Harvard Business School Case - the Fashion Channel Analysis

Exercise 1: What is expected outcome of each of the targeting scenarios? (complete both the Ad Revenue and Financial calculators to fully understand the financial impact of the scenarios)

J.Crew as an iconic brand targeting young working professional by focusing on preppy and classy look failed in identifying brand focus. Also, their business model is performing poorly in the fast-fashion industry compare to traditional competitors, with its high prices, diverging quality, and undesirable brand image. Hence, the brand perception by customers has changed and many of them prefer to purchase the discounted products rather than full-priced items.

Corporate values are ‘the operating philosophies or principles that guide an internal conduct of the organization and its association with its clients, partners and shareholders’. It is also a fundamental and long-lasting belief that specific mode of conduction highly valued by the organization’s membership’ according to IBM corporate responsibility report (2002, What is the value of company).

Scenario1: Develop a multi-segment strategy, and focus on Fashionistas, Planners & Shoppers and Situationalists between the women aged 18 to 34.

Total Sales Dollars (for covering each incremental dollar of advertising) = $200,000 / $150,000 = $1.33

The problem that “THE FASHION CHANNEL” (TFC) faces is the selection of the right market segmentation and positioning strategy in order to maintain its position as a leader in fashion related networks, in addition to boosting its advertising sales and viewership ratings.

Sales took the most percentage of total revenue. The revenue of sales increased gradually from $ 214,934 (in thousands) in 2010 to $ 260,832 in 2012 while the figure of royalties reduced gradually from $ 873 in 2010 to $ 681 in 2012 (in thousands). The revenue of other income increased from $ 1,286 to $ 1,325 during this period and then the figure decreased dramatically to $ 533 in the financial year 2012. In addition, in the financial year 2012, a new resource of revenue called membership was developed with the figure of $54.

In order to market the product into the market successfully, marketers need to have some marketing strategy to enter the desired market and make profit. Market segmentation is the process of dividing a market into subsets of consumers with common needs or characteristics (Schiffman et al., 2011). Understanding the market size and segmentation is valuable, but the keys to effective targeting is to know just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends ( Berry, 1999).

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.

Today we live in a world driven by relationships, first impressions and visual communication. As human beings we have a tendency to instinctively allow ourselves to react by what we see and feel at a specific moment, making such reaction unpredictable and capriciously volatile. Studying relationships is of extreme importance because when we understand why public and individuals react to stimuli in a certain way, we can try to manipulate the outcome. This is why Public Relations plays a crucial role in the fashion industry as it is a field of work that is driven by consumers needs and desires. By understanding the targeted audience, we can actually control commercial, marketing, and creative outcomes of a specific fashion organization. This piece of writing will explain and analyse the role and importance of public relations and Communication in the Fashion Industry.

H&M used both Demographics and psychographic segmentation in reaching their customers. Based on the company’s outreach globally, it must understand various cultures, attitudes, beliefs, religion, age groups etc. (Delirium, 2015)

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.

The Fashion Channel (TFC), founded in 1996, is a successful cable TV network dedicated to all things fashion. Although quite young compared to other TV networks, TFC has experienced steady growth and in 2006 forecasted its revenue at $310.6 million. TFC operates primarily as a niche network, focused solely on fashion and fashion related programming, but still manages to reach almost 80 million US households that subscribe to cable and satellite television. To date TFC has been able to experience growth in spite of having no clear segmentation, branding, or positioning strategy. Dana Wheeler, a recent hire as TFC’s Senior VP of marketing, was tasked to fix this.

Improved Advertising: The Fashion Channel (TFC) should concentrate more on improving its advertising strategy. This would be more beneficial for TFC, if it focus on targeting the viewers of certain age groups. For example, the advertisers are ready to pay premium CPM for the target group of 18-34. Focusing of such groups, TFC can substantially grow its advertising revenues (Stahl, 2007).

Marketing management- Gucci's marketing strategies have been very aggressive and have a great impact and great results in terms of its identity, sales, profitability and awareness amongst the market.