The fashion channel currently lacks branding, positioning strategy, and detailed segmentation. It faces competition from CNN: Fashion Tonight and Lifetime: Fashion Today. An analysis showed TFC has the lowest awareness and perceived value compared to its competitors. TFC generates most revenue from advertising sales, followed by affiliate fees. Several scenarios were presented to improve TFC's performance, including broadening its appeal but risking competition and lower rates, targeting "Fashionistas" but adding costs and potentially losing contracts, or targeting multiple segments but adding more costs and risking decreased loyalty. The document recommends TFC improve its segmentation, positioning, and programming to better compete.

1. The fashion channel case

3. no branding
no positioning strategy
no detailed segmentation

4. CNN: fashion Tonight
Lifetime: fashion Today
The fashion channelMain competitors

5. TFC CNN Life me
Interest in viewing 3,8 4,3 4,5
Awareness 4,1 4,1 4,5
Perceived Value 3,7 4,6 4,4
Alpha research study on customer sa sfac on with cable networks
Respondents were asked to rank on a scale of 1-5
5= Most/Very/High;
4= Somewhat;
3 =Neutral/neither high nor low;
2= Not much;
1= Lowest/not at all)

11. Affiliate Fees $80 million
The fashion channelSources of Revenue
Advertising Sales $230 million

12. clusters

13. 2006 Actual 2007 Base Scenario 1 Scenario 2 Scenario 3
Ad Sales $230 630 400 $207 567 360 $249 080 832 $322 882 560 $345 945 600
Affiliate Fees $80 000 000 $81 600 000 $81 600 000 $81 600 000 $81 600 000
Total Revenue $310 630 400 $289 167 360 $330 680 832 $404 482 560 $427 545 600
Cost of Opera ons $70 000 000 $72 100 000 $72 100 000 $72 100 000 $72 100 000
Cost of
Programming
$55 000 000 $55 000 000 $55 000 000 $70 000 000 $75 000 000
Ad Sales
Commissions
$6 918 912 $6 227 021 $7 472 425 $9 686 477 $10 378 368
Marke ng &
Adver sing
$45 000 000 $60 000 000 $60 000 000 $60 000 000 $60 000 000
SGA $40 000 000 $41 200 000 $41 200 000 $41 200 000 $41 200 000
Total Expense $216 918 912 $234 527 021 $235 772 425 $252 986 477 $258 678 368
Net Income $93 711 488 $54 640 339 $94 908 407 $151 496 083 $168 867 232
Margin 30% 19% 29% 37% 39%
Revenue
Expenses
TFC Estimated Financials

14. The fashion channelScenario 1
BROAD APPEAL

15. The fashion channelpluses
All segment includes female 18 – 34
Awareness and viewing deliver
a rating boost of 20%
No incremental programming expense
Rating increase 20%

16. The fashion channelminuses
The risk of higher expansion of competition
Not targeting a specific cluster of segment
CPM decrease 10%

17. The fashion channelScenario 2
Fashionistas

18. The fashion channelpluses
CPM Increase 75% to $3,50
Focusing on female between
the age of 18 -34 (Premium age)
Strengthen the value of the audience

19. The fashion channelminuses
Add new programming $15mln additional coast
Higher risks to lose contracts
with cable operators due to decrease
rating from 1% to 0,8%
Targeting small percentage of HH only 15%

20. The fashion channelScenario 3
Fashionistas,
Planners & Shoppers

21. The fashion channelpluses
CPM Increase to $2,50
Targeting 50% of TV HH,
of which 50% female and 25%
of them are 18-34 age
TV Rating increase to 1.2

22. The fashion channelminuses
Add new programming $20mln additional coast
Could decrease rating in the long-run
Might decrease loyal customers
if they are not included in these segments

23. Recommendations