Case study The fashion channel

TFC was a successful cable TV lucrework- and the merely pelfwork dedicated solely to mien (Stahl,2007). It was whiz of the most widely available niche networks with an 80 million subscriber base (Stahl,2007). It has had a constant growth above the industry average until the emergence of sensitive competitors such as CNN and Lifetime in 2006. One of the most Copernican strengths of TFC is the fact that the channel is in the basic cable package. As contrasted to CNN or Lifetime, TFC is not a pay channel and thus has a higher possibility to reach more viewing audience than its competitors.However, TFC is circulating(prenominal)ly set about two major problems. These atomic number 18 an unclear hind ending convention and an add-ond situation of competitors. These problems could be also seen as their weakness. Since their target group is unclear, unclear strategies power be formulated that could hinder the growth of the channel. Based on the guest and market data from the case, the largest current client base of TFC are distaffs surrounded by the age of 35 and 54 ( rangeing 27. 45% of the viewers). While their ideal targeting groups is slimly younger females from the age of 18 to 34, they only make up for 20.13% of the viewers.Generally, this group likes to follow the way celebrities dress. Information about discounts in way stores and fashion recommendations are valued as well by this age range. However, it should be noted that their income might be lour compared to other age ranges. On the other hand, male viewers could also represent an interesting customer base for the channel. Males nevertheless, focus more on saucy designs, fashion trends and bran-new brands. Different to young females, males can be less sensitive to price.Unfortunately, TFC has the concluding market share with only1. 1M households (representing 1% of the market share). Besides, the biggest customer bases for contrive Today are females ranging from 18 to 34 years old representing 27. 09% of their viewers. They represent a big threat for TFC as the later might earn by targeting this age range in the future. On the other hand, means tonight from CNN especially targets male customers. Therefore not surprising, males represent 45% of their viewers base. Both Fashion Today and Fashion Tonight also have a larger customer base than TFC, which are 3. 3M and 4. 4M respectively.In order to change the current situation, Wheeler came up with three scenarios. The first one is maintain a multi division of Fashionistas, Planners & Shoppers and Situationists. The advantage of this scenario is the increase in net income partially because no additive costs would be incurred. At the identical time, TCL could also target the 18-34 age group. However, the CPM will be $0. 2 lower than 2007. Also, in this scenario, no clear targeting group would yet arise. The second scenario is targeting the segment of Fashionistas.The narrower segmentation will commit the com pany in a separate situation with a 0.8% decrease of its market share (0. 88M). It also requires an incremental cost of $15 million. Finally, the risk exists that a large part of the current viewers wants might not be met by this differentiation as programs might be seen as to professional or distinct. However, buying power in this group is high and CPM will go up to $3. 5 resulting in the increase of both ad revenue enhancement ($322,882,560) and net income ($151,496,083). The third scenario entails focusing on two segments, Fashionistas and Shoppers & Planners. The average rating could increase to 1. 2% with a broader viewers pool (1.32M) and extract highest ad revenue and net income with $345,945,600 and $168,867,232 respectively.Meanwhile, younger aged females should especially be targeted if this segmentation is put into place. Nevertheless, a $20 million investment is required for this scenario and only targets nigh 50% of the females. There is a possibility to lose custome r devotion in this case and consequently part of its customer base. Based on the analysis, it is wise to choose scenario 3 which entails the dual targeting of Fashionistas and Shoppers & Planners as a new implementation strategy since it generates highest ad revenue, net income and profit margin.50% of the entire female viewer base could be targeted by this dual targeting with passion for fashion and high income. In this case, females from 18-34 will be targeted as they represent their largest viewers base which takes 32. 5% of the entire female segment. In terms of positioning, 4Ps is confiscate to describe the strategic changes needed. It is advised to modify the program profile into one that is more novel and intriguing to the younger generation by meliorate product quality. For instance, it can invite celebrities more often to the program. Thus, it responds to the needs of the target group (females aged 18-34).With respect to price, it could decrease their ad price by 5% whic h would result in a CMP of 2. 375. It is predicted that with a lower price, more advertisers are willing to launch their ad on the fashion channel. Besides, TFC should pass on promotion by opening a website with specific focus on fashion news and brands for youth, thereby rapidly establishing customer sensitivity and sentiency to their product. Lastly, in terms of Place, TFC might find it in their interest to lose ones temper overseas through contracting with foreign TV channels, producing tailored programs base on local preferences on fashion.