The Fashion Channel Case

display The carriage groove is losing highly valued lulus to competitors, causing a intercommunicate belittle in advertize tax tax revenue. TFH leases a invent to purify its ratings and increase its advertising revenue. We recommend that TFH implement scenario three and channelise the Fashions and Shoppers/Planners. As we testament show, this dual targeting design has the highest income potence by pitch in the young, highly valued ravishers needed to increase advertising revenue. abridgment We recommend the third scenario of targeting both the Fashions and theShoppers/Planners because it offers the highest ad revenue potential (see appendage 1). Even though this computer programme has the highest total expenses, it volitions in the highest brighten income and shore potential (see addendum 1). If TFH implemented scenario two and targeted just when the Fashions, the CPM would go up drastic totallyy. However, Fashions except represent 15% of households and the comely morsel 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 scratch scenario is not a good extract because it increases advertising revenues only a small amount. Implementation The implementation aim involves 3 major footsteps. The rootage step is to look the two fragments and find out what manikin of program will attract and retain both segments. The second step would be to invest in the new programming. The third step is to develop an advertising, promotions, and habitual relations campaign targeting the two segments. Risks The implementation of this plan has any(prenominal) 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(prenominal) revenue will not be as high as expected, as shown in Appendix 1 under scenario 2. However, the expenses would be a good deal cut 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 cannister be mitigated by counselinging much(prenominal)(prenominal) on Fashions than Shoppers/Planners while still trying to attract both.The Fashion lane CaseStarting in 1996 TFH (the fashion channel) had a great mastery because of a big audience and no competitors in the business. Noticing the great conquest competitors such as CNN and lifetime started to likewise pee fashion-based programmer. Since viewers today 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 research which pointed out that both CNN and lifetime got a break dance feed ass in customers ecstasy in consumer interest as well as in consciousness and also perceived value.Having their viewer numbers decreasing, TFH has to pay even much attention on their two main revenue streams cable harmonise fees and advertising Therefore they wanted to know who their audience is to can better react to them. They reached this with help of a detailed demographic breakdown which take to the result, that 61% of their viewers are female and 33% cosmos senior 18-34 which is less then 45% universe aged 35-54, but the younger group is stronger in this business Additional to this they did a SFA associated survey which divide the audience into 4 groupsFactionists highly engaged in fashion with organism 15% of all viewers, 61% macrocosm female and 50% being aged 18-34 Planners and Shoppers participants in fashion on a regular al-Qaida with being 35% of all viewers, 54% being female and 25% being aged 18-34 Sustainability participants in fashion for specific needs with bei ng 30% of all viewers, 50% being female and 30% being aged 18-34. Also they accommodate 45% with children in the household fundamental principle not interested in fashion with being 20% of all viewers and 45% being female. 2) Which research method was most steadying to you in developing and evaluating the section options?As mentioned before, there are quadruple 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 pee the opportunity to realize who their audience is and so they can work on getting a new audience, probably within the other groups. They also understand who is the most powerful group in their business so that they can work on reaching their needs and with these information it was potential to work out the naval division options. 3) What are the segmentation options?Broad-based merchandise The terminal is to develop a multi-segment str ategy with a strong focus on Factionists and the Planners&shoppers and also have a focus on women aged betwixt 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 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 better financial result a get alongst an increment of $20. 000. 000 in fixed woos and an increment of $4. 151. 347 in variable costs, the increment of revenue by Ad sales increases by $138. 378. 240 and the company can have the maximum illuminate income ($168. 867. 232) and also the maximum margin (39%). Scenario number 1, instead, is the bastinado one The Fashion Channel doesnt have extra fixed cost but also their income are the lowest one ($249. 080. 832) that is $96. 864. 68 put down 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 bring forward 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 assembling (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 pass? 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 twisty with this scenario is very high. TFH will lose some of their most trusty 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 operational 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 melt them. Indeed Planners & Shoppers will improve he rating in golf club 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 bet 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 keep 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 pull sure to keep these programs when they begin their new marketing plan.Moreover, The Fash ion Channel should look at Lifetime 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 allow a large share of the market. Furthermore, TFH must continually find ship canal to improve consumer interest, awareness, and perceived value. Lastly, TFH must be aware of its competition and be ready to differentiate 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 segm ents. 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 nidus more on Fashions than Shoppers/Planners while still trying to attract both.