Fashion Channel Case

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Dana Wheeler, Senior Vice President of marketing for the Fashion Channel is reviewing a new marketing segmentation and positioning strategy. The Fashion Channel Company needs to strengthen its competitive position and is willing to spend an estimated $60 Million on advertising, promotion, and public relations in 2007. TFC’s main focus has been solely on fashion which is broadcast all hours of the day 7 days a week. This channel reaches close to 80 million viewers in US households with their main demographic being women between 35 and 54 years of age. By 2006 after 10 years on the air TFC feared that a change needed to be made with the growing number of competing networks. To face this challenge TFC’s plan was to drop the unit price of advertising by 10% in 2007 to counter act the decline in the channels performance. Lifetime and CNN have been targeting fashion-specific programs with much success in the recent years increasing the competition. Without lowering the price success would entail targeting the right viewers and offering the advertising companies a range of prospective viewers out of the 110 million households with televisions with subscriptions to cable 1,100,000 people on average were watching their TV at any point in time. Every half an hour there was 6 minutes of ad time totaling an estimated $20 billion in 2006 in buying spots on cable networks. By increasing the number of highly valued viewers this network could successfully grow in the revenues made from advertising. However, by increasing the number of highly valued viewers this network could successfully grow in the revenues made from advertising and not have to drop the price. TFC was a basic channel and able to reach most cable customers automatically as they signed up for cable. This was another source of revenue that averaged $1 per cable subscriber a year with an estimate totaling $80 million in revenues. With a target going in to the next year, Wheeler knew she must increase viewership and advertising prices by increasing the number of highly valued customers to attract the premium advertising companies. 1.) In this article, The Fashion Channel (TFC) is trying to find a way to increase the popularity of their channel, compete with other emerging networks that are encroaching on fashion-specific shows and create a positioning strategy that brings in a desirable demographic. Originally TFC had a “Fashion for Everyone” philosophy; however, now faced with competition from other networks they must find a way to secure their position as a leader in Fashion television. In marketing, there are many environmental forces that can affect a company’s performance and their marketing abilities. These issues range from economic, societal, competitive and even political. In this particular article TFC is facing societal and competitive environmental forces that they must deal with accordingly. Societal issues create a need to cater to societies demands and provide what the target market is asking for. Advertisers are most interested in key demographics and are willing to pay top dollar to reach them. In this case, the premium demographic is women aged 18 to 34. TFC demographic survey shows that the most avid viewers of their programming are women between 35 to 54 years. All firms are competing for the same consumer and advertiser dollars. Competition is coming from other networks that are offering programs similar to TFC. Both Lifetime and CNN are offering up fashion-focused shows in the evening hours, so TFC does have an advantage for advertisers who want to associate with the network’s content. However, both CNN and Lifetime rate higher on awareness and consumer interest in viewing. TFC marketing segmentation needs to improve consumer’s interest in their programming. In order to pull more advertising dollars TFC has to increase ratings (viewers) and bring in a more desirable demographic. Not only will this bring more advertisers but it will also increase...
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