Under the pressure coming from large national brewers, MMBC is considering to extend its product line: launch Mountain Man Light to attract a new market segment and remain profitable. Although launching light beer may attract a new market segment and get more exposure for MMBC, MML may “drown” in the sea of large light beer brands and even lose loyal customers from its core brand Lager. The main customers of MMBC are blue collar, middle-to-lower income men over age 45. MMBC is famous for its “toughness”, so the market they serve is traditional baby boomer generations. In general, United States was the largest beer-consuming market in the world with over $75 billion in annual sales in 2005.
With the introduction of PRP, Pepsi boldly stated its confidence in PRP and announced to stop its Super Bowl advertisement. Pepsi aimed to win youth segment’s attention by appealing positive brand image with PRP. With abundant marketing budget, Pepsi quickly caught attention of millions of people and succeeded in improving its brand image; however, CPM of PRP is far from being an efficient marketing strategy and PRP’s contribution in market share is questionable. Despite the success in creating a new social media marketing platform, PRP alone is not enough to beat Coca-Cola’s aggressive marketing, and CSD market still covers a huge portion of beverage market to reduce marketing budget. In 2010, Super Bowl advertisement only equaled to 2.06 percent of the net income from CSD sales.
The strong branding of MMBC as the everyman’s down-to-earth beer has been instrumental in seeing it through the increased competition brought on by the development of large national brewers, which sealed the fates of many other regional breweries. Yet for all its success, MMBC faces serious challenges due to shifts in consumers’ tastes and preferences. MMBC’s revenue has been shrinking at a rate of 2% year-on-year in its maturing market. The prospect of its continual decline seems likely, as it faces tough competition from new products such as the “light” beer category. The “light” beer has proven itself to be a real threat to MMBC as it has dominated the beer industry and is the only beer category to have consistent growth in market share (see Fig.
71% accounted by off-premise retailers and 29% on-premise. The market grew at a rate of 42.5% from 2001 to 2006 and 10.2% from 2007-2011. Slower growth than past years is being attributed to market maturity, increased price, packaging competition, and the entrance of hybrid energy beverages. Energy beverage consumers limit their choice to only 1.4 different brands, on average. That indicates a very brand loyal consumer.
Mountain Man’s strong brand awareness motivates consumers to both purchase their lager and follow them to new products. * Weakness * A new product line will spread their thin resources and their financials do not allow them to advertise in the crowded light beer market. * Opportunities * Reach a younger demographic and gain share in on premise locations such as restaurants and bars. Regional revenue growth of the light beer product is steadily increasing by 4% annually. * Threats * Moving to a new product line could hurt the core brand.
However, in the late 80s, one of the most serious Coca-Cola competitors, Pepsi, implemented a new marketing strategy and caught up with its market share. The competition of the two companies was primarily based on taste. Pepsi introduced a series of commercials called “The Pepsi Challenge.” Surprisingly, consumers preferred Pepsi over Coca-Cola. Pepsi’s market share skyrocketed. Concerned with Pepsi’s success, Coca-Cola decided to replace its old formula with a sweeter variation and introduced a new product named “New Coke.” The author provided a detailed report about the $4 million budget that Coca-Cola spent on market research.
In the US and Canada, Dr Pepper Snapple Group, Inc. participates primarily in the flavored carbonated soft drink (CSD) market segment. In the non-CSDmarket segment in the US, the company participates primarily in the ready-to-drink teas, juice drinks, and mixer categories. The energy drink market in the US is the 4thlargest nonalcoholic beverage category, after carbonated soft drinks, sport drinks, and bottled water, but is the fastest growing one. The market is defined by major brands, including Red Bull, Monster Energy, and Rockstar. From 2001 to 2006, total energy beverage retail sales grew at an average annual rate of 42.5%.
As the world beer industry which was divided among four leading brewing companies accounted for only 22% of the global volume, this reflected a great opportunities easing the global expansion of Stella Artois. In mature markets, Interbrew maintained its existing market shares and improved efficiencies in production, distribution and marketing to exploit a growing potential towards upscale, premiums, and even specialty products. In growth markets the company consolidated and expanded new markets through acquisition in central Europe, Asia and South America to cope with the declining of domestic markets (Belgium) primarily due to its image of old-fashioned beer. Many consumers became increasingly attracted to the sophistication of premium and specialty beers as a result of Stella's global branding strategy. Although the global brands market was still small there were some trends that would improve this market segment: * There was expected higher demand for premium and economy priced beer * The internationalisation of the beer business * Global medias could be used for building brands * A global brand would create synergies in advertising and sponsoring and reduce cost * Converging consumer needs in many markets Interbrew is the fourth biggest brewer in the world, competing with Anheuser-Busch ( USA) , Heineken ( Netherlands), Carlsberg (Denmark) and Foster’s ( Australia).
The details of major competitors are as follows, a) Delfina was considered high-end & had 9.58% market share b) Galaxy Chain had medium-end products, was poorly located & marginally profitable. It had market share of 10.7% c) TopVal offered everyday low pricing & had market share of 10.23% d) Whole foods markets: Relatively new but fast growing entrant in already crowded upper-end market with market share of 1.2% e) Dollar stores with less than 1% market share. But they were expanding rapidly & targeting price- sensitive market. Apart from encroachments by competitors in the retails stores, there have been few changes in the customer preference in last five years
As human beings we always want more and more. There is no limit to how much we want and business executives have realized this. They want that greed that they helped develop within us to come out and buy all of their products, sustaining that it’s good for our economy, but it is good for our health? There is no benefit in consuming more products to stabilize our economy and allow business owners to gain more wealth, if the consumer is also gaining vast health risks with the purchase of these products. Over the last couple of years, the United States has, not only, become the most obese country in the world, but also has a large increase in health problems such as heart attacks, diabetes, high blood pressure, and strokes.