Star brands eventually become Cash Cows in the future when market growth slows. If Bourbon Brothers does not reposition itself into the new Star markets, then they will lack the profitable Cash Cow brands in the future. Bourbon Brothers should set a new market strategy that would produce new Star brands. By doing this, Bourbon Brothers will improve their short and long-term profitability.
There are various alternatives that Bourbon Brothers can implement in order to achieve their goals. In order for the new market strategy to work, Bourbon Brothers must analyze each brand individually and not across the board. Missouri Oaks Bourbon has been one of the main stays for the Bourbon Brothers. It helped Bourbon Brothers achieve the success they've had. However, in recent years sales in the U.S. of bourbon have tailed off (Table 2). Although Missouri Oaks enjoyed a 27% market share and 12% of Bourbon Brothers" total sales, it only accounted for 8% of total profits (Table 3 & 4). Of Missouri Oaks total sales, 54% of its revenues were spent on advertising. Bourbon Brothers has the options of reducing advertising costs and use all profits to help fund other brands, spend more money on advertising and try to increase market share even further, or leave the brand alone and do nothing.
Bicycle Brand Bourbon was introduced to give a more affordable bourbon to the consumer. Bicycle Brand also faces the same declining market that Missouri Oaks faces. This Cash Cow enjoys a 16% market share, but only accounts for 7% of total sales and 5% of total profits (Table 3 & 4). 54% of Bicycle Brands revenues were also spent on advertising. The Bicycle Brand has the same options as the Missouri Oaks. Bourbon Brothers can either, reduce advertising costs and transfer profits to other areas, increase advertising and gain more market share, or maintain Bicycle Brands current funding.
Old Carnaby Gin, another Cash Cow, has been one of the Bourbon Brothers products since 1949.
