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The Fashion Channel Case Solution
Two entrepreneurs launched “The Fashion Channel” in 1996, a ground-breaking cable TV network that continuously broadcasts relevant information and amusing programming relating to current fashion trends. No positioning strategy, market segmentation, or branding has helped the cable TV network for over a decade. It has been dominating the market with revenue and profit growth above the industry average reaching out to about 80 million US homes that subscribed to cable and satellite television, with the passionate audience being mostly women aged 25 to 54. However, in 2006, new rivals ‘CNN' and ‘Lifetime' entered the market, posing a threat to the Fashion Channel cable TV network. To retain the channel's dominant market position, TFC's founder and CEO, Jered Thomas, presented a new strategy concentrating on "Marketing" as an effort for future development by investing in network commercials. The channel has also recruited Dana Wheeler as senior vice president of marketing to manage the problem. Wheeler realised that the channel needed to acquire a critical mass of people interested in both the network's programming and the sponsors. "Deliver quality audiences as demanded by advertisers" is the main focus of her recommendations, assuming that her recommendations will increase revenue aggressively.
Following questions are answered in this case study solution:
The Fashion Channel is facing intense competition from likes of CNN and Lifetime who were ahead of TFC in terms of popularity and ratings. Recommend a feasible solution to increase popularity.
Option Analysis. Define the segmentation scenarios considered by Dana Wheeler and discuss the pros and cons of each scenario
What is the expected financial outcome of each targeting scenario?
Recommendation. Based on your analysis, and putting yourself in the place of Dana Wheeler, which option would you recommend to the Management team? Support your recommendation: why do you make the recommendation?
Case Study Questions Answers
1. The Fashion Channel is facing intense competition from likes of CNN and Lifetime who were ahead of TFC in terms of popularity and ratings. Recommend a feasible solution to increase popularity.
Rather than relying just on a single demographic study, the Fashion Channel should acquire as much information as possible about its consumers. Surveys, focus groups, and experiments should be conducted by TFC to get the information. TFC may be able to acquire data on different sorts of clients and develop a less aggressive marketing approach to target a certain segmented group by performing various research and surveys.
To compete with its rivals, TFC must be adaptable enough to pursue aggressive dynamic tactics. Many variables go into the creation of network ads, including user feedback, demographics, and market competition. As a rule, networks with a large number of high-value consumers are assigned higher CPM values (Cost per thousand) (Fashionistas). Because of this, TFC must target Fashionistas to raise income and keep up with the competition.
TFC must thoroughly examine the characteristics of its customers, such as their attitudes and behaviours regarding new fashion trends. Rather than focusing on a single group, the study research should be broken down into smaller subgroups. A variety of groups, such as Fashionistas, Planners & Shoppers, Situational Lists, and Basics, may be formed via the process of segmentation. The ideal clients may be found by properly examining every group.
TFC must identify the target audience (18-34) and attract them by promoting new powerful fashion programme blocks, which in turn offer a chance to grow high valued consumers to improve ad sales. TFC's ground-breaking can only improve its market share by creating new fashion blocks for the correct consumer segmentation if current market trends are linked with diverse fashion trends.
TFC's marketing and advertising budget have to be beefed up if it is to reach a broader audience and raise awareness of its cable TV service. A competitive edge over its competitors is created as a result of this. TFC may utilise a variety of methods to raise awareness, including web and mobile advertising, print advertising, guerrilla advertising, broadcast advertising, and more. TFC may grow its audience by running free advertisements to explain current fashion trends.
2. Option Analysis. Define the segmentation scenarios considered by Dana Wheeler and discuss the pros and cons of each scenario
Pros and Cons of Each Scenario
As a starting point, Wheeler looked at TFC's present cross-segment approach to Fashionistas, Planners & Shoppers, and Situation lists. While this scenario has the potential to raise ratings by 20%, it is likely to follow Frazier's prediction and result in a drop in CPM to $1.80. Lifetime and CNN will likely continue to infiltrate this market and hence limit TFC's pricing power in this category. However, one advantage of this programme is that there is no added cost to the organisation.
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