Marketing Management

The Fashion Channel

Team
QUICQUID CAPIT
26 September 2018

Amaranita 29318015
Akita Arum Verselita 29318054
Daniel M. H. Simanjuntak 29318075
Eugenie Febby 29318074
Johanes P. Hutagalung 29318048
 The Fashion Channel

About The Fashion Channel (TFC)

 Dana Wheeler is the senior vice president of marketing for TFC
 TFC wants to get recommendations for TFC’s new target segmentation and positioning
strategy
 Attracting new customers with new marketing and advertising approaches
 TFC is TV cable network that provide fashion only for 24/7
 Women between 35 and 54 years are the most viewers
 TFC trying to achieve higher viewership
 TFC have competitors like CNN and Lifetime Channel who provide fashion programme.

SWOT Analysis
 Strength
o Wheeler wants to strengthen its competitive position and willing to spend more
than $60 million budget in marketing
o TFC is the only network who provide fashion with up-to-date fashion information
24 hours per week.
o Dana Wheeler had a strong background In marketing for consumer product as
well in advertising industry
 Weakness
o Poor market position compared to competitors, low average in TV rating (Exhibit
1)
o Didn’t have much detailed information about its viewers
o Jared Thommas seems scared to change the marketing strategy that Dana
mentioned
o Marketing message “fashion for everyone” not as popular as the series in 2005
(look great in Saturday night under $100)
  Opportunities
o Finding loyal customer segment
o Ability to increase rating and households rating, and increase rating
o Expand the programming segments (men’s fashion, women’s fashion, week
fashion shows, etc)
 Threats
o Low in TV rating
o Competitors coming up with fashion programming too and steal the viewers

Problems
 TFC should improving competitive position with CNN and Lifetime
 Changing marketing strategies in order to growth in better outcome
 TFC should increase the rating
 Increase revenue from advertising buyer by improving market position strategy

Alternative Actions
 TFC have analysed the viewers into 4 group (exhibit 3).

o According to the exhibit TFC should focus on women especially in age 18-34,
because all cluster contained female so, TFC should focus on 3 cluster,
fashionista, planners &shoppers, and situationalists. Basic cluster have more
male, and the attitude drivers are negative like don’t enjoy shopping, don’t care
 about the outfit, so TFC would not be the best action to include focus on basic
cluster.
 Analysis through financial
Ad revenue Current 2007 base Scenario 1 Scenario 2 Scenario 3
calculator
TV HH 110000000 110000000 110000000 110000000 110000000
Average 1% 1% 0,8% 1,2% 1,4%
rating
Average 1100 1100 880 1320 1540
viewers
(thousand)
Average CPM $2 $1.8 $3.5 $2.5 $3.5
Average $2200 $1980 $3080 $3300 $5390
revenue/ad
minute
Ad 2016 2016 2016 2016 2016
minutes/week
Weeks/year 52 52 52 52 52
Ad $230630400 $207567360 $322882560 $349945600 $565044480
revenue/year
Incremental 0 $15000000 $20000000 $60000000
programming
expense

Financials 2006 actual 2007 base Scenario 1 Scenario 2 Scenario 3

Revenue
Ad sales $230630400 $207567360 $322882560 $345945600 $565044480
Affiliate fees $80000000 $81600000 $81600000 $81600000 $81600000
Total revenue $310630400 $280167360 $404482560 $427545600 $646644480
Expenses
Cost of $70000000 $72100000 $72100000 $72100000 $72100000
operation
Cost of $55000000 $55000000 $70000000 $75000000 $115000000
programming
Ad sales $6918912 $6227021 $9686477 $10378368 $16951334
cmmissions
Marketing & $45000000 $45000000 $60000000 $60000000 $125454545
advertising
SGA $40000000 $41200000 $41200000 $41200000 $41200000
Total expense $216918912 $219527021 $252986477 $258678368 $370705880

Net income $93711488 $69640339 $151496083 $168867232 $275938600

Margin 30% 24% 37% 39% 43%

o Acording to the exhibit scenario 3 is the best because has the largest forcasted
net income
Recommended action:

1. Do not worry with 10% drop of advertising, start penetration in digital media platforms
like Facebook, Twitter, YouTube especially Instagram. Conduct research on digital media
utilization of the audience based on cluster.
2. Be large multi-system operator (MSO). Create special specific channels. For example,
there are basic channel like FOX. But Fox established specified channel with different
programmes, for example: Fox News, Fox Sport, Fox Movies, etc.
To that extend, TFC can create TFC Makeovers, TFC Runway, TFC Gents (for male
audience) and TFC Socialites.
3. TFC Socialites can be very strategic since TFC is trusted by the socialites community
around the world and the audience spend a lot of money on fashion trend. By increasing
the viewership and ratings to the audience among people who would spend (the
socialites), it attracts fashion lines to start investing their business through
advertisement in TFC.
4. Conduct a research regarding to the popular celebrities that have big influence to young
generations. Take contract for them to be the host, guest or do endorsement in their
media social. Younger audience would love to see their favourite celebrities on screen,
5. Engage more with the audience with the company, for example, do social media
competition, meet and greet with the celebs, teens make over. Therefore the try to
build interest to watch TFC and engage with the activities.
Lesson learned

1. TFC do not have to ‘break what is not broken”. Instead, they need to improve and
escalate their game as leading fashion channel, especially on their quality and
diversification on product.
2. Changing on marketing strategy has the risk to lose the current revenue and clients. In
the other hand, improving and diversifying can attract more audience and more
brands/companies to advertise regarding to their market.