Company is one of many local companies that has been threatened by large corporations. This case focuses on a family-owned, local company threatened by decline in sales. The new marketing operations manager, Chris Prearrange, has been faced with the challenge of product innovation to help the company improve sales. The introduction of a lighter beer is the solution Prearrange landed on while deciding the company’s future. With many doubts from many company employees including the company owner and Chris’ father, Oscar, he was determined to make this new product a success.
Several concerns came to light as Chris was researching the new product and the target market it would serve. He found MOB to be mostly desired by 45-54 year-old males with low to medium income level. Small percentage of blue-collar customers were found to have the highest customer loyalty with largest sales percentage. Even though the results of this research showed strong brand loyalty and support of “anti-big-business” values, Chris knew that MOB would need to capture more customers in order to stay competitive and improve sales.
Research showed that early to late twenties population preferred light beer to any other. This would also be more attractive to male customers who prefer light beer to any other. Even though Chris wanted to gain more customers, however, he did not want to lose any of the current ones who were loyal to the brand. Tradition and a strong brand are some of the reasons why customers preferred Mountain Man Lager to any other large or imported brew. Shelf space is another reason Chris was skeptical about Mountain Man Light.
Some grocery stores may not be willing to sacrifice other products’ shelf space for the light beer, therefore MOB would be forced to sacrifice Lager shelf space for the Light. The value of a product may come from many factors. Some customers may value a product more than others because it has more of what they are looking for. The type of beer a person drinks says a lot about who they are. Those who drink Mountain Man Lager are supporter of smaller companies and do not keep up with trends or try new beer; they know what they like and they stick with it.
Women like drinking lighter beer to watch the calorie content and leave the bitterness while consumers in their early twenties simply did not experience enough to be loyal to a brand. Some beer drinkers may even be influenced by what is trendy; such as corona and lime or whatever their friends are drinking. All consumers define value differently; therefore another may not value what is valued by one. Mountain Man Brewing Company has many strengths as well as weaknesses when trying to pursue a new product. Table 1 shows the company’s SOOT analysis of establishing a new product.
However, low advertising efforts and the lack of grass-roots marketing makes the brand lose its intimate feel that many customers like. It is also not up to date with the younger generation of light beer drinkers, which can gain a large market share increasing sales. However, entering light beer market may come with many threats of large competitors with a well-established light beer brand that moms with a very high marketing price causing sale price to rise.
Though it is crucial to keep up with current trends, it is sometimes more economical to stick with what the brand really is. Younger generation such as college students are looking for cheap light beer, therefore higher price may be the deciding factor when making their choice. Advertising Mountain Man Lager as the traditional beer that sticks to what they know may be the better alternative. Using grass-roots advertising will bring the brand the intimacy it needs with the customers to gain a larger market share to raise the beer overall sales.