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KGEN FM Station

Case Study

Time Context
The case happened in 1992

Executive Summary
As of July 1992, KGEN target a broadcasting
station which has Spanish language format to
currently underserved demographic group of
Hispanic listeners. The station is forecasted to
generate a local commercial audience share of
2.1% and a market revenue share of 2.2%. KGEN
revenues are at $239,000 for the last half of 1992
and $1.7 million the next year. Operating losses
of $312,000 for 1992 are expected to grow to
profits of $239,000 in 1993. the types of business
that will be targeted to buy the airtime include
food stores and car dealerships. These two types
of business account for over one-half of the
markets retail sales. Spots on the station will be
priced at $605/30 seconds and $302/15 seconds
for the morning drive time.

Executive Summary
The marketing plan proposes the development of
a radio station as a Spanish language competitor
in Phoenix Arizona, radio market. It will be
licensed to paradise Valley, located in the city of
Phoenix. The station, as a class A facility, will
have a signal strength of 3kW from an antenna
height of 328ft.
Facilities for KGEN will cost $450,000 for
technical, studio, and office facilities. An
additional $35,00 will be needed for legal and
engineering services required to obtain the FCC
license.

Statement of the Problem


Is it Feasible for KGEN to create a
new Spanish radio station?

Areas of Consideration
Strengths
Competitive facilities investment
Spanish Language Program
Weaknesses
High Cost of Expense
Slow revenue generation

Areas of Consideration
Opportunities
Local commercial share in Phoenix (3%)
They will be the first FM station which will be
featuring the Spanish Language in Phoenix.
Attracting investors for on air advertisement
Threats
Competitors AM (11 Stations )
Market of Listeners Interest

Alternative Courses of
Action
1 - Developed interesting and unique programs
which will be unique from Spanish and English AM
stations.
2 - Widen their target market program market for
Promotional Events.

Analysis
1 - Developed interesting and unique programs
Advantages:
Attract more listeners
Create a new trademark for the station
Disadvantages:
Requires more analysis with the target
market
Risky

Analysis
2 - Widen their target market program market for
Promotional Events to the younger portion of the
market.
Advantage:
They could increase awareness with the
locals of wider age range.
Disadvantage:
Cost

Plan of Action

Conclusion
We therefore conclude that expanding the public
services for promotion to the education section is
needed for the to be more successful and
effective. This will attract young ages who are
more important as they will continue to bring the
language with them.