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The Fashion Channel Case

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The Fashion Channel After reviewing firm and market data pertinent to the Fashion Channel, Dana Wheeler compiled four distinct market segments that the channel appealed to. These were fashionistas 15%, planners + shoppers 35%, situationalists 30%, and basics 20%. These are also listed in decreasing order of involvement in fashion. Currently the marketing strategy of TFC involved almost no segmentation and used the original plan that brought TFC much success by appealing to the largest and most broad viewer base possible. Due to increasing competition from non-dedicated fashion networks i.e. (CNN, Lifetime) it was decided a new marketing strategy must be implemented in order to remain the leader in fashion programming both by ratings and advertising revenue. Wheeler designed three scenarios using three different market segmentations approaches. First Wheeler discounted trying to gain any further penetration into the male market. Males were mostly in the basics category and had little interest in fashion at all. The first strategy would be a multi-segment approach that targeted fashionistas, planners + shoppers, and situationalists. This was projected to increase ratings to 1.2% and overall viewers to 1,320k. However this approach would also decrease CPM from ads to $1.80. This approach would also no require any additional programming costs because of its multi-segment strategy. This strategy is projected to decrease the profit margin from 30% to 29%. The second scenario is the more targeted approach that focuses on the smallest, but highest involved in fashion segment, the fashionistas. Fashionistas account for only 15% of total viewers so a ratings decrease to 0.8% However this segment is also provides the highest value to advertisers and could increase CPM to $3.50. This would also require additional programming of $15 mil to satisfy the

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