The Fashion Channel Case Study

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Internal Obstacles:

Although TFC CEO Jared Thomas had announced plans to sharply increase TFC’s investment in advertising and to build a modern brand strategy, as well as securing TFC’s position as the market leader during a quarterly executive meeting in June 2006, he and other senior leadership team members felt an urge to resist change primarily because the network had been highly successful to date and no one wanted to “break something that isn’t broken”. While this might still lead to an increased investment in advertising, the marketing strategy would remain the same, with the goal of achieving the highest possible viewership numbers with no specific focus on segmentation or positioning.

Norm Frazier, however, wanted to drive TFC to compete against the new fashion content on CNN and Lifetime. CNN was delivering great numbers on male viewers and Lifetime was attracting younger female demographics. Frazier believed that these two market segments could be sold to advertisers for a premium cost per thousand (CPM), which is the price that an advertiser would be willing to pay for an “impression”, or moment of viewing on the network. In 2006, the market segments that commanded a premium CPM were men of all ages and women aged 18-34. Frazier thought wanted to go after these two networks to draw these view groups back to TFC. Targeting the groups Frazier called out as being lured away to CNN and Lifetime programing would involve a marketing strategy focused less on the quantity of viewers and more on the quality of viewers, and what they would yield in terms of CPM and advertising revenue.

Target Recommendation:

Which target scheme did Wheeler ultimately choose (this could be a trick question, so read carefully).

- doesn’t appear she chose one

Which target would you recommend and why (be sure to include your target selection criteria and an analysis of the financial data in your recommendation)?

- Maintain broad appeal to cross segment of all but basics – 1.2 rating / $1.8 CPM

- Focus on Fashionistas - .8 rating/ $3.50 CPM / $15M per yr in programming

- Focus on Fashionistas & Shoppers / Planners = 1.2 rating / $2.50 CPM / $20M programming

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