The Fashion Channel Case Analysis

Marketing Analysis

1. Provide a brief summary of the situation at The Fashion Channel (TFC) including the reason TFC hired Dana Wheeler. (5 pts)

The Fashion Channel, a newly successful cable news network, is widely popular and gained large profit since its creation in 1996. Its huge success its due to its 24-hour, 7 days a week broadcast of specifically fashion related content and ads. Other cable networks like CNN caught on to the huge potential and appeal to this fashion sensation, and have given TFC significant competition and TFC is looking to drastically change its marketing strategy through segmenting and positioning. They hired Dana Wheeler, who has a strong background in marketing and advertising, and could help change the company’s

A new segment must be targeted in order to increase growth and profit. Currently, the most amount of viewers for TFC come from women aged 35-54 years old and women aged 18-34 do not view the channel as much, and should be focused on more. Advertising and cable fees are the primary source of Revenue for the channel, pulling in 230.6 million dollars and 80 million dollars respectively. Considering advertisement is the primary source of revenue, TFC needs to revamp their efforts and change segmentation in order to continue steady growth against competition that has taken note of their successes and taken viewers away due to increased fashion advertising and exposure. The data shows that advertisements are based on ratings, therefore ratings must increase from the 18-34 year old demographic. This means that advertisement charges on advertisements targeting this age range must increase. Furthermore, there are three potential segmentation plans and four different groups of viewers :Fashionistas, planners and shoppers, situationalists, and basics. With all the data, the segmentation plans must be carefully analyzed but uncertainty does follow each plan because it is not highly predictable to relate these plans to actual

Mostly, women who are 18-34 per segment are targeted and the projected ratings boost would be 20% with an increase in viewership. The CPM or cost per thousand would decrease to $1.80 and viewership would be wider but the cons of all of this would be the danger of competition from channels such as CNN. Scenario 2 is segmented towards aged 18-34 fashionistas only and would continue the popularity of this age range with the channel. This would most surely result in a loss of viewers and rating, but the CPM would be $3.50. Scenario 3 is segmented towards both fashionistas and shopper and planners. It would increase ratings to 1.2 but $20 million would need to be spent on