capture and maintain their loyal consumer market, which makes up a total of 53% of the market. Approximately 70% of the consumption of