Case 2 analysis
The Fashion Cannel
1. What are the pros and cons of the three segmentation scenarios?
Read carefully the case and make a list of the pros and cons of each segmentation scenario. Use the following table to summarize your findings.
Scenario 1: Broad-based Segmentation Targeting
Scenario 2: Fashionista focus
Scenario 3: Fashionistas + Planners/Shoppers
Pros
Already have male audience interest, 55% male
Segment is strong with 18-34 year old females
Smaller than other segments-15% of households
Strengthen value of audience which will increase CPM
Dual targeting with possible ratings over time to 1.2 with potential CPM to 2.50
It will target a larger segment, 15% for fashionistas and 35% for planners and shoppers
Attitude drivers are very positive for increase in ad sales and viewers
Cons
The segment is already disengaged and small
Ad sales had expected drop of 10% CPM and there is not enough to change that fate
Competition may further affect pricing
Targeting may lead to drop in viewers
Invest in new programming which is estimated at 15 million
Invest in additional 20 million for programming to ensure advertising is good for both segment
2. Estimate the impact of each segmentation strategy on the company’s revenue. You will have to estimate the financials of the company using the excel file. Consider the following scenarios:
2007 Base: No segmentation; drop in ad unit pricing (average CPM).
Scenario 1: Multi segments, targeting 3 groups (excluding Basics); increase in ratings, decrease in ad unit pricing (average CPM).
Scenario 2: One segment, Fashionista: drop in ratings, increase in ad unit pricing (average CPM).
Scenario 3: Two segments, Fashionista and Shopper/Planner; increase in ratings and increase in ad unit pricing (average CPM).
1. What are the pros and cons of the three segmentation scenarios?
Read carefully the case and make a list of the pros and cons of each segmentation scenario. Use the following table to summarize your findings.
Scenario 1: Broad-based Segmentation Targeting
Scenario 2: Fashionista focus
Scenario 3: Fashionistas + Planners/Shoppers
Pros
Already have male audience interest, 55% male
Segment is strong with 18-34 year old females
Smaller than other segments-15% of households
Strengthen value of audience which will increase CPM
Dual targeting with possible ratings over time to 1.2 with potential CPM to 2.50
It will target a larger segment, 15% for fashionistas and 35% for planners and shoppers
Attitude drivers are very positive for increase in ad sales and viewers
Cons
The segment is already disengaged and small
Ad sales had expected drop of 10% CPM and there is not enough to change that fate
Competition may further affect pricing
Targeting may lead to drop in viewers
Invest in new programming which is estimated at 15 million
Invest in additional 20 million for programming to ensure advertising is good for both segment
2. Estimate the impact of each segmentation strategy on the company’s revenue. You will have to estimate the financials of the company using the excel file. Consider the following scenarios:
2007 Base: No segmentation; drop in ad unit pricing (average CPM).
Scenario 1: Multi segments, targeting 3 groups (excluding Basics); increase in ratings, decrease in ad unit pricing (average CPM).
Scenario 2: One segment, Fashionista: drop in ratings, increase in ad unit pricing (average CPM).
Scenario 3: Two segments, Fashionista and Shopper/Planner; increase in ratings and increase in ad unit pricing (average CPM).