Fashion Channel Case Analysis Essay
Wenwen Gao (872236636)
Introduction and Problem Definition
As the only network dedicated solely to fashion, The Fashion Channel’s (TFC) consistent “Fashion for everyone” strategy is facing challenges by the other two competitors Lifetime and CNN, which are separately targeting young females and men by their fashion-related programming. The channel needs to target the right viewers and offer advertisers an attractive mix of viewers, consequently strengthening its competitive position.
External Situation Analysis
Current Networks Industry
In 2006, consumer advertisers spent almost $20 billion on cable networks. In the industry, there are more than 700 cable networks, and most networks’ …show more content…
Target segmentation and position to women between 18-34
Pros: The audience mix can stay almost the same. TFC won’t lose current loyal customers while attracting more women between 18 and 34. Rating will boost from 1.0% to 1.2% (See Exhibit 2). Increased rating can attract advertisers. Ad sales will be increased from $230,630,400 to $249,080,832. Net income will be increased from $93,711,488 to $94,908,407 (See Exhibit 3)
Cons: Without clarifying the brand’s essence, TFC can’t position its programming in the minds of the valued target market. CPM will drop from $2 to $1.8 (See Exhibit 2). Compared to Lifetime and CNN, which provide specific audience’s characteristics to advertisers, TFC’s broad multi-segment approach is not competitive and differentiated enough to avoid CPM’s dropping. Advertisers are more interested in higher value of the audience. TFC’s advertising revenue potential will be greatly threaten by its competitors who provide more valued viewers to advertisers.
Place more focus on Fashionistas segment and spend additional 15 million on programming
Pros: Highly valued customer in 18-34 female demographic will attract advertisers who mainly focus on younger, female-oriented fashion. CPM will be increased from $2 to $3.5.