Fashion Channel
MM1
CASE STUDY SUMMARY
THE FASHION CHANNEL-Introduction
1. The Fashion Channel (TFC) is a cable TV network
2. It was founded in the year 1996.
3. Jared Thomas is the CEO.
4. Experienced constant revenue and profit growth above the industry average.
5. Almost 80mn U.S. households subscribed to cable and satellite TV.
6. In the beginning of 2006, the company started facing stiff competition from other networks.
7. In July 2006, Dana Wheeler was appointed as VP of TFC.
PROBLEMS:
TFC was facing competition from other networks since 2006 so Dana Wheeler was appointed as its Senior VP of marketing to handle these issues.
She made some recommendations in the board meeting regarding new marketing strategy and segmentation.
Dana thought there are two key levers to drive revenue:
1. Increased TRP(ratings)
2. Increased advertising pricing
SOLUTIONS:
A report has been prepared for understanding consumers’ attitudes and needs.
There are 4 unique groups of viewers:
BASIC
FASHIONISTAS
PLANNERS and SHOPPERS
SITUATIONALISTS
Understanding the patterns these clusters follow, Dana has recommended 3 major segments. SEGMENTATION: PROS AND CONS: -
Fashionistas Segmentation:
Compared to the 2007 base numbers, the fashionistas segmentation scenario produces almost $100 million more in terms of net income ($151.4 million vs. $54.6 million).
TFC’s average CPM would increase from $2.00 to $3.50.
This scenario requires a $15mn incremental programming expense to cover the new programming.
Targeting the fashionistas segment will help TFC compete against its major competitor Lifetime and also would strengthen the value of the audience to advertisers because 50% of fashionistas are females between the age of 18 and 34.
The fashionistas segmentation scenario results in a 0.2% decrease in TV ratings for TFC.
The fashionistas segment may be too specific, limiting the number of viewers to a small size .Hence the programming might not attract new consumers.
Broad
CASE STUDY SUMMARY
THE FASHION CHANNEL-Introduction
1. The Fashion Channel (TFC) is a cable TV network
2. It was founded in the year 1996.
3. Jared Thomas is the CEO.
4. Experienced constant revenue and profit growth above the industry average.
5. Almost 80mn U.S. households subscribed to cable and satellite TV.
6. In the beginning of 2006, the company started facing stiff competition from other networks.
7. In July 2006, Dana Wheeler was appointed as VP of TFC.
PROBLEMS:
TFC was facing competition from other networks since 2006 so Dana Wheeler was appointed as its Senior VP of marketing to handle these issues.
She made some recommendations in the board meeting regarding new marketing strategy and segmentation.
Dana thought there are two key levers to drive revenue:
1. Increased TRP(ratings)
2. Increased advertising pricing
SOLUTIONS:
A report has been prepared for understanding consumers’ attitudes and needs.
There are 4 unique groups of viewers:
BASIC
FASHIONISTAS
PLANNERS and SHOPPERS
SITUATIONALISTS
Understanding the patterns these clusters follow, Dana has recommended 3 major segments. SEGMENTATION: PROS AND CONS: -
Fashionistas Segmentation:
Compared to the 2007 base numbers, the fashionistas segmentation scenario produces almost $100 million more in terms of net income ($151.4 million vs. $54.6 million).
TFC’s average CPM would increase from $2.00 to $3.50.
This scenario requires a $15mn incremental programming expense to cover the new programming.
Targeting the fashionistas segment will help TFC compete against its major competitor Lifetime and also would strengthen the value of the audience to advertisers because 50% of fashionistas are females between the age of 18 and 34.
The fashionistas segmentation scenario results in a 0.2% decrease in TV ratings for TFC.
The fashionistas segment may be too specific, limiting the number of viewers to a small size .Hence the programming might not attract new consumers.
Broad