Mountain Man Brewing

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1. Decision to introduce Light Beer ------------------------------------------------- We first consider the potential benefits and risks of introducing the Mountain Man (MM) Light before coming to the decision that we should introduce the MM light beer. ------------------------------------------------- 1.1 Potential Benefits ------------------------------------------------- MMBC currently rely on a core product, its Mountain Man Lager, catering to an aging market of blue-collar workers. Despite their high loyalty, their population is shrinking where customer equity is at stake. Meanwhile, light beer is generally more preferred among younger drinkers, and it is “the only beer category demonstrating consistent growth”. According to the BCG matrix, MM Lager is the company’s cash cow, but with its steady decline in sales, it will soon become a dog, even if the company invests more in marketing to boost sales. MM Light is a question mark, and with sound marketing strategies that may cost the same amount, introducing MM Light would ensure sales and growth. ------------------------------------------------- 1.2 Potential Risks ------------------------------------------------- Risks that this decision may induce: The new product may hurt the long-standing brand equity of MM Lager; Existing customers may be alienated, and new customers will not be as loyal; Costs will increase; other brands that have more resources for advertising cannot be competed against. As a result, we decided to introduce the MM light beer to a new market segment and reposition the brand for MM light so as to reduce the damage it may cause to the brand equity of MM Lager and differentiate MM light from its competitors. We will still be retaining the MM Lager in the existing market, but adopt the diversification strategy to introduce MM Light to a new market.

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