MKTG632: Fashion Channel Case Study - Consumer Data Analysis

This case study analyzes the Fashion Channel (TCF), focusing on interpreting consumer and market data to optimize its marketing strategy. The channel has a significant female viewership, with the 35-54 age group being the largest segment. The case presents three scenarios: maintaining the current strategy, focusing on fashionistas, and targeting shoppers, planners, and fashionistas. Based on the analysis of ad revenue and financial calculators, the third scenario, which targets shoppers, planners and fashionistas, is the most financially beneficial, leading to the highest net income and margin. The analysis considers the advantages and disadvantages of each approach, recommending the third scenario for long-term investment and minimal risk. The case study provides detailed financial data, including ad revenue calculations and financial projections, supporting the recommendation for strategic changes to maximize profitability and market share.

FASHION CHANNEL CASE STUDY
Alaa Alghamdi
Ester Hoxah
MKTG632

Interpretation of consumer and market data
In the recent years, TCF has experienced growth through which it can maintain its greater market
share. The business growth will provide TCF with the necessary competitive edge and the
company will be able to acquire more market share than its competitors will. The fact that it
concentrates with fashion the whole day makes it outstanding channels among its competitors.
This way, it can maintain its followers and at the same time acquire new followers. Notably,
female followers consist of 61% and 39% of men, age 35 to 54 take the highest percentage as
they are composed of 45% of the total number. Therefore, the segment is the highest, and it is the
responsibility of the channel to strengthen its relationship with this particular segment. Success
of the business organizations largely depends on maintaining good relationships with customers
of major segments. The reason is that customers are the major source of revenues for the
companies.
In this situation, it needs to be mentioned that the major segment of the customers include
different types of people and professionals. Notably, fashionistas appeared to be a most
interesting cluster as the represented 15% of the viewers. Shoppers and planners also appeared to
have a bigger percentage because they participate in many fashion shows. Having analyzed the
two clusters, it is evident that women at the age of 18 and 35 dominate the sector. Thus, it can be
said that women between the age group from 18 to 35 watches the fashion programs. On the
other hand, situationists did not appear to have much influence as they participate as a result of
specific needs. Hence, it is clear that out of needs, the situationists appeared in the programs.
Dana presents three scenarios with the first suggesting pursuing the current strategy while mainly
targeting women of between 18 and 34 years including shoppers and planners, and fashionistas
and situationists. The second case is a narrower approach focused on fashionistas only while the
third targets shoppers and planners and fashionistas. Based on the Ad Revenue calculator, the
third option produces highest Ad revenue, followed by the second and the first one in that order.
The financial calculator shows that the third outcome although with highest expenses gives the
highest net income.
Factual analysis of the segmentation options and the associated pros and cons
The approach focuses on the easy way with minimal resistance. In this case, TFC would have to
ignore its competitors leading to a short-term advantage.
Advantages
· The major advantage is minimum amount of expenses and and low programming cost. This is
an ideal situation for the companies as the company will be able to generate more revenues by
minimizing the cost and expenses.
· The second major advantage is the reduced number of risks and less resistance. Companies
are able to operate freely in the business environments that consist of lower amount of risks.
Disadvantages
· The major disadvantage is the low market share. Low market share indicates that the
particular company is well behind its competitors in terms of market share.

· The next disadvantage is the lack of customized services and minimized revenue. It is
necessary for the companies to provide customized services to their customers in order to retain
them.
Focused Approach
It leads to change in strategy aimed at fashionista’s only. This way, a market niche is easily
established.
Advantages
· The only advantage is the high concentration on market niche as well as the chosen segment
and medium cost. It will provide major advantages.
Disadvantages
· The only disadvantage is the loose of loyal audiences, resistance, and decreased ratings.
Two segment approach
It focuses on two segments through which strategic changes are to be made, this way, TFC will
focus on its mission Advantages
· The major advantage is higher revenues and ratings. These will provide major benefits for the
company.
· The next advantage is fewer risk and minimal changes. Less amount of risks helps to increase
the profitability of the company.
Disadvantages
· The major disadvantage is the high programming cost and increased general cost.
Recommendation
Based on the advantages and disadvantages of each approach, the third scenario presents the
most appropriate for the channel. This strategy is the best because it is applicable for long-term
investments in such a way that it offers the highest income. Similarly, the company can easily
segment under minimal risks. It also faces the least resistance since it involves a slow change.

Targeted outcome in the three scenarios
Ad Revenue Calculator
Current 2007 Base First
Scenario
Second
Scenario
Third
Scenario
TV HH 110,000,000 110,000,00
0
110,000,000 110,000,000 110,000,000
Average
Viewing
(Thousands)
1100 1100 1320 880 1320
Average Rating
(%)
1.0 1.0 1.2 0.8 1.2
Average CPM($) 2.00 1.80 1.80 3.50 2.50
Ad Revenue Ad
Minute ($)
2,200 1,980 2,376 3,080 3,300
Ad Minutes
Week
2016 2016 2016 2016 2016
Week Year 52 52 52 52 52
Ad Revenue
Year
$230,630,400 207,567,36
0
249,080,832 322,882,560 345,945,600
Incremental
Programming
Expense
- - - 15,000,000.00 20,000,000.000
Financial Calculator
2006 Actual 2007 Base First
Scenario
Second
Scenario
Third
Scenario
Revenues
Affiliate
Fees
$80,000,000 $81,600,000 $81,600,000 $81,600,000 $81,600,000

Ad Sales $230,630,40
0
$207,567,36
0
$249,080,832 $322,882,560 $345,945,600
Total
Revenue
$310,630,40
0
$289,167,36
0
$330,680,832 $404,482,560 $427,545,600
Expenses
Operational
costs
$70,000,000 $72,100,000 $72,100,000 $72,100,000 $72,100,000
Programmin
g Expense
$55,000,000 $55,000,000 $55,000,000 $70,000,000.0
0
$
75,000,000.00
Commission
s on Ad sales
$6,918,912 $
6,227,020.80
$
7,472,424.96
$ 9,686,476.80 $
10,378,368.00
Advertising
& Marketing
$45,000,000 $45,000,000 $
60,000,000.00
$
60,000,000.00
$
60,000,000.00
SGA $40,000,000 $41,200,000 $41,200,000 $41,200,000 $41,200,000
Total $216,918,91
2
$219,527,02
1
$235,772,425 $252,986,477 $258,678,368
Income Net $93,711,488 $69,640,339 $94,908,407 $151,496,083 $168,867,232
Margin 30% 24% 29% 37% 39%