To: Professor Montgomery
From: Laura Graham
Re: The Fashion Channel
The Fashion Channel (TFC), is a successful fashion network that wants to strengthen its competitive position and increase revenue. Recently, competing networks have stolen key viewers; however, marketing initiatives can attract viewers and advertisers.
TFC wishes to strengthen its competitive position and generate more advertisement revenue. It has the advantage of being the only channel dedicated solely to fashion. While competition for viewers between cable channels is fierce, TFC has the opportunity to seize the key 18-34 female demographic.
The company’s strengths stem from its identity as a broadly accessible niche network. TFC sells approximately 2,000 minutes of advertisements a week to cosmetics companies, brand name clothing designers, and car manufacturers. As a basic channel, most consumers automatically receive it with their cable package. On the other hand, the company is facing pressure from other channels whose fashion segments are gaining popularity. To gain wider viewership and higher ad revenue, TFC must use marketing to lay a foundation for future growth.
External market conditions seem reasonably stable for business at this time (2006-2007). Consumer prices are expected to rise by about 4% in 2007, which is above 2006’s 2.5% price increase. Inflation remained fairly constant at 2.8%, and real GDP growth is expected to stay near 4.8% (Exhibit 1). GDP per capita is expected to rise, albeit only slightly.
Regarding customers, TFC’s main strength is its ability to attract women between ages 35-54. The network’s main weakness lies in attracting men. A large threat to the company involves cable affiliates, who pay TFC a subscriber fee that...