The Fashion Channel HBS Case Notes

Topics: Demographics, Cable television, Advertising Pages: 6 (1662 words) Published: February 25, 2014
Introduction
The protagonist of this case is Dana Wheeler who is the senior vice president of marketing for TFC She was looking into preparing a new Segmentation and Positioning Strategy If her boss liked what he heard then they would move forward with a 60 million dollar IMC campaign utilizing national advertising, promotion, and public relations. This was an increase of 15 million dollars from last year.

Background
TFC was a successful cable network that was the only one who broadcasted up-to-date news about fashion 24 hours a day, 7 days a week It was founded in 1996
It has had consistent and constant growth since the beginning, revenue was projected to grow to 310 million dollars in 2006 marking another steady year of growth. The channel was one of the most widely available niche networks reaching 80 million US households (this number represents the number of people who had TFC in their package not those watching it) Women between 34 and 54 years were its most avid viewer according to its annual demographic survey Beyond basic demographics the network had no other information on its viewers Nor did it attempt to market to any viewer segments in particular Early on the network had chosen a "something for everyone" type of strategy in its programming and advertising TFC has clearly grown quickly despite it lack of targeted marketing, however at the beginning of 2006 TFC had realized that other networks were taking note of its success Some of its biggest competitors became Lifetime and CNN who had added fashion programming to their lineup This is what prompted TFC's CEO to want to change up TFC marketing and be more strategic with their marketing, this is why they hired Dana who extensive experience with marketing packaged consumer goods as well as broad experience in advertising. TFC's CEO and other executives felt some urge to resist change and didn't want to "fix what wasn't broken" Wheeler's Plans

Frazier (senior vp of ad sales) had warned that TFC would need to drop the price of a unit of advertising by 10 % if changes weren't made in TFC's performance He mentioned that CNN and Lifetime's fashion shows were achieving notable ratings (EXHIBIT 1) Frazier was a great salesman and was justifiably worried about sales Wheeler knew that in order to hold or increase the price it would be crucial to attract a critical mass of viewers who were interested in the network's content and were attractive to advertisers The key would be targeting the right viewers and offering advertiser an attractive mix of viewers when compared to their competitors BUT if she changed the network's offering in a way that disappointed too many consumers it could risk losing its distribution support Her plan was to build a strategy for segmentation and use it as a base to employ all marketing tools at her disposal, traditional/internet ads, PR and promotions to reach targeted consumers Everyone felt that advertising was TFC primary growth opportunity. TFC's Advertising Revenue Model

TFC was on target to generate 230.6 million dollars in 2006 from advertising The advertising business model was built on attracting a mix of male and female viewers on a regular basis - think "something for everyone" strategy TFC's average rating was 1.0 with 110 million households or 1.1 million people people watching at any given time. The ad sales team sold access to viewers through 30 to 60 second spots to a variety of advertisers which included automobile manufacturers, clothes companies, and cosmetic companies There were usually 6 minutes of advertising per 30 minutes of programming (20 percent); 24 hours per day; for a total of 2016 minutes per week In 2006 industry data showed that advertisers spent 20 billion dollars on advertising in cable industry, however there were over a hundred networks competing for these dollars which made competition fierce. TFC was the only dedicated fashion network

If CNN and Lifetime are successful more channels may copy them...
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