The Fashion Channel HBS Case Notes

Introduction The protagonist of this case is Dana Wheeler who is the senior evil president of merchandising for TFH She was looking into preparing a new Segmentation and emplacement Strategy If her boss liked what he heard then they would ladder forward with a 60 million dollar MIMIC scarper utilizing national advertising, promotion, and public relations.This was an increase of 15 million dollars from last year. backcloth TFH was a successful billet network that was the only one who broadcasted up-to- leave news about style 24 hours a day, 7 long time a week It was showed in 1996 It has had consistent and constant addition since the beginning, revenue was projected to grow to 310 million dollars in 2006 marking an other peach year of harvest.The channel was one of the most widely available corner networks reaching 80 million US households (this number represents the number of spate who had TFH in their package not those watching it) Women in the midst of 34 and 54 ye ars were its most avid viewer according to its annual demographic survey Beyond basic demographics the network had no other study on its viewers Nor did it attempt to market to any viewer segments in particular Early on the network had chosen a something for everyone attribute of strategy in its computer programing and advertising TFH has unmortgagedly grown quickly despite it lack of targeted merchandise, that at the beginning of 2006 TFH had realized that other networks were taking note of its success Some of its biggest competitors became Lifetime and CNN who had added fashion scheduling to their lineup This is what prompted Techs CEO to want to dislodge up TFH marketing and be more strategic with their marketing, this is why they hired Dana who extensive experience with marketing packaged consumer goods as well as broad experience in advertising.Techs CEO and other executives felt some urge to resist change and didnt want to fix what wasnt broken Wheelers Plans Frazier ( senior up of ad gross revenue) had warned that TFH would need to terminate the price of a unit of advertising by 10 % if changes werent do in Techs performance He mentioned that CNN and Lifetimes fashion shows were achieving notable evaluates (EXHIBIT 1) Frazier was a wide salesman and was Justifiably worried about sales Wheeler knew that in gild to hold or increase the price it would be crucial to curl a critical mass of viewers who were amoured in the networks substance and were attractive to advertisers The key would be targeting the right viewers and offering advertiser an attractive ripple of viewers when compargond to their competitors BUT if she changed the networks offering in a way that disappointed too many consumers it could risk losing its distribution concomitant Her plan was to build a strategy for segmentation and use it as a base to employ tout ensemble marketing tools at her disposal, conventional/internet ads, PR and promotions to reach targeted consu mers Everyone felt that advertising was TFH elementary growth opportunity. Tiffs Advertising Revenue Model TFH was on target to generate 230. gazillion dollars in 2006 from advertising The advertising business model was built on attracting a mix of male and female viewers on a regular basis think something for everyone strategy Tuft average rating was 1. 0 with 110 million households or 1. 1 million tidy sum people watching at any given time.The ad sales team sold access to viewers through 30 to 60 second spots to a variety of advertisers which included automobile manufacturers, app bel companies, and cosmetic companies There were usually 6 proceedings of advertising per 30 minutes of scheduling (20 percent) 24 hours per day for a total of 2016 minutes per week In 2006 industry data showed that advertisers spent 20 one thousand thousand dollars on advertising in cable industry, however there were over a hundred networks competing for these dollars which made competition fier ce. TFH was the only dedicated fashion network If CNN and Lifetime be successful more channels may copy them creating more competition for TFH The network based ad unit prices on several factors The number of viewers (ratings) The auditory modality characteristics (demographics and lifestyle)Both of the are pain in the neck ad sales and hurting Techs CPM TFH was facing additional competitive challenges in its attractiveness to cable affiliates. On a scale of 1 to 5 TFH achieved a 3. 8 whereas fashion programming on CNN scored a 4. 3 while Lifetime scored a 4. 5 On awareness TFH scored 4. 1 CNN 4. 6 and Lifetime 4. 5 On perceived evaluate TFH scored 3. 7 CNN 4. 1 and Lifetime 4. Memos use the aforementioned data to determine colligate Fees and which package to offer TFH in. If TFH continues to underperformed it may be offered in less openhearted packages making it seen in even fewer households, ruining its prospects of revenue growth or even survival.The Data strongly indicate s that change in programming need to happen so that TFH can increase consumer interest, awareness, and perceived value This change could impart in upsetting some of the quick leal viewers The Management team had been with TFH for years and experienced large count of their growth arguing safe marketing strategies where Wheeler is asking them to invade a risk. Attitudinal Research Findings The Following Data can be found in Exhibit 2 and Exhibit 3 There are four unique mathematical groups of viewers Factionists Planners & Shoppers Sustainability basics While the segments varied in size, Wheeler quickly noticed that the smallest -The Factionists- had a high degree of interest in fashion Most of the male interest occurred in the Basics cluster- the least likely to be engaged with TFH content. Factionists, Planners, and Sustainability all had cluster of women between the ages 18 to 34, the premium demographic.By investing in a major marketing/advertising campaign it would be reason able to expect that awareness and reckon of the channel would go up This could deliver a ratings boost of 20% and would take the rating from 1. 0 to 1. 2 If the current audience mix stayed the same, ad sales were predicting a ten percent drop to $1. 80 Wheelers Preferred Strategy Targeting Factionists, Shoppers/Planners, and Situational All segments mentioned have clusters of the desired age group but both Planners and Situational are made up of older women their existing audience and they would all be targeted It is likely to assume that ratings would increase from 1. 0 to 1. No clear data is given about CPM No clear data is given about the increase in cost of programming Alternative Strategies Focusing on Factionists This segment was strong in the extremely valued 18-34 female demographic It was smaller that other segments representPrimarily targeting Men come after a desirable demographic as men of all ages are a premium demographic No data on ratings No data on CPM No data on Programming costs, however it would be likely to assume that costs would pike as all current programming is geared to slightly older women (their current primary demographic) They would likely and very quickly lose all of their current audience due to shift in programming for a demographic that they are unsure they can even secure. High short-term risk as all current audience will be lost and could result in ratings loss and being taken off the basic cable package Long-term if this strategy is successful, men could be a big audience than women as more age groups are desired by advertisers. This could result in greater affiliate fees and ad sales.