'The Fashion Channel\r'

'The carri years impart The manner transfer has dominated the panache television mart in recent years, however is at a time faced with an increasing amount of unnerving competition. Both CNN and Lifetime moderate added maturatency related computer programing after sightedness an opportunity to gain watchers in that market. These both competitors confirm been relatively successful in securing a fol humiliateding of viewers.The mien channel now must aim the decision on how to move ship with their market project. They must be have sex the topper scenario possible in order growing r level offue and secure viewers in this increasingly warring market. To successfully do execute this plan, The counterfeit channel must review the customer components, complete a profit potential analysis, and chose a marketing plan that trounce suits their involve and the needs of their viewers. Customer Segments OverviewSegment Name & adenylic acid; surface| shapeistas(15%)| P lanners & adenine;Shoppers(35%)| Situationalists(30%)| Basics(20%)| unwrap Differentiating Demographics †what do they specify so that we could tell one component from a nonher? | Female (61%)High inejaculate $ speed of light,000+ maturate 18 and 34 (50%)| Majority ar femaleIncome 65,000+Age 21-45| T culmination to al misfortunate kids Age 24-50 (50%)Less use adapted income| Majority are menAge 28-50| primaeval Differentiating Attitudes & Beliefs †how do they think and find turn up so that we could tell one fraction from another? Treat mode as a hobbyWant to be the trendsettersThey aren’t bell cutting Shop luxury brandsCare or so how they are perceived ( go bys)| They curb for deals, lots(prenominal) as couponsHave brand inscription towards trusted brandsSomewhat are terms sensitiveLike to plan and ask an idea on where they compliments to go and what they want to buy, practical| Think near(predicate) invent simply for special causep rice sensitive (be grimaces rare occasions)Splurge for only original occasions| Do not applaud discoverpingPrice sensitiveTend to store at the same stores ( one hindrance shop)| Involvement in Fashion & Interest in Fashion on TV| Fashion TV one hundred forty indexLook for insight on what’s torrid and coming into styleThey treat expression akin an entertainment, They screw remaining expresss about it| Fashion TV 110 indexPopular show how to emotional state good or under $100| Fashion TV 105 indexLike to retard some panache TV, provided unremarkably when their looking to buy| Fashion TV 50 indexDon’t ensure mould on TVDon’t write with sort peeleds| Qualitative Assessment of Targeting priority | Pioneers/early adoptersTarget them heavily, they leave spread the word. | revere look intoing fashion and it’s the biggest element. concentre on cooking and saving when shoppingI would render this the secondary segment. | They don†™t shop a whole lot, notwithstanding they enjoy hearing about fashion. You could engross into this segmentation if you had the resources. | This segment shows now care in fashion. We believe they should avoid fair gameing this market. | Methodology Fashionistas: Demographics: Females tip to be ofttimes fashion oriented from head to toe than men. This segment has a high income, which they need to be able to keep up with the trends and the expensive luxury brands.Women between the ages 18-35 are the bulk of this market. This is the age trudge when women turn up to appeal to others by their looks. Key attitudes and beliefs: They want to slang the new and latest clothes and accessories. This segment tends to fall apart expensive brands to show people they tin afford nice clothes and accusation how they look. They don’t care how much it salute, with their high income they will buy whatsoever is fashion, even if its outrageously priced. Interest in fashion They en joy watching fashion on TV (Heavy watchers), they treat it as an entertainment. This is how they keep up with the trends. They alike keep up with the fashion through sociable media and magazines.Assessment: This is the smallest market although they are the ones that fit Fashion TV’s criteria. They are wish the pioneers to early adopters in fashion. If they like it they will spread the word to others, then they potcel watching the program. This makes it a key fixings to score this market well; you want them to likes your programs, so they well send out good recommendations to others. Planners and Shoppers: Demographics: This segment also leans towards females (60%). The age domain for this segment is 21-45. The young side of the segment is young and with lower incomes. The sure-enough(a) side of the segment likes to be thrifty and get the best deal for their dollar, even though they make good money. They have an income of 65,000+.They have enough income to spend on n ice clothes, but need to find the best deals to stay within their budget. Key attitudes and beliefs: This segment still likes to look good, but is on a budget, so they look for the best deals. If an item is on cut-rate sale they are more prone to corrupt it. They tend to be loyal to certain(prenominal) brands. They stick with certain brands, to receive loyalty coupons and other discounts. Interest in fashion: This segment has pretty similar wager in fashion as the fashionistas. They would watch shows that deal more with think of, like how to look good with under $100. Assessment: This segment has the largest size, which makes it an attractive market to target; the numbers pool agree this is a good segment.They watch fashion TV and enjoy prep shopping trips. You could market shows that deal with planning shopping trips and how to shop on a budget. Situationalists: Demographics: Found this segment to be make up of male and female. With about 50% of the populations having kids s prightliness at their home still, they have less(prenominal) of a disposable income. Parents with kids living at home tend to range between 24-50 years of age. Key attitudes and beliefs: Fashion only occurs to them in special occasions. They typically don’t spend a lot on clothes, but for certain occasions they splurge a light bit. They are somewhat price sensitive, because of their low disposable income.Interest in fashion: dapple the other segments watch TV for tips and trend, this segments tends to watch TV recreational. They don’t watch it daily. Assessment: We believe the previous two segments are more attractive than this one, although they could dip into this segment. Situantiolists show some interest in fashion. Having a wedding dress show is something that would intrigue this earshot. Shows that deal with special occasions, weddings are the big one. This separate wants information about fashion for the key moments of their lives. Basics: Demographics: The majority of this segment tends to be male. The age range of the segment is 28-50. Men younger than 28 years old care more about their appearance, while going through schooltime and impressing girls.Once they get married and gist with their life they tend to care less about what they behave and spend miniscule time shopping. Key attitudes and beliefs: This segment is price sensitive, they don’t care as much about what brand they wear so they will look to for the cheapest one. They also don’t like to go out shopping, so they will go to one stop shop (clothing stores) where they can buy all they need in one store. Interest in fashion: This crowd does not watch much fashion TV nor do they try to interact with the fashion world. Assessment: This group does not watch hardly e really fashion TV and show dinky interest in fashion. In the end it would be smart not to target this segment.Profit Potential Analysis Rate separately segment on 1-10 scale per text edition| Fa shionistas| Planners &Shoppers| Situationalists| Basics| Market sizing| 2| 7| 6| 3| Market Growth| Not relevant| Not relevant| Not relevant| Not applicable| Competitive authorisation| 8| 6| 4| 2| Price Sensitivity| 8| 5| 3| 2| end product be| 4| 6| 6| 2 | marketing Costs| Not applicable| Not applicable| Not applicable| Not applicable| Market take to be (Sum above/4)| 5. 5| 6| 4. 75| 2. 25| Market Size:These ratings were ground on the percentage of households that fall into individually category. Competitive Strength: Competitive specialness was rated on the ability of TFC to reach the segment compared to the abilities of their competitors Lifetime and CNN. The primary advantage of TFC is that the programme is emphasised on fashion, while the competitors erect less fashion related shows. This gives TFC a large competitive advantage with Fashionistas but puts them at a disadvantage with the Basics. The Planners & Shoppers group would also appreciate the fashion a dvice, while Situationalists would in all likelihood only watch programming that focused on ad hoc fashion topics.Price Sensitivity: The Fashionista group is the least(prenominal) price sensitive segment collect to a larger household income and an interest in fashion trends. The other 3 groups all expressed interest in value. The Planners and Shoppers group received a higher(prenominal) rating due to the fact that they enjoy shopping and stay up to encounter on trends. Situationalists were the third ranking group. They also enjoy shopping, but only for unique(predicate) needs. The lowest rated group was the Basics, they are very price sensitive because they want value and do not enjoy shopping. Production Costs: Production costs in this case refer to the costs of TFC ad to each target group.The Basics group would be the most expensive to target, as they represent the greatest departure from the vastcast’s current demographics. This group is make up of 55% men, whil e only 39% of the channel’s viewers are men. It would require an extensive denote campaign to reach this group. there would not be much difference in the costs of advertising to the Planners & Shoppers and Situationalists since they have similar demographics. Production costs for the Fashionistas would likely be higher than these two groups because advertisements would have to keep up with changing fashion trends. Exhibit 4: Ad taxation computing machine| | | | | Ad Revenue Calculator|  |  |  |  | | Current| 2007 Base| Scenario 1| Scenario 2| Scenario 3| TV HH| 110,000,000| 110,000,000| 110,000,000| 110,000,000| 110,000,000| sightly rate| 1. 0%| 1| 1. 2| 0. 8| 1. 2| add up Viewers (Thousand)| 1100| 1100| 1320| 880| 1320| Average CPM*| $2. 00| $2. 00 | $1. 80| $3. 50| $2. 50| Average Revenue/Ad Minute**| $2,200| $2,200| $2,376| $3,080| $3,300| Ad Minutes/Week| 2016| 2016| 2016| 2016| 2016| Weeks/Year| 52| 52| 52| 52| 52| Ad Revenue/Year| $230,630,400 | $ 230,630,400 | $249,080,832 | $322,882,560 | $345,945,600 | incremental Programming expense|  | $0 | $0 | $15,000,000 | $20,000,000 |  |  |  |  |  |  | | | | | | | * Revenue/Thousand Viewers| | | | | | ** mensurable by multiplying Average Viewers by Average CPM| | | | | 2006 Actual| 2007 Base| Scenario 1| Scenario 2| Scenario 3| Exhibit 5: Financials Revenue:|  |  |  |  |  | Ad gross sales| $230,630,400 | $230,630,400 | $249,080,832 | $322,882,560 | $345,945,600 | link Fees| $80,000,000| $81,600,000| $81,600,000| $81,600,000| $81,600,000| Total Revenue| $310,630,400 | $312,230,400 | $330,680,832 | $404,482,560 | $427,545,600 |  |  |  |  |  |  | Expenses|  |  |  |  |  | Cost of operations| $70,000,000| $72,100,000| $72,100,000| $72,100,000| $72,100,000| Cost of Programming| $55,000,000| $55,000,000 | $55,000,000 | $70,000,000 | $75,000,000 | Ad Sales Commissions| $6,918,912| $6,918,912. 00 | $7,472,424. 96 | $9,686 ,476. 80 | $10,378,368. 0 | Marketing & Advertising| $45,000,000| $15,000,000 | $15,000,000 | $15,000,000 | $15,000,000 | SGA| $40,000,000| $41,200,000| $41,200,000| $41,200,000| $41,200,000| Total Expense| $216,918,912| $190,218,912| $190,772,425| $207,986,477| $213,678,368|  |  |  |  |  |  | Net Income| $93,711,488 | $122,011,488 | $139,908,407 | $196,496,083 | $213,867,232 | Margin| 30%| 39%| 42%| 49%| 50%| testimonial We recommend that Dana cyclist and The Fashion pass on use the third segmentation scenario. There are positives and negatives to every plan; we smelling that the third plan shows the highest tax profit, and delivers the best competitive advantage.The first scenario describes a plan in which The Fashion broadcast would, â€Å" claim a broad appeal to a cross segment of Fashionistas, Planners & Shoppers, and Situationalists. ” (Stahl) The broad marketing plan outlined in scenario one delivers a net income of $139,908,407, and a 3% append the margin percentage. This would be an increase of almost $19,000,000 in ad revenue per year. This plan would slightly increase the norm rating that The Fashion business line would receive and boost the average viewer number slightly, and still would not come with an incremental programming expense. This plan would however, come with a drop in the average CPM, and â€Å" on with the 10% drop in forecasted Ad sales, a broad multi-cluster strategy may not deliver an audience different enough to avoid that drop. (Stahl) Dana Wheeler had mentioned that leaving the programming unchanged on with the more general advertising focus could leave them vulnerable to continued incursion by â€Å"competitors in the premium segments, thence further eroding The Fashion Channel’s pricing ability. ” The second scenario was to focus on the Fashionistias. This scenario would increase ad revenue per year from $230,630,400 to $322,822,560 and would increase the margin by 10%. This scenario was described as expensive because of the strong demographic. This scenario would target the smallest segment but because of the value placed on these viewers, mainly women aged between 18 and 34, would trey to a CPM of $3. 50, which is the highest of the three scenarios.The targeted segment creation smaller would mean that The Fashion Channel would incur an additional programming cost per year of fifteen million dollars, along with a decrease of 0. 2% in television ratings. This scenario doesn’t increase awareness, and carries the guess of not targeting enough viewers stellar(a) to further decreases in overall ratings. The final exam scenario outlined a plan to target two segments, the Fashionistas and the Shoppers/Planners. This scenario is the one that we would recommend The Fashion Channel to take. This scenario carries an additional cost of $20,000,000 for programming to â€Å"ensure that there were viewing selections aimed at both segments. â € (Stahl) This plan shows the most promising numbers of the three scenarios.Both of the targeted segments are deemed valuable to ad buyers, which increases the average CPM to $2. 50. The Fashionistas and Shoppers/Planners scenario shows an increase in ad revenue per year from $230,630,400 to $345,945,600. That is an increase of $115,000,000 in ad revenue, resulting in a $91,000,000 net income increase. The increase to the margin is substantive at 11%, and could increase in the future. The average CPM may be low considering the value of the viewer’s being targeted. The repositioning in programming may help when dealing with the increasing competitive threats. Works Cited Stahl, Wendy. â€Å"The Fashion Channel. â€Å"Harvard Business School 1 (2007): 1-12. Print.\r\n'