TFC_arun_duggal

The Fashion Channel (TFC) is a stand-alone cable channel, which was started in 1996. It known to be the only “fashion only” channel, with fashion related content 24/7. The majority audience for TFC was women aged 35-54. TFC had done well in 2006 with revenue of 310 million, way above their expected revenue. But in 2006 more competitors had popped up on the scene and offered fashion related content. These channels, CNN and Lifetime, were not fashion only channels, but they had segments in their broadcast to compete against TFC. These new competitors were about to take a bite out of TFC adverting revenue. To overcome these lost revenues, TFC needed to either decrease the advertising pricing, or increase the viewership of its channel by increasing the content and quality of its programing.

Dana Wheeler had a decision to make how to market TFC and increase its viewership ratings. TFC had a ration of 1 while CNN and Lifetime had a 3.0 and 4.0 respectively. Also the rating based on consumer score was lower then its competitors, 3.8 vs 4.3 (CNN) and 4.5 (Lifetime.) While these scores are still above the market average, they were still not up the competitors, which caused concern at TFC. Dana Wheeler had decided they needed to segment the market so they could approach the right type of customer.

Option 1:
Focus on Fashionistas, Planners & Shoppers and Situationalists women aged between 18 to 34.
Advantages:
Targeting a more concentrated aged group will help ever so slightly; the ratings will increase from 1.0 to 1.2. With a slight increase in revenue.
Disadvantages:
There really is no change in viewers here, because you are still marketing to all categories. You will still lose market share to the competitor.

Option 2:
Focus on the Fashionistas and spend $15 million on programming.
Advantages:
Fashionistas show the highest interest in fashion and is strong in high valued 18-34 female demographics, which will deliver a ratings boost. With $15 million on