Fashion Channel Case

Dana Wheeler, Senior Vice President of marketing for the Fashion Channel is reviewing a new marketing segmentation and positioning strategy. The Fashion Channel Company needs to strengthen its competitive position and is willing to spend an estimated $60 Million on advertising, promotion, and public relations in 2007. TFC’s main focus has been solely on fashion which is broadcast all hours of the day 7 days a week. This channel reaches close to 80 million viewers in US households with their main demographic being women between 35 and 54 years of age. By 2006 after 10 years on the air TFC feared that a change needed to be made with the growing number of competing networks. To face this challenge TFC’s plan was to drop the unit price of advertising by 10% in 2007 to counter act the decline in the channels performance. Lifetime and CNN have been targeting fashion-specific programs with much success in the recent years increasing the competition. Without lowering the price success would entail targeting the right viewers and offering the advertising companies a range of prospective viewers out of the 110 million households with televisions with subscriptions to cable 1,100,000 people on average were watching their TV at any point in time. Every half an hour there was 6 minutes of ad time totaling an estimated $20 billion in 2006 in buying spots on cable networks. By increasing the number of highly valued viewers this network could successfully grow in the revenues made from advertising. However, by increasing the number of highly valued viewers this network could successfully grow in the revenues made from advertising and not have to drop the price. TFC was a basic channel and able to reach most cable customers automatically as they signed up for cable. This was another source of revenue that averaged $1 per cable subscriber a year with an estimate totaling $80 million in revenues. With a target going in to the next year, Wheeler knew she must increase viewership and

Cited: Stahl, Windy."The Fashion Channel: Market Segment." June 2007: Harvard Business Publish. 10 November 2007 .