The Fashion Channel have been recently facing a variety of problems regarding their performance in the market. New competitors introduced innovative strategies that focused new segments of the market. For this reason the Fashion Channel hired a new vice president of marketing so as to implement a new marketing strategy so as to strengthen the company’s competitive position. However, the advertising, promotion, and public relations campaign is rather expensive. In the case are presented different exhibits in which the market situation, customer’s preferences, and peculiarities. These will be analyzed in the case report to provide an understanding of the company’s current situation, the alternatives that it has at the moment so as to achieve their goal, and the possible alternative solutions.
Regarding the data from exhibit 1 of the case, the viewer demographics and competitor comparison it can be said that The Fashion Channel presents significant advantages over their competitors; nevertheless, several categories of our target customers does not watch the channel as much as desired. First, the total amount of male TV viewers represents 49% of the population viewing television. Watching The Fashion Channel are only 39%, which is 10% lower than the total amount of male viewers, from which can be inferred that the fashion channel lacks information of vast relevance to the male auditory. Compared to our main competitors, Lifetime: Fashion Today, and CNN: Fashion Tonight, our digits regarding the male auditory are positive and negative. Positive if compared to the Fashion Today, as it can be observed in the exhibit that only 37% of the male auditory watches their channel. On the other hand, Fashion Tonight has showed a result of 45% of male viewers watching their channel, which is quite surprising, as almost half of their viewers are males. Second, the total amount of female TV viewers forms 51% of the total TV viewers. Our channel, The Fashion Channel, has 61% of its observers being women, which is our main customer, and our highest priority, as the majority of the income that we receive is generated by the same. Nevertheless, Fashion Today exceeds in percentage the amount of female viewers, being of 64%, which infers that the company is, as well as we, more focused on the female auditory in first place. On the other hand, 55% of the Fashion Tonight viewers are females, from which can be concluded that the Fashion Tonight channel does not possess a gender segmentation, focusing their attention to both of their genders almost equally. Third, the percent of viewers watching the television from 18-34 years conforms 30% of the total TV viewers. 33% of the Fashion Channel’s viewers are part of this category, which does not significantly differ. However, the Fashion Today channel possesses a percentage of 43 in this category. Almost half of their viewers a persons among 18-34 years old, which reveals that fact that the information provided in their channel is mainly of interest to these population, a rather young segment. On the other hand, Fashion Tonight has a percentage of 27% in this category, which does not significantly differ from the percentage of our channel. Fourth, a percentage of 45% of viewers that watch our channel have between 35 -54 years old, conforming almost half of our viewers. Fashion Today has a figure of 42% on this category, and Fashion Tonight 40%. from the percentage on this category of customers it can be inferred that the three channels are have the higher percentage of viewers in this segment. Thus, the information presented in fashion channels are mainly of interest for women around 25-54 years old. Fifth, the population among 54-74 years old conforms 21% of the total amount of TV viewers. A figure of 20% of people between 54-74 watches our channel, while only a 14% of the same watch Fashion Today, and 26% watch Fashion Tonight. These figures reveal that the channel that focuses their attention the most on the elder population is Fashion Tonight, and the channel that does not significantly focuses it is Fashion today. Finally, the income over $100,000 generated by the all TV Viewers is of 16%. Our channel generates a figure of 18%, while Fashion Today possesses a 19%, and Fashion Tonight 17%. the percentages does not significantly differ; however, from them can be deduced that the majority of the income is generated by the women population among 18-54 years old, as the greatest percentage was achieved by Fashion Today, who significantly focuses on this segment of the population. On the contrary, the lowest percentage was achieved by the Fashion Tonight channel, which focuses the male and female auditory almost equally, and gives the younger and elder population an equal amount of importance. Regarding the average ratings, the three channels significantly differ. Whereas our channel possesses a rating of 1.0, Fashion Today has 3.0, and Fashion Tonight 4.4M. In other words, 1.1 millions of people are watching our channel constantly, while 3.3 millions watch Fashion today, and 4.4 millions are watching Fashion Tonight. From this results can be deduced that the population watching fashion channels and programs have a high interest in celebrities, as the only channel presenting information about these is Fashion Tonight. Nevertheless, the information presented in their program also includes fashion news. On the other hand, our channel lacks information about celebrities, which significantly impacts our results. The results from the Exhibit 2, provide a more detailed information on the preferences of the cable subscribers. The most relevant information in this exhibit is the following. First, 25% of the customers strongly agreed that watching fashion programs on television is very entertaining, which is the highest percent in this category “strongly agreed”. Nevertheless, more than the half of the population disagreed with the fact that fashion is more interesting than many things on television. Only 9% of the customers strongly agreed that TFC is the best place on television for fashion information, 21% agreed, and 28% somewhat agreed. On the other hand 20% somewhat agreed, 12% disagree and 10% strongly disagree. From this percentages can be deduced that the the majority of the TV cable consumers agree at a certain degree that TFC is the best place on television for fashion, which reveals the strong position of the company in the market; nevertheless, 42% of people disagreeing is a high percentage, and in order to change the mentality of this customers the channel should change or implement several programs and things. Furthermore, the great majority of the customers that took participation in the survey revealed that they shop around to find the best value on clothes, rather than shopping just for fashionable purposes. The results from the Exhibit 3 provided on the case, shows the attitudinal clusters in U.S television households for the Fashion Channel. A cluster of 15% of the viewers of the channel are fashionistas, people who are highly engaged in fashion, with a 140 viewer index, 61% from which are females. These watch the fashion channel in order to anticipate trends and stay up to date, in other words, for professional purposes. 35% are planners and shippers. These participate in fashion on a regular basis, with an average of interest in fashion on TV of 110. 53% of these are females, who watch the channel to stay up to date, and due to the fact that they believe that fashion is practical, and they enjoy shopping. 30% are situationalists, people who only participate in fashion for certain, specific needs, half of them are women, half men, mainly around 18-34 years old, and the attitude drivers include enjoying shopping for specific needs only. The remaining 20% of the clusters are basics, people who are totally disengaged from fashion, with an interest index of 50, more of the half (55%) of whom are males, and do not enjoy shopping at all, nor they think about it. From this numbers, percentages, and indexes can be induced that most of the television viewers of the fashion channel are planners and shoppers, and situationalists. In order to increase the company’s income and rating, more focus on this two categories should be realized; hence, the programming of the channel should be more orientated in the attitude drivers of these two categories.
The first scenario proposed by Wheeler is a multi-segment approach that focuses more on Fashionistas. In order to make possible these scenario, it is necessary to invest in new programming to attract and retain the interest of this segment, thus spending additionally $15 million per year on programming, by doing so, the strategy could deliver a rating of 0.8. The second scenario focuses the women segment, aged between 18-24 years old, belonging to the clusters of Fashionistas, Planners & Shoppers, and Situationalists. In order to effectuate these scenario it is required to heavily invest in a marketing and advertising campaign. By doing so, the ratings could boost on 20%. . The third scenario targets two segments – the Fashionistas and the Shoppers/ Planners. The estimations are that it would drive average ratings over time to 1.2. nevertheless, an additional $20 million on programming would be required to be spent. The main pro of the first scenario segmentation is that it focuses only on one group. By doing this, the Fashion Channel has the possibility to make the channel much more specific, directing the attention to the preferences of the Fashionistas in first place. It would allow the channel to gain popularity among the same, who are the second most influential group in the market. Moreover, the spending on a marketing campaign under this scenario is the lowest of them all. Nevertheless, the cons are that the scenario only focuses on one segment, which could provoke a significant lose in viewers belonging to the other segments. Second, the pros of the second scenario are that it focuses on the main clusters that were defined. By doing so, the channel will be appreciated by 80% of the fashion channel viewers. In addition rating increment on 20% is to be expected. However, the cons of this scenario are the high amount of money that should be spent on investments, as the channel will heavily focus their attention on three clusters simultaneously. Third, the pros of the third scenario is the focus of only on two clusters, who have similar attitude drivers, which would significantly simplify the programming of the channel. Moreover, as estimated, the ratings are to reach 1.2 on average after a certain period of time. Nevertheless, as in the 2nd scenario, it would be significantly costly to effectuate so, as the amount of money required is of $20 millions.
As Dana Wheeler, the final recommendation that I would make for the Fashion Channel would be: to focus on the female auditory most of all, as their main competitor, Fashion Today, is doing, who possess a higher income over $100 000 rate due to this reason. Moreover, I would recommend the company take into consideration the attitude drivers of the segmentation that would be picked while developing the channel’s programming, so as to encompass the majority of the viewers of this segment, and thoroughly satisfy them. Finally, it is of vast importance for the company to include in their programming facts about celebrities, as one of their main competitors, the Fashion Tonight, obtained the higher average rating for this exact reason.
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