The Fashion Channel Case

Introduction The Fashion furrow is losing highly treasured mantraps to competitors, causing a communicate decrease in advertising taxation. TFH needs a forge to improve its ratings and extend its advertising revenue. We barrack that TFH implement scenario three and tar get along the Fashions and Shoppers/Planners. As we will show, this forked targeting mean has the highest income potential by livery in the younger, highly valued viewers needed to increase advertising revenue. Analysis We exhort the trio scenario of targeting both the Fashions and theShoppers/Planners because it offers the highest ad revenue potential (see Appendix 1). veritable(a) though this course of study has the highest total expenses, it results in the highest net income and margin potential (see Appendix 1). If TFH implemented scenario dickens and targeted wholly the Fashions, the CPM would go up drastically. However, Fashions lone(prenominal) represent 15% of households and the average number of viewers would go grim (see Appendix 2). On the different hand, if TFH targets both Fashions and Shoppers/Planners the CPM and the average number of viewers will increase, disdainful in higher revenues (see Appendix 2).The number one scenario is not a dependable option because it increases advertising revenues scarcely a small amount. Implementation The carrying into action forge involves 3 major steps. The first step is to investigate the two segments and recoup out what mental of programming will retract and retain both segments. The present moment step would be to invest in the overbold programming. The third step is to begin an advertising, promotions, and public dealing campaign targeting the two segments. Risks The implementation of this plan has some risks that need to be mitigated.The three ajar risks ar 1) the plan only soak ups Fashions 2) the plan only attracts Shoppers/Planners 3) the plan alienates TFTP current customers. If the plan only attracts the Fashions, then revenue will not be as high as expected, as shown in Appendix 1 under scenario 2. However, the expenses would be much subvert and income would still be much higher than in 2006. If the plan only attracts the Shoppers/Planners, then CPM would go down causing advertising revenue to decrease (see Appendix 3). This rear be mitigated by management more on Fashions than Shoppers/Planners while still trying to attract both.The Fashion rut CaseStarting in 1996 TFH (the fashion channel) had a great success because of a big audition and no competitors in the business. Noticing the great success competitors such as CNN and life started to as well live fashion-based programmer. Since viewers now having a choice to decide which channel they want to watch the viewer numbers of TFH starter to decrease. A reason for this is shown by an alpha look into which pointed out that both CNN and lifetime got a better feedback in customers satisfaction in consumer interest as well as in aw areness and alike perceived value.Having their viewer numbers decreasing, TFH has to pay even more attention on their two main revenue streams cable affiliate fees and advertising Therefore they wanted to know who their hearing is to can better react to them. They reached this with help of a detailed demographic breakdown which leaded to the result, that 61% of their viewers are egg-producing(prenominal) and 33% creation old 18-34 which is less then 45% being aged 35-54, but the younger group is stronger in this business Additional to this they did a SFA associated survey which split up the audience into 4 groupsFactionists highly engaged in fashion with being 15% of all viewers, 61% being female and 50% being aged 18-34 Planners and Shoppers participants in fashion on a weak basis with being 35% of all viewers, 54% being female and 25% being aged 18-34 Sustainability participants in fashion for specific needs with being 30% of all viewers, 50% being female and 30% bei ng aged 18-34. Also they have 45% with children in the household Basics not interested in fashion with being 20% of all viewers and 45% being female. 2) Which research method was most helpful to you in developing and evaluating the class options?As menti angiotensin-converting enzymed before, there are foursome groups resulting from the SFA associated research. Combines with the results from the demographic breakdown we think it is really helpful for ETC. Indeed, with these researches they have the opportunity to realize who their audience is and so they can model on getting a new audience, probably within the another(prenominal) groups. They also understand who is the most strong group in their business so that they can work on reaching their needs and with these information it was possible to work out the segmentation options. 3) What are the segmentation options?Broad-based marketing The goal is to develop a multi-segment strategy with a strong focus on Factionists and the P lanners&shoppers and also have a focus on women aged between 18 and 34 since this is the most powerful group as mentioned before. Fashions segmentation In this segmentation the focus is strong only on Factionists. The plan is to spend $ 15 one million million million on programming. It is a single segment concentration. Factionists plus Planners & shoppers segmentation This one is a product specialized segmentation with focus on both Factionists and Shoppers & Planners.TFH has to spend $ 20 million on programming in this case. 4) What is the project financial impact of each of the option? Scenario number 3 has the best financial result a come uponst an increment of $20. 000. 000 in fixed costs and an increment of $4. 151. 347 in unsettled costs, the increment of revenue by Ad sales increases by $138. 378. 240 and the company can have the level best net income ($168. 867. 232) and also the maximum margin (39%). Scenario number 1, instead, is the worst one The Fashion Channel does nt have extra fixed cost but also their income are the lowest one ($249. 080. 832) that is $96. 864. 68 turn away than in scenario 3. In this case, the firm can match the same result that reached in 2006. Scenario 2 is a little worst than scenario 3 they have a little few fixed cost ($70. 000. 000) as they gain less revenue by Ad sales ($322. 882. 560) and also the net income and the margin are not performing as in scenario 3. 5) Compare the segmentation options. What are the Pros & Cons (Strengths & Weaknesses) of each option? 1 . Broad Appeal (Broad multi-segment approach) Scenario 1 Cross segment of Factionists, Planners & Shoppers, and Sustainability Woman aged 18 to 34 in all of the clusters 2.Factionists Scenario 2 Alternative to a broad, multi-segment approach focus on single segment (Factionists) 0 aggressive approach. Strong in the highly valued 18-34 female demographic. 3. The Factionists and the Shoppers/Planners Scenario 3 Dual targeting of two segments (Factionists and Shoppers/Planners). 6) What is your recommendation? After the analysis of costs, revenues and net income and the review of advantages and disadvantages of the three options, according to us the best solution is the scenario 3 the Fashions plus Planners/Shoppers segmentation.We understand that the risk involved with this scenario is very high. TFH will lose some of their most hard-core consumers by re-positioning the channel towards factionists and the planners/shoppers. Furthermore, Exhibit 5 show us that this scenario also requires more programming and in operation(p) expenses. On the other hand, Factionists has superior interest in fashion and Planners & Shoppers has the largest cluster size, so it is a good choice to combine them. Indeed Planners & Shoppers will improve he rating in order to attract more ad buyers and at the same time Factionists will enhance the CPM to gain more ad revenue.Moreover, from the Exhibits 4 and 5 we can observe that scenario 3 gives the more revenue that the others and it provides more net income and a better margin than the other two options. To conclude, the benefits truly do seem to outweigh the risks in this scenario and we recommend that targeting at two valued groups Factionists and Planners & shoppers is the best solution to this problem. It will create more revenues (above all from advertising), aka TFH get back market shares quickly and maintain Tiffs leading status and core viewer loyalty.Obviously, The Fashion Channel will also implement this new marketing plan. One of the more difficult challenges for TFH is trying to accompaniment their older loyal consumers while attracting the new factionists and planners/shoppers (18-34 female audience), otherwise they could certainly lose more than they gain. In order to achieve this aim, TFH should analyze the loyal consumers favorite programs and make sure to keep these programs when they begin their new marketing plan.Moreover, The Fashion Channel should look at Lif etime and their Fashion Today program to gain a better understanding of how they market to their 18-34 year-old female audience, so they will be in a very advantageous position to capture a large share of the market. Furthermore, TFH must continually find ways to improve consumer interest, awareness, and perceived value. Lastly, TFH must be aware of its competition and be ready to tell and re-position its programs in order to earn the best TV ratings and capture the most market share.The Fashion Channel CaseIntroduction The Fashion Channel is losing highly valued viewers to competitors, causing a projected decrease in advertising revenue. TFH needs a plan to improve its ratings and increase its advertising revenue. We recommend that TFH implement scenario three and target the Fashions 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 Fashions and theShoppers/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 TFH implemented scenario two and targeted only the Fashions, the CPM would go up drastically. However, Fashions only represent 15% of households and the average number of viewers would go down (see Appendix 2). On the other hand, if TFH targets both Fashions and Shoppers/Planners the CPM and the average number of viewers will increase, exulting in higher revenues (see Appendix 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 ajar risks are 1) the plan only attracts Fashions 2) the plan only attracts Shoppers/Planners 3) the plan alienates TFTP current customers. If the plan only attracts the Fashions, then revenue will not be as high as expected, as shown in Appendix 1 under scenario 2. However, the expenses would be much lower and income would still be much higher than in 2006. If the plan only attracts the Shoppers/Planners, then CPM would go down causing advertising revenue to decrease (see Appendix 3). This can be mitigated by focusing more on Fashions than Shoppers/Planners while still trying to attract both.