The Fashion Channel Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

The Fashion Channel is a successful and widely spread cable TV network in the USA, which provides its services 24/7 throughout the year. TCF was founded in 1996 and it seeks a significant growth in terms of revenue and it is expecting to generate 310.6 million dollar revenue in the year 2006 with a targeted profit of 230 million dollars.

the fashion channel case solution

The channel is famous for its fashion dedicated programmers and its main audience is women between age ranges of 35-54 years. The Fashion channel is the market leader in fashion related programs.

Problem Identification

In 2006,the Fashion Channel realized that some of the other channels like CNN and Lifetime were following the techniques and processes of The Fashion Channel and also they were broadcasting the programs related to the fashion world,. These programs were becoming more popular as compared to the programs of TFC.

These channels are giving tough competition to The Fashion Channel directly by taking the share of its ad revenue by capturing more advertisers and these channels also have brand recognition, which creates competition in the market.

Interpretation of the Consumer & Market Data

There are about 110 million households in the USA with cable network and The Fashion Channel’s average rating is about 1.0, which means that on average 1,100,000 people are watching TFC at any point in time. Advertising slots were divided in two slots i.e. of 30 seconds and 60 seconds and normally six minutes of national ad time in each half hour of programming, 24 hours per day for a total of 2,016 minutes per week. The Fashion Channel is the only channel in the market, which is dedicated only to fashion 24/7.

The network based ad unit prices are based upon various factors, which advertisers monitor including the number of viewers, the audience’s characteristics i.e. Age, demographics, and lifestyle, and targeted customers and mix. Prices are expressed as CPM (cost per thousand), which represented the price that an advertiser would pay for an advertisement and it is expected that each advertiser will pay 2 dollars for an advertisement.

The Fashion Channel’s targeted segment is women and it appeals to women between the ages of 35 and 54.The Fashion Channel is included in the basic cable package that is in approximately 80 million households.It is a unique market in which The Fashion Channel has achieved about full penetration of available households.

In comparison with CNN and Lifetime, The Fashion Channel is currently facing a problem with respect to the consumer demographics. CNN achieved the best percentage of the male audience at 45%, while The Fashion Channel achieved 39 % and the Lifetime captured the high estpercentage of the 18-34 female audience at 43%whereas,The Fashion Channel captured only 33% of this segment.

The interest of the consumers regarding fashion and the awareness and perceived value of the Fashion Channel is also low as compared to the other two competitors, which affects the advertising revenue of The Fashion Channel.

This could be due to the programming in a very specific niche market. Regardless of their market, it is expected that the ad buyers are more interested in buying ratings and demographics. Therefore, if The Fashion Channel wants to increase advertising revenue, it must find a way to penetrate the certain premium CPM groups.

The Possible Segmenting Options

In order to analyze the current strategies and current market position, The Fashion Company decided to conduct a research and for this purpose it hired a company, which would perform the market research and the name of the company is GFE associates.

The researchers conducted a questionnaire program for this purpose and they asked questions from customers.They asked more than 100 questions about their behavior towards fashion and TFC in order to understand the needs that The Fashion Channel required. On the basis of this questionnaire, there searcher company then formed the profiles for different typed of consumers who have common behaviors about the fashion and also have the same needs.

After conducting the research and questionnaire, the researcher company analyzed four different groups of viewers such as the Fashionistas, the Planners &Shoppers, Situationa lists, and the Basics. According to the results of the survey performed by the research company, three proposals were proposed in front of the CEO and then they tried to find out the most suitable option out of these three.........................

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