The Fashion Channel Case Analysis Essay
Introduction and Problem Definition
The Fashion Channel case illustrates the development of market segmentation options in implementing marketing strategies in a changing competitive environment, and demonstrates how quantitative analysis may be used to support a strategic marketing decision.
The Fashion Channel (TFC) was a widely available niche cable network which only offers fashion-oriented programming. It was very successful until other regular networks began to copy its concept and take market share of it, which as a result, had a severe negative effect on TFC’s advertising revenue and affiliate fees. The problem is how to develop the segmentation and positioning, change the current …show more content…
Disadvantages: Fashionistas is the smallest segment in four clusters. It is risky if only target at this group and the average viewers will decrease as well. It also needs additional expense to change the programming which will bring upset to subscribers and employees.
Scenario3: Target at both Fashionistas and Shoppers & Planners clusters and spend $20 million on programming. (Product specialization)
Advantages: Dual-targeting will ensure the average viewers and rating. It is expected that rating will grow to 1.2 while CPM will come to $2.5. (See Appendix 2)
Disadvantages: There is additional $20 million should be draw from the net income.
After carefully looking at the pros and cons of the three options, I recommend that Scenario 3 is the best solution for Dana.
First, the Fashionistas has superior interest in fashion while the Planners & Shoppers has the largest cluster size. The combination of them will exert TFC’s potential (professional and full-time) into full play to compete with both fashion-oriented and regular programming. Second, the Planners & Shoppers will improve the rating, in order to attract more ad buyers and at the same time, the Fashionistas will enhance the CPM to gain more ad revenue (See Appendix 2).