Fashion Channel Case : A New Market Segmentation And Positioning Strategy

729 WordsJan 25, 20173 Pages
Fashion Channel Case MKTG 4400 Jordyn Allred Background: Dana Wheeler is the current Senior Vice President of Marketing for The Fashion Channel. Currently, Wheeler is reviewing her recommendations for a new market segmentation and positioning strategy. Her highly competitive positioning strategy comes with a price tag of $60 million dollars. Wheeler’s main focus is to attract new customers while maintaining steady growth in both profits and growth. TFC has two main methods of generating revenue which are cable-affiliate fees and advertising sales. TFC is included in all basic cable packages. Cable-affiliate fees generated $80 million in 2006 with TFC earning $1.00 per viewer. Advertising prices were determined by the number of…show more content…
Wheeler’s new strategy could backfire it’s a possibility that TFC’s customers won’t like the new content or videos. Possible Solutions: Wheeler was able to come up with three different scenarios to increase revenue and attract new customers. First, she ramps up marketing campaigns that would cross-segment “Fashionistas, Planners & Shoppers, and Situationalists.” Wheeler was able to conclude that this scenario could boost viewer ratings from 1.0 to 1.2 for a 20% increase. On the downside, ad sales were forecasted to decrease 10% to $1.8 CPM. This scenario would be risky because CNN and Lifetime could both continue to penetrate the market which would decrease TFC’s ability to increase ad sales. Second, since the group “Fashionistas” are a niche segment that only adds up to 15% of all households. Wheeler was able to estimate the average viewer rating would drop to 0.8 which is 0.2 lower than current ratings. By focusing on them it’s projected ad sales would increase to CPM $3.50 since the audience they are presenting to is younger and female which allow TFC to charge more for advertising spots. Wheeler believed it was necessary to invest in new programming to ensure this segment would remain interested in TFC that would cost roughly $15 million. Lastly, she thought of targeting the “Fashionistas” as well as the “Shoppers & Planners” since they would be targeting two groups she anticipated viewer ratings would increase 20% to 1.2 which could increase CPM

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