...Case Activity: The Fashion Channel 1) What does Wheeler imply by “Deliver quality audiences, as demanded by advertisers” (p. 5)? Why is this important to TFC? ‘Deliver quality audiences, as demanded by advertisers’ means increasing viewership (rating). Moreover, increasing the audience quality, attracting more audiences who have the ability and possibility to buy the product advertised in TFC. From the Exhibit 5 we can see, FTC sales revenue comes from two sources, ad sales and affiliate fees. The more audience subscribe their channel the more viewership, the more probability they buy the product advertised on TV. If the TFC can reach the tight audience, they can get more advertisers, therefore, increase the advertising revenue. There are usually 6 minutes in every 30 minutes program, the time of the advertisement can be regarded as fixed, if the TFC raise the advertising price, the more revenue that can get. However the competition for ad revenue are always fierce as there are a numbers of networks, TFC cannot increase the advertising price by no reasons unless the audiences have the ability and possibility to buy the product. If the FTC’s audiences are likely to buy the advertising product in the future, the TFC could negotiate with the advertisers, and raise the fee somehow. TFC’s Ad Sales team usually sell the advertising spots to a variety of well-know cosmetics companies, clothing designers and automobile manufacturing, the quality audience then will be the...
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...Case Analysis Of “The Fashion Channel” Introduction and Problem Definition The Fashion Channel case illustrates the development of market segmentation options in implementing marketing strategies in a changing competitive environment, and demonstrates how quantitative analysis may be used to support a strategic marketing decision. The Fashion Channel (TFC) was a widely available niche cable network which only offers fashion-oriented programming. It was very successful until other regular networks began to copy its concept and take market share of it, which as a result, had a severe negative effect on TFC’s advertising revenue and affiliate fees. The problem is how to develop the segmentation and positioning, change the current content of programming, and reach the target customers, so as to get back those market shares from competitors, create more revenues and maintain TFC’s early standing. Situation analysis λ External Analysis: There were several hundred competitors in this industry and they took note of TFC’s concepts. TFC faced double-edged competition rendering it have to focus on not only ratings and demographics but also program subjects. Moreover, surveys showed that TFC had the lowest indexes, which actually made its affiliate fee at the low end as well. At the same time, the target consumers of competitors were premium CPM (cost per thousand)’s groups, while TFC only appealed to the less valued group. Ad industry was booming and competition was fierce...
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...data presented, The Fashion Channel (TFC) was the first TV channel to offer fashion TV shows, reaching 80 million viewers in the USA, initially giving the company an advantage as the original leader in the market. However, now the company is facing tough competition: “Fashion Today” on Lifetime and “Fashion Tonight” on CNN. At the moment this new competition arose, TFC did not have any plan for strategic segmentation or market positioning. The demographic data shows that 61% of the total audience for The Fashion Channel is comprised of women between 35-54 years old, similar to CNN’s audience. However, the Lifetime audience is 63% women between 18-34 years old; that means that TFC has older viewers than Lifetime. Another interesting figure is that CNN has the greater number of men with 45%, mostly between 35-40 years old. Given these figures, it’s clear that Dana Wheeler is focusing on attracting a younger segment of women to TFC, competing directly with Lifetime. She is not interested in reaching the male segment. TFC dedicates more broadcast time to fashion programming than any other network. However, TFC’s fashion programs rank lower in the ratings than its competitors’ shows. That negatively affects TFC because lower-rated shows are less attractive to advertisers, resulting in lower income from commercials. According to a study conducted by GFE Associates, people who are interested in fashion can be divided into four segments: Fashionistas (serious fashion followers), who represent...
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...Case 6 - The Fashion Channel 1. ISSUES Founded in 1996, TFC has been the only channel that is dedicated to fashion features 24 hours a day 7 days a week to a broad range of audience. This gave the channel a competitive edge marking it as the fashion leader channel in the market. However beginning 2006, the company noticed that other channel namely Lifetime and CNN were including fashion programs in their network and thus attracting audiences and advertisers. Advertisers had more choices to advertise through now and since these competitors were targeting the younger and stronger groups of audiences, this was affecting the commercial sales of TFC. The company is losing more advertisements to its competitors and it is estimated that TFC would need to drop its ad price by 10% if its performance doesn’t change. The current marketing theme of TFC is “Fashion for everyone” which means they are offering to broad range of viewers to get more viewership but the current market situation interprets that advertisers are interested in going to networks that target the strong segment of the market-Youth. Dana also found that TFC ranks lower in viewership ratings as compared to its competitor because of targeting broad audience and older females. Since ad rates are based on the number and demographics of the target market, lower viewership rate of TFC was resulting in lower income from commercials. Currently 61% of the total audience for TFC is women between 35-54 years old, similar...
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...Case study Analysis: The Fashion Channel Introduction: “The Fashion Channel” which is a successful cable TV network and which had been started by two entrepreneurs in 1996, with up to date and entertainment features and information broadcast 24×7 which was related to fashion only. The channel was actually dedicated to fashion only and its main audience were women of 35-54 age group. Earlier TFC’s tagline was “Fashion for Everyone” In 2006 TFC has earned the revenue of $310.6 Mn out of which their target was to earn a profit of $230 Mn only through advertisement. Till 2006 TFC was the market leader in fashion related programs and one of its more popular series in 2005 had been “Look Great on Saturday Night for Under $100. In 2006 TFC has realized that some of the other channels like CNN and Lifetime are following the footsteps of TFC and also they are telecasting the programs related to the fashion world, which were now started to become more popular in comparison to the programs of TFC. These channels were giving competition to the TFC directly by taking the share of its ad revenue; these channels were giving a double edged competition to TFC. Norm Frazier, senior vice president of advertising sale, advised that in order to increase the TFC’s ad revenues either TFC has to decrease its ad pricing by 10% or to increase its viewership by improving the quality n contents of the programs. There were around 110 Mn households in USA with cable network and TFC’s average rating...
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...Fashion Channel Questions Please answer the following questions in no more than 3 pages single spaced or 6 pages double spaced using a 12pt font. Exhibits such as your excel results do not count against the page limit. Please note that the column “2007 base” in the excel spread sheet assumes you do not segment the market. It is critically important that you communicate your reasoning clearly. You MUST NOT talk about the case in depth with anyone else. 1. How would you interpret the consumer and market data if you were Dana Wheeler? Develop a factual analysis of the segmentation options, and evaluate the pros and cons of each. (1) With the total 110 million TV householders with televisions in the United States, the channel reached nearly 80 million householders that subscribed to cable and satellite television, and women between 35 and 54 years were its most avid viewers. However, these are only general data. For The Fashion Channel, the average viewers are 1.1 million which is much less than 3.3 million of Lifetime and 4.4 million of CNN, two main and strong competitors. Because raise cable affiliate fee will bring wicked effects on consumer satisfaction, the only two key levers to increase revenue would be increase viewership and increase advertising pricing. In addition, the common junction of these two is “deliver quality audiences”, who is willing to become loyal to TFC and also in highly valued to advertisers. According to the GFE Association report which constructed...
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...Fashion Channel: new SEGMENTATION & POSITIONING strategy Which scenario should be chosen? Why? Players Dana Wheeler – vice president of marketing department CEO Jared Thomas Norm Frazier – vise president of advertising sales Company | How they make money | Concept “FASHION for EVERYONE”TV network dedicated solely to fashion with up-to-date and entertainment features;Information broadcast 24 hours per day, 7 days per weekFounded in 1996Forecast revenue for 2006 - $ 310.6 mil;Reached 80 mil households Women b/w 35-54“Look great on Saturday night for under $100” – most viewable series in 2005 | Revenue streams from advertising sales Revenue streams from cable-affiliate fees | Place | Product | Price | Promotion | Chicago office Traditional and internet advertising Public relationspromotions | TV network dedicated solely to fashion | Subscriber fee is $1 per year | Cable & satellite TV | Customer Needs | Company Skills | Competition | Collaboration | Context | | Readiness to spend $60 mil in all advertising, promotion and public relations;Growth without segmentation, positioning and branding strategy | Lifetime taking away a lot of ad buys because they are attracting younger female demographics M-F 9-11 pm CNN delivers some great numbers of men M-F 8-9 pm, Sat-Sun 10-11 pmOutdo TFC in ratings on consumer interest | | Dependence on MSO since they withdraw unpopular channels | Strengths | Weaknesses | Extensive niche market; Ability to realize threats...
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...Question #2 What would you recommend to The Fashion Channel? The Fashion Channel has enjoyed great success with programming targeting everyone from the Fashionista who lives for high fashion, to the busy mom in search of the best deals with which to dress her family, to the bachelor who just needs something to wear. However, competition from other networks including CNN and Lifetime dictates that The Fashion Channel consider segmenting their viewers and determine which markets would be both the most profitable and allow them to gain a competitive advantage. According to our text, market segmentation not only assists companies in effectively serving their customers in a way that is beneficial to both parties, but also assists in indentifying market segments that should not be pursued. As indicated in the data, the broad market segment that The Fashion Channel has employed since the network started is no longer feasible because advertisers are being lured to other channels whose viewership provides the most benefit for their advertising dollars. If TFC does not make a move, their profit margin could potentially drop to 19% in 2007. For the Fashion Channel, male viewers, the “Situationalists,” and the “Basics” do not provide enough benefits to the network (or advertisers for that matter) to include them in their market segmentation strategy moving forward. Therefore, our recommendation is for The Fashion Channel to implement scenario three, which targets the Fashionista’s...
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...THE FASHION CHANNEL CASE STUDY: In reference to the case study, Dana Wheeler can invest in one of the following 3 scenarios to generate better output for ‘The Fashion Channel’ (TFC): Scenario1: Broad appeal to a cross segment of Fashionistas, Planner & Shoppers and Situationalists Advantages: Investing in marketing and advertisement campaign for new target segment, will lead to increase in the rating from 1.0 to 1.2 and also increase in average viewers. Disadvantages: Since there is no real change in viewers’ type and programming, the CPM will drop by 10% or more and competitors will continue taking its market share. Scenario2: Focus on Fashionistas segment Advantages: This segment has the highest interest in fashion and is strong in the highly valued 18-34 female demographic, which will lead to increase in CPM. Disadvantages: Fashionistas is the smallest segment in four clusters .Require spending of additional $15million per year on programming to attract and retain interest of this segment. Scenario3: Focus on both Fashionistas plus Shoppers & Planners clusters Advantages: Dual-targeting will ensure the average viewers and rating. It is expected that rating will grow to 1.2 with a potential CPM of $2.50 Disadvantages: Require spending of additional $20million to ensure there were selections aimed at both segments. Recommendations: Observing the advantages and disadvantages of the three options, Scenario 3 looks to be the most appropriate...
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...2075 JUNE 1, 2007 WENDY STAHL The Fashion Channel Introduction Dana Wheeler, senior vice president of marketing for The Fashion Channel (TFC), sat in her Chicago office and scrolled through the email messages in her inbox. Thankfully, none required an urgent reply. She toggled over to her calendar: no meetings for the rest of the day. Finally, she could focus her thoughts on reviewing her recommendations for TFC’s new segmentation and positioning strategy. Wheeler believed that she had prepared a solid analysis; she felt confident about the strategy she was proposing. But next week’s senior management meeting would mark her first big presentation to the company’s leaders since she had joined TFC, and, she admitted to herself, she was eager to gain the support of her colleagues. There was a lot riding on the outcome of this meeting, both for Wheeler and for the channel. If founder and CEO Jared Thomas and his team liked what they heard, Wheeler would move forward to implement her recommendations. The company needed to strengthen its competitive position and would be spending more than $60 million in all national and affiliate advertising, promotion, and public relations in 2007, based on these recommendations. This would be an increase of $15 million over 2006 spending. Background TFC was a successful cable TV network– and the only network dedicated solely to fashion, with up-to-date and entertaining features and information broadcast 24 hours per day, 7 days per week...
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...WENDY STAHL The Fashion Channel Introduction Dana Wheeler, senior vice president of marketing for The Fashion Channel (TFC), sat in her Chicago office and scrolled through the email messages in her inbox. Thankfully, none required an urgent reply. She toggled over to her calendar: no meetings for the rest of the day. Finally, she could focus her thoughts on reviewing her recommendations for TFC’s new segmentation and positioning strategy. Wheeler believed that she had prepared a solid analysis; she felt confident about the strategy she was proposing. But next week’s senior management meeting would mark her first big presentation to the company’s leaders since she had joined TFC, and, she admitted to herself, she was eager to gain the support of her colleagues. There was a lot riding on the outcome of this meeting, both for Wheeler and for the channel. If founder and CEO Jared Thomas and his team liked what they heard, Wheeler would move forward to implement her recommendations. The company needed to strengthen its competitive position and would be spending more than $60 million in all national and affiliate advertising, promotion, and public relations in 2007, based on these recommendations. This would be an increase of $15 million over 2006 spending. Do No Background TFC was a successful cable TV network– and the only network dedicated solely to fashion, with up-to-date and entertaining features and information broadcast 24 hours per day, 7 days per week. Founded...
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...Case Description The Fashion Channel (TFC) was a widely available cable niche network, reaching 80 million U.S. households. It offers only fashion-oriented programming 24 hours per day, 7 days per week. TFC didn’t have any detailed segmentation and positioning strategy. It attempted to appeal to as broad a group as possible in order to have the highest ratings. It was very successful until other regular network, such as CNN and Lifetime began to emulate its concept and take market share of it. This affected negatively TFC’s advertising revenue and affiliate fees, so the network started to rethink its approach to marketing. In this case, the problem is how to develop the segmentation and positioning and change the current content of programming, so as to get back those market shares from competitors, create more revenues and maintain its leader status. How would you interpret the consumer and market data if you where Dana Wheeler? TFC channel, initially, was a market leader, since it had no significant competition in terms of the fashion- specific content it offered. As a matter of fact, the channel was one of the most widely available niche networks, reaching a penetration in the market (market size) of almost 80 million US households. Its profit growth was above the industry average and its distribution system was through cable and satellite television, where the TFC was positioned as a basic channel, so most consumers received it automatically when they signed up for basic...
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...Market Segmentation & Strategy: Broad-based marketing: The segment includes Fashionatas, Planners & Shoppers, and Situationalists, which primarily include women, 18 – 34 years old, who are moderately to highly engaged in fashion. Compared to 2007, the broad-based marketing segmentation generates $40 million more net income from $ 54.6 million to a staggering $94.9 million. Unlike the other 2 segments it doesn't require incremental investment in programming expense which will cost the other two segments at least 15 million dollars to implement. Since the most profitable segment (18-34 aged women) will be present in all the above mentioned segments, TFC's marketing initiatives would cater to 100% of the population of the said category. But the primary problem in Broad-based segmentation is the CPM is still lower than the current CPM. Ad-sales was forecasting a 10% drop in CPM to $1.80$ if the current audience mix stays the same. Also, because The fashion Channel would not target a specific audience under this scenario, TFC would run the risk that their competitors would penetrate the premium segments and further erode TFC's pricing ability. "Fashionista" Segmentation: The segment shows the highest interest in fashion and has got a majority of the 18-34 female demography, which will undoubtedly deliver a CPM boost. Compared to the 2007 base numbers the "fashionista" segment produces $100 mn more in terms of net income. It will lead to improved tv ratings of 0.8....
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...Harvard case 3 The Fashion Channel Tim Cornish 21337523 Harvard case 3 The Fashion Channel Tim Cornish 21337523 The University of Western Australia MKTG5561 The University of Western Australia MKTG5561 Harvard Case 3 The Fashion Channel It is clear Dana Wheeler must take action otherwise The Fashion Channel (TFC) risks losing a large portion of the market share to competitors. The two main competitors being Lifetime and CNN. Currently TFC is mass marketing, which in the past has been fine, however, the rise in competitors has changed the dynamics of the market for TFC. Dana Wheeler must choose between three scenarios to help TFC move forward and establish itself as a big competitor in the market. Scenario 1 Involves focusing on all women ages 18-35. Would be required to serve ‘Fashionistas’, ‘Planners & Shoppers’ and ‘Situationalists’. Pros – By Targeting women aged 18-35, TFC are serving a highly valued customer audience and it is reaching a larger audience. TFC would receive a ratings boost of 20 percent from 1.0 to 1.2. This is important because without maintaining the current audience ratings it could risk losing its distribution support. Cons – Ad sales drop by 10 per cent of CPM (cost per thousand) to $1.80. This will decrease TFC’s total ad revenue per year. By focusing only on women aged 18-35, Wheeler is taking a very broad marketing segment approach because this demographic fits into all segments. If she was to choose this scenario...
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...1. How would you interpret the consumer and market data if you were Dana Wheeler? Dana Wheeler, the senior vice president for the Fashion Channel (TFC), faces the marketing challenges. She was chosen to develop the new strategy and identify customer needs that TFC wants to target. TFC is a very stable company in growth and revenue; it focuses specifically on fashion and has a few competitors such as CNN and Lifetime, which are threatening the market share. 2. What is the expected outcome of each of the targeting scenarios? (Complete both the Ad Revenue and financial calculators to fully understand the financial impact of the scenarios). The Ad Revenue Calculator shows that the third scenario has the highest revenue per year. The difference in price is 20 million between second and third scenarios and with the first scenario about 100 million. However, we can see that the third scenario, as well as the highest revenue, has the highest total expense. The difference in net income between the third and first scenarios is nearly 25 million. 3. Develop a factual analysis of the segmentation options, and evaluate the pros and cons of each. There are three potential scenarios: broad multi-segment approach, focused approach and two-segment approach. Scenario 1 manages a broad segment between the Fashionistas, Planners & Shoppers, and Situationalists. This scenario has reduced risk and lowest total expense. However, it also has...
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