The Fashion Channel
Executive Summary
The Fashion Channel (TFC) grew into a cable TV network that ran 24 hours a
day for, 7 days a week that offered the latest fashion trends through various
shows and updates to 80 million US households that either subscribed to
cable or satellite TV. From its beginning in 1996, started by two
entrepreneurs, it has known success. TFC pro+ts grew from their most avid
viewers who were women between the ages of 35 and 54 years, but TFC
wanted their marketing messages to appeal to as many as it could to
increase viewership. Never before had TFC focused on one particular
demographic, branding, or positioning to market their channel, but as times
were changing and competition (including CNN and Lifetime) increased they
needed a new course of action.
TFC had seen the need to hire someone experienced in marketing and brand
building to ensure their continued growth. For this job they hired Dana
Wheeler who had a wealth of knowledge in marketing and advertising. As
Wheeler stepped into her role she faced many possible challenges as she
created an action plan to present to the leadership team of TFC. Her possible
solutions to TFC competition and need for continued growth were targeting
the right viewers and offering advertisers an attractive mix of viewers
compared to the competition. This included possibly raising cable a6liate
fees, boosting customer satisfaction, and focusing on attitudinal clusters
based on research finding. Attitudinal research finding were able to take a
closer look into consumers and to review their attitudes towards fashion.
They were broken down into four groups Fashionistas, Planners & Shoppers,
Situationalists, and Basics. Targeting the Fashionistas and Planners &
Shoppers appeared to have the most potential for an increase in revenue.
Ultimately, Wheeler knew that her recommendations to TFC would have to
demonstrate revenue growth and spell out all risks and their associated
costs. This plan would focus on increased viewership, increased advertising
rates, and marketing to a more specific demographic.
The Market Plan
Market Analysis:
The Fashion Channel (TFC) has competed in the cable TV network market
since 1996; to date, TFC is the only network solely dedicated to fashion
(Stahl, 2007). The network also operates as one of the most widely available
niche networks; the channel reaches 80 million viewers through cable and
satellite distributors. Success in this industry is based on cable/satellite
network distribution and advertising sales. Both distribution and ad sales are
contingent upon channel viewership. In 2006 consumer advertisers spent
almost $20 billion on buying cable TV spots on various networks. Networks
were able to base advertising prices on their ability to deliver specific target
groups. The groups that advertisers were willing to pay a premium for were
men of all ages, and women aged 18-34.
In 2006, there were a total of 110 million households with television in the
United States; 70 million of those households were cable subscribers (Stahl,
2007). TFC was distributed on average to 1.1 million homes; as compared to
competitors Lifetime: Fashion Today segment in 3.3 million homes and CNN:
Fashion Tonight segment in 4.4 million homes (see Exhibit 1). TFC’s
viewership in the following demographic categories was approximately 39%
for the male viewership and 33% for the 18-34 in age viewership. TFC
competitor Lifetime had 37% male viewership and 43% age 18-34
viewership; CNN had 45% male viewership and 27% age 18-24 viewership
(Exhibit 1).
Potential areas of growth for TFC are contingent upon it’s ability to attract
more viewership (increasing the number of average households the network
is viewed), particularly from the market segments that are most attractive to
advertisers (men of all ages and women aged 18-34).
Situation Analysis
5 C’s
Company:
As The Fashion Channel moves forward they will have to embrace an open
mind and seek out ways to differentiate themselves from their competition to
regain their position as a top fashion channel. As they get to know their
viewers better, they will not have to depend on one specific segment of the
market to keep them going and their investments will not go wasted on
uninterested audiences. Greater R&D will further educate them on their
viewers’ needs and wants, so they are better able to gain advertisers
supporting their network. As they gain advertisers, this not only increases
their opportunities of revenue, but it also allows them remain competitive
with their advertising rates among other channels. As technology increases,
TFC sees the ‘one size +ts all’ approach may have gotten them where they
are, but it will not continue to keep them at the top. As customer have more
options with how they view their favorite shows, some moving away from
cable/satellite, TFC will have to prove they are willing to stay in the fashion
game above their competitors.
Customer:
TFC essentially had 3 different customer that could provide revenue and/or
be affected by the marketing plan:
1. The advertiser– TFC was on target to generate $230.6 in 2006 from
advertising alone. This was their highest source of revenue but not
necessarily their most “vital” customer in terms of marketing. In order
to attract more ad dollars, TFC needs two things 1. Higher ratings 2.
More viewers of a certain segment (fashionistas and planners)
2. Fashionistas and Planners- IF TFC could target more of these segments
then viewership would exceed potentially taking market share from
competitors and increase the ratings. An increase in ratings could
again attract more advertisers and increase overall cable a6liate fees.
Based on the reading, this costumer seemed to be the main focus of
the marketing plan because increasing this type of customer will
increase leverage with TFC’s alternate customers (advertisers and
MSO’s).
3. MSO ( Cable a6liates)- Another revenue stream for TFC were cable
a6liate fees. If ratings or viewership decreased too much then an MSO
could choose to drop the network, something that could be detrimental
to targeting those specific segments. The MSO is the medium so it’s
very important to keep this customer happy.
Collaborators:
Collaborators in a market plan are strategic to reaching marketing goals,
specifically revenue goals. In order for TFC to understand their market and
properly segment their target audience, they required collaboration with
market research companies, like Alpha and GFE Associates. These
collaborators provided TFC with vital information such as customer
satisfaction with cable a6liates, consumer field studies and attitudinal
research +ndings. In addition, TFC utilized specific Nielsen report finding
and viewership information in order to elaborate on the the finding of GFE
and make the information more robust.
Another vital collaboration for TFC is within it’s own departments. In order to
target more viewers and increase each different customer base, Wheeler
secured a collaborative relationship with Norm Frazier in the advertising
sales department. Each executive had similar goals related to increasing
viewership and ratings in order to increase ad revenues.
Context:
The context or macro trends of TFC were in their favor due to increasing
economic growth and more disposable income in dual income households.
This advantage was also based on new fashion cultures and trends as well as
women gaining more confidence in fashion diversity and style. As technology
increased, TFC had more access to information and collaborations but also
more competition. Competitors could develop similar programming for less
money and viewership became easier to access through User Interface
devices in homes. The context of viewership changes as well, TFC still had
market share with females 35-54 the competitors were utilizing new trends
and skewing younger female viewers in the 18-34 range.
Competitors (Competitive Analysis):
TFC’s main competitors were two other networks with fashion content on
during certain times of the day: CNN: Fashion Tonight on Monday-Friday 8-
9pm, Saturday-Sunday 10-11pm and Lifetime: Fashion Today Monday– Friday
9-11pm. CNN offered “Fashion news and features with celebrity focus
available” and Lifetime offered “Fashion news and information”. Although
this content was attracting some of the younger female viewers, TFC still had
several competitive advantages: they were the only network that ran fashion
news, features and information 24 hours a day, 7 days a week and their main
demo, Women 35-54, were loyal, knowledgeable of the TFC brand and had
