The Fashion Channel

Written Analysis Case

THE FASHION CHANNEL

Testado, Dennis Buyayo

LT 5

The pressing concern of The Fashion Channel (TFC) is to choose its most acceptable marketing target among the three clusters of customers: the broad, multi-segment; the segment that is focused more on the Fashionistas; and the segment of Fashionistas plus the Shoppers/Planners. The process of choosing should be guided by the question “Will the choice that TFC takes secures itself a position as the market leader?” Such question is posed to further guide TFC in regarding highly the improvement of its average rating to the market against the competitive threats of fashion programming of the CNN and Lifetime.

Which segment should TFC choose? Obviously, it is imperative to compare the three segments of customers with great emphasis on examining the highest possible benefit and disadvantage each will bring to the TFC. The most possible basis of comparison to be used is the Tables of the Ad Revenue Calculator (Exhibit 1) and TFC Estimated Financials for 2006 and 2007 (Exhibit 2).

The Ad Revenue Calculator shows that the segment of Fashionistas plus the Shoppers/Planners incurs an incremental programming expense of $20,000,000. It is much expensive compared to the first two segments having zero (0) and $15,000,000 respectively. However, it shows a significant advantage over the first two as regards Ad Revenue. It is $345,945,600 compared to the two having a $249,080,832 and $322,882,560. It has a percentage increase of 7% and 28% over the two respectively. Moreover, it shows a significant advantage on the aspect of Average Rating having a 1.2% compared to 0.8% and 1.2%. These clearly show that as TFC invests on a higher incremental expenses in its Advertising, it will eventually get a higher benefit in the future. It will have a potential higher profit upon choosing the segment of Fashionistas plus the Shoppers/Planners as its target market.

Taking a look at the TFC Estimated Financials for...