The Fashion Channel Case

Topics: Income statement, Revenue, Income Pages: 3 (506 words) Published: April 8, 2014
The Fashion Channel is losing highly valued viewers to competitors, causing a projected decrease in advertising revenue. TFC needs a plan to improve its ratings and increase its advertising revenue. We recommend that TFC implement scenario three and target the Fashionistas and Shoppers/Planners. As we will show, this dual targeting plan has the highest income potential by bringing in the younger, highly valued viewers needed to increase advertising revenue. Analysis

We recommend the third scenario of targeting both the Fashionistas and the Shoppers/Planners because it offers the highest ad revenue potential (see Appendix 1). Even though this plan has the highest total expenses, it results in the highest net income and margin potential (see Appendix 1). If TFC implemented scenario two and targeted only the Fashionistas, the CPM would go up drastically. However, Fashionistas only represent 15% of households and the average number of viewers would go down (see Appendix 2). On the other hand, if TFC targets both Fashionistas and Shoppers/Planners the CPM and the average number of viewers will increase, resulting in higher revenues (see Apendix 2). The first scenario is not a good option because it increases advertising revenues only a small amount. Implementation

The implementation plan involves 3 major steps. The first step is to research the two segments and find out what kind of programming will attract and retain both segments. The second step would be to invest in the new programming. The third step is to begin an advertising, promotions, and public relations campaign targeting the two segments. Risks

The implementation of this plan has some risks that need to be mitigated. The three major risks are: 1) the plan only attracts Fashionistas 2) the plan only attracts Shoppers/Planners 3) the plan alienates TFCs current customers. If the plan only attracts the Fashionistas, then revenue will not be as high as expected, as shown in Appendix 1...
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