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
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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
Ross Stores, Inc. is an American off-price department store, which has two different stores: Ross Dress for Less and dd’s DISCOUNTS. Ross Dress for Less has around 1,340 stores in 36 states in the United States, and dd’s DISCOUNTS is much younger image than Ross and has 193 stores in 15 states. Its headquarter is located in Dublin, California, and it is the second largest off-price retailer in the USA after TJX Company. Ross offers trendy name brand and designer apparel, accessories, home furniture, footwear, and snacks for everyone from young children to old seniors. Ross Dress for Less and dd’s DISCOUNTS sell products at 20% to 70% off from the regular prices to target people who have limited income but also want to have new products every season. They not only focus on business but also focus on social responsibility. Since they want to know more and be closer to their consumers, they are focusing on four different areas to touch their target customers.
Also the CPM will increase to $2,5 because of a dual targeting. In addition to this the average Rating will increase from 1% to 1.2%. Cons: To ensure that there were selections aimed at both segments; Wheeler needs to spend $20,000,000 more on programming. Because of the determination only on this two segments it can be that the number of the loyal viewers of TCF will decrease. Exercise 3: If you were Dana Wheeler, what would you recommend and why? If I was Dana Wheeler I would recommend TCF that they should adopt Scenario 3. However, Scenario 3 has a few disadvantages. For example the possibility to lose some loyal viewers and furthermore TCF has to spend $20,000,000 more on programming which means investing a lot of money for them. But in my opinion, in Scenario 3, the benefits exceed the disadvantages. On the one hand through this Scenario the Net Income will increase more than $100,000,000. In addition to that the CPM will increase to $2,5 and the average Rating will increase from 1% to 1.2%. On the other hand 50% of all US Television Households consist of Fashionistas and Planners/Shoppers. In these two markets the 18-34 year old female audience represents 50% and 25% of the cluster respectively. TCF should therefore increase the advertising revenue. The Scenario 3 is better than the Scenario 2 because Scenario 2 only focuses on the Fashionistas
Second objective was to determine whether J.Crew should keep the target segment as young working professionals
5. An analysis of the individual customer accounts suggest that TFC’s current pricing model is ineffective. They are undercharging an alarming number of their customers thereby reducing their overall profitability. Based on this information, managers will hopefully elect to implement the services based pricing model so that customers are charged based on the services they are actually consuming. Ideally, changing the current pricing model will resolve the issue of customers reducing profit by 140% and 60% (Exhibit 8, numbers 3 and 4). If there are still profit draining customers, management should revisit and assess accordingly, either further increasing fees to those customers so their contribution is positive, or perhaps dropping these customers to increase overall profitability.
2. What drives or causes each of the revenue streams and how much does Tech Mall expect to earn from an additional “sale” in each stream?
With our main objective in mind, we have proposed an Integrated Marketing Campaign that is geared towards our target market of young adults. By choosing alternate forms of media that appeal more to our younger target market, we can place Macy’s in these customers’ evoked set. For example, we plan to use media outlets such as social media websites, television, magazines
The women's apparel market is highly competitive. With the launch of a new active-wear line from Harrington Collection's, more and more competitors will start to realise the potential value in in producing an active-wear line of their own. The active-wear market is growing so rapidly (expected to double turnover from 2007 to 2009), that eventually all of Harrington's competitors would likely be expected to launch a line of their own, relying on existing brand loyalty and high-scale advertising campaigns to capture market share and move units.
Under Armour’s business strategy towards market segmentation is broken down into three different basis; Age, Gender, Uses. The first major market segmentation is by age, different age groups demand different products and Under Armour has produced certain merchandise to appeal to each generation. The second is Gender, both male and female respectively make up roughly 50% of the market equally.To appeal to females UA produces apparel in brighter colo, as a fashion forward athletic wear. While for males they they cater toward masculine vibe of tight fitting and resistant to wear and tear. Lastly, UA segments by the range of uses for their products.
Depending on the product, staff interacts with a trainer of Sephora. Training is provided when a new product is introduced.
Gucci is a luxury brand made in Florence, Italy in 1921 by Guccio Gucci. These luxury brands consist of fashion and leather goods. The company first started out as a family business. It was Gucci and his two sons who expanded the business and opened it as a company. The first store was opened in Rome and opened in 1938. The second store was opened in Milan and opened in 1951. In the beginning, most of the company’s customers were horseback riders, which is how the company came up with its signature logo. Gucci has become more innovational over the years with their products. Gucci is known for their handbags, women’s and men’s shoes, dress shirts, wallets, belts, fragrances, briefcases and accessories. Today, Gucci operates in about 550 stores and in over more than 30 countries.
The relationships with trade show retailers are highly valuable in that they often prove to be long term. Re-orders by retailers from trade shows occur at a 50% clip, and they will re-order twice per year. With an average order from a retailer being $569 (Table 1), and the direct material and labor cost fixed at $267, the contribution margin per order at trade shows will be $302 (Table 2).
When a brand is created, many will ask the questions that haunt all of us trying to start a company. Will it work? Should we stay online or launch a brick-and-mortar store? Will I make profit or fail? These questions arise even more when the company is to start only online. Because of this, e-commerce fashion brands must constantly evolve and expand their styles to maintain the interest of their target customers. Fashion Nova is one fashion brand that manages to stay relevant among its consumers because of their edgy style and quality priced clothing. Fashion Nova was first established in 2010. It gained its popularity from celebrities promoting it on their social media platforms and the fact
This ties in closely to the problems they had with the “product” section of the marketing mix. TiVo was
Because our main selling point is “local”, so our promotion strategy should focus on local market.
Please read and analyze this case on market segmentation and targeting options for a cable television network dedicated to fashion programming. No research into the industry or firm is necessary. Please use only the information provided by the case.