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1- Do a structured and detailed analyse of the situation in front of Dana

Wheeler.
The Fashion Channel was a successful cable TV Network- and the only network
solely dedicated to fashion, with up-to-date and entertaining features and
information broadcast 24 hours per day, 7 days per week. It didnt target any
specific audience segment and was broadcasted to appeal to as broad an
audience as possible.
In 2006, other networks took note of TFC success and started adding fashion
related programs in their line-up - two networks Lifetime and CNN added fashion
related blocks to their programming and this started to impact the revenues and
viewership of TFC. Therefore, TFC now had to compete with the fashion specific
programming networks and also the other networks for ad buyers. This situation
prompted Jared Thomas the CEO of The Fashion Channel to rethink his approach
to marketing. Dana Wheeler joined TFC in July 2006 as VP- marketing for TFC.
Currently TFCs revenue is coming from mainly two resources;
1) Ad Buyers
2) Cable Affiliate Fees
Situation in front of Dana Wheeler are;
1- Prepare and recommendations of TFCs new Segmentation and
Positioning strategy scheduled next week.
2- Strengthen competitive position (spending $60 million)
3- How to attract new customers with new marketing and advertising
approaches
4- Focusing on revenue stream for TFC when presenting to CEO Jared Thomas
at senior management meeting
5- How to improve channel ratings compared to competitors
From the market analysis done by Alpha Research on customer
satisfaction indicated that even though TFC was above averages it was
lagging behind the two networks that offered competitive fashion
programming on the various metrics such as Consumer Interest in
Viewing, Awareness and Perceived Value
6- How to increase charges from Ad buyers by improving market position

Strengths
1. 33% increase in investments
2. The only network solicited to
fashion with 24x 7 broadcast
3. Reached 80M households
4. Have good market data to
target right segments for
revenue growth

Opportunities
1. Huge market potential with
110M viewers
2. Consumer advertisers spent
almost $20B for buying cable

Weakness
1. No proper market
segmentation, branding or
positioning strategy
2. Lower ratings on consumer
rating index and perceived
value index, both indices of TFC
are lower than its competitors
CNN and Lifestyle

Threats
1. Tough competition from
competitors - CNN and lifestyle
2. Risk of losing its distribution
support

networks.
3. Increased rating will help to
increase the price from 25% to
75%
4. Core group willing to become
very loyal to TFC network

3. CNN and Lifetime adding new


fashion programs increasing the
viewership

Financial and rating Analysis

SPACE for KRISHNA

Q.2. Describe the basis of segmentation and variables used in the case. Also
assess the appropriateness of the segmentation approach.
ANS
The GFE Associates reports suggested four unique groups of viewers:
Fashionistas, Planners and Shoppers, Situationalists, and Basics. These segments
varied in size, and the smallest of the four, i.e. the Fashionistas had a high
degree of interest in fashion.

The four segments were:


Fashionistas (15%): These are the people who are highly engaged in
fashion and have significantly higher than average interest in fashion
content on TV. They like to stay updated, enjoy shopping, develop
expertise in fashion and believe that fashion is entertaining. This group
contains a majority of female population (61%) and people between the
ages of 18 and 34 (54%).
Planners and Shoppers (35%): These are people who participate in fashion
regularly, stay up to date, enjoy shopping and think that fashion is
practical. They are interested in value of products. This group contains
almost equal number of males and females and only a quarter of people
are between the ages of 18 and 34.
Situationalists (30%): These people participate in fashion for specific
needs, shops for specific needs and thinks fashion is both entertaining and
practical. They are interested in value of products. This group contains
equal number of males and females and very few people are between the
ages of 18 and 34 (30%).
Basics (20%): They are not interested in fashion, do not enjoy shopping
and are interested in value. Majority of this group is comprised of males.
The basis for the segmentation is as follows:

1) Demographics:
(i)
Gender: The major segments are dominated only by females,
only Basics had male population
(ii)
Age: The segments were dominated by females in the age
group of 18-34
(iii) Income: The Fashionistas had income above $100K
2) Psychographics:
(i)
Innovators: The Fashionistas were the innovators, who were
ready to try new trends and always kept up-to-date with the
latest fashion.
(ii)
Early adopters: Planners and Shoppers stayed up to date
with the fashion and were the early adopters of any new
fashion trend.
(iii) Early majority: Situationalists tend to deliberate on the
adoption of a new trend and constituted the early majority.
(iv) Laggards: Basics formed the laggards who were disengaged
and did not spend time waiting for a new product or trend.
3) Behaviouristic:
(i)
Purchase occasion: Fashionistas were frequent buyers whereas
Basics shopped on random occasions only.

Fashionistas

Situationalist
s
Yes

Basics

Yes

Planners &
Shoppers
Yes

Measurable

There is an
overlap in all
the segments
Yes

There is an
overlap with
the segments
Yes

There is an
overlap with
the segments
Yes

There is an
overlap with
the segments
Yes

Substantial

No

Yes

Yes

No

Reachable

Yes

Yes

Yes

Yes

Responsive

No

Yes

Maybe

No

Growing

Yes

Yes

Yes

No

Compatible

Yes

Yes

Yes

No

Actionable

Yes

Yes

Yes

No

Homogeneou
s
Heterogeneo
us

Yes