REPORT ON THE FASHION CHANNEL

1. How would you interpret the consumer and market data, if you were Dana
Wheeler?

 From the customer and market data, we have analyzed that the female age
groups are between 35 and 54 who are interested in watching the television
programmes represents the 27.45% of viewers from the total households
while the present strategy focuses on females aged between 18 to 34 which
represents 20.13% of viewers lesser to the market data.
 The fashion channel has lesser customer base of 1.1 million households
while the other competitors’ lifetime and CNN have customer base of 3.3
million and 4.4 million respectively.
 It should be noted that the income level of 18 to 34 age groups are lesser
than that of other females.

2. What are the various options available for segmentation? Evaluate the pros
and cons of each.

According to the data, the segment is broadly classified into 3 areas,

 Cross segment (Fashionistas, Planners & Situationalists)

PROS CONS
Increase in net income Poor target marketing
No incremental expenses Less net income

 Fashionistas

PROS
Increase in number of viewers
High CPM of $3.5 which leads to
increase in the Ad sales
CONS
Additional incremental cost of 15
million
Since target is for only 50% of
females which might reduce the
customer base
  Dual Marketing(Fashionistas & planners)

PROS CONS
This market segmentation helps in Since, it’s the first marketing
increasing the net income and margin strategy implemented, it is partially
of the fashion channel. risky.

Helps in increasing the rate of

viewers. This involves higher investment in
advertising and marketing expenses

3. If you were Dana wheeler, what would you recommend and why?

If we are in the position of Dana wheeler, we will go for choosing the

dual market segment consists of Fashionisatas, Shoppers & Planners which
includes both men and women in the market. Then will telecast programmes based
on the customer preferences and wants for building brand loyalty among them.
Will apply strategy of TOMA(Top Of Mind Awareness) concept for building the
good brand image among the customers mind. We strongly believe that all these
things helps in increasing the ad sales and revenue for the channel as well as for
retaining the customers over a long period of time.

4. Dana is trying to bring some change in the organization. How should she
manage the discussion and meeting to be most effective in leading the group
towards the right decision?

The changes Dana wishes to bring in the organization are:

-To increase the programme line of fashion channel for attracting more
number of viewers to watch the channel.

-To focus more on advertising and marketing expenses.

-To make some modifications in STP (segmentation, targeting and

positioning) strategy for capturing the market position among the competitiors.
 -To analyze more on financial data for arriving at a particular decision
on where to spend so that this helps in increasing the revenue of the company.

All the above mentioned things have to be communicated to employees in a

convincing manner. Since the employees play a major key role in an organization’s
effectiveness, Dana should ask each and everyone’s opinions of what resisting
them in accepting the changes in an organization. Then considering all of their
opinions and views, she should suggest her judgments in a strong manner with
some proof or authentic data to make the employees believe and invest themselves
in working towards the plan for the channel.

5. Calculate the ad revenue and financial data to understand the financial

impact of the scenarios.

FINANCIAL DATA AND ANALYSIS:

2007 Base Scenario 1 Scenario 2 Scenario 3
TV HH 110000000 110000000 110000000 110000000
Avg rating 1.0% 1.20% 0.8% 1.2%
Avg viewers 1100 1320 880 1320
(thousand)
Avg CPM $1.8 $1.8 $3.5 $2.5
Avg $1980 $2376 $3080 $3300
revenue/min
Ad 207,567,360 249,080,832 322,882,560 345,945,600
revenue/year
Incremental - - 15 million 20 million
programming
expense

(Ad revenue is calculated by using he formula Average revenue/min*Ad

min/week*No. of weeks/yr.)

In overall, the above data shows that

 In cross market segmentation, there is no clear targeting group which might

does not help in attracting the customers.
  In scenario 2, there is a 0.8% decrease in the market share and also requires
an additional $15 million for programming expenses.
 In scenario 3.it requires an investment of $20 million in programming
expenses and also generates highest net income over the period.

FINANCIAL DATA FOR 2007 AND THREE SCENARIOS:

2007 Base Scenario 1 Scenario 2 Scenario 3
REVENUE
Ad sales $207,567,360 $249,080,832 $322,882,560 $345,945,600
Affiliate fees $81600 $81600 $81600 $81600
Total revenue $289,167,360 $330,680,832 $404,482,560 $427,545,600

EXPENSES
Operations cost $72,100,000 $72,100,000 $72,100,000 $72,100,000
Programming $55,000,000 $55,000,000 $70,000,000 $75,000,000
cost
Ad sales $6,227,020 $7,472,424 $9,686,476 $10,378,368
commissions
Marketing & $60,000,000 $60,000,000 $60,000,000 $60,000,000
advertising
SGA $41,200,000 $41,200,000 $41,200,000 $41,200,000
Total expense $234,527,020 $235,772,424 $252,986,476 $258,678,368
Net income $54,640,340 $94,908,408 $151,496,084 $168,867,232
Margin 19% 29% 37% 39%

Based on the above calculated financial data, we found that

 The second scenario as well as third scenario spent an incremental

programming expense of $15 million each.
 Compared to the first two scenarios, the revenue and net income of dual
marketing (i.e. Fashionistas, shoppers & planners) is higher.
 This data shows that it will be wise in choosing the third segment since it
gives the highest net income and profit margin for the channel.
 CASE ANALYSIS REPORT
“THE FASHION CHANNEL”

Submitted to: Mr Prasanta Chopdar Submitted by,

Date: 16/07/2019. Abisakke
Anish Fathima
Prasanna
Sharadha priya
Subbulakshmi.