Case Analysis: The Fashion Channel

TFC : The Fashion Channel

24X7 TV Channel
Only Network Dedicated to Fashion
Average Rating 1.0(1100,000 people watching at any point of time)
Revenue Generation
Advertising Revenue
Cable Affiliate Fees
The Product :The Fashion Channel(TFC)
Channel Offerings
For Viewers:
1. Fashion Shows
2. Model & Photographer Interviews
3. Photo shoots
4. Fashion and Trend advisor shows
5. Fashion Products Offerings
For Advertisers
1. Advertisements of length 30 & 60 seconds
2. Six Minute Ad time for 30 mins of programming
3. 2016 minutes per week of advertising
Customers Include : Cable Operators, Advertisers, Viewers
Analysis of Survey Findings( Survey by GFE Associates)
The following parameters were considered for analysis the GFE Survey. Parameters with a
strong variation in Agreement and Disagreement statements were noted

Question Strongly Agree/Agree(%) Strongly Disagree/Disagree(%)
I Rely on Television reports on
fashion to plan what I will
wear to work
17 38
TFC is my favorite channel 25 39
I like to shop for clothes for
parties and special activities
41 24
I shop around to find best
value of clothes
39 21

The following trends can be inferred from the survey
People have tendency to shop for occasions
People rely on door-to-door approach to find varieties and also to get value for money
People seldom take TV fashion reports into consideration for fashion choices
TFC lacking in generating loyal viewers
Emerging Segments Identified
Broad Based Segment
o Women Aged 18-34
o Men of all ages
Fashionistas
o 50 % of 18-34 year old female viewers
o Highly trend and think a lot about fashion
o Find fashion indulging and spend considerable time in shopping
Planners and Shoppers
o 25 % of 18-34 year old female viewers
o Stay updated with latest fashion trends,
o Look for value for money
Situationalists
o 30% of 18-34 year old female viewers
o Indulge in shopping for specific occasions
o Find Fashion entertaining but not fashion savvy
Basics
o Comprises 45 % of all female viewers and 55 % of all male viewers
o Not fashion savvy and look for value for money

Viewer Demographics Analysis
Maximum viewership during 8-11 pm for fashion programs on other channels
Viewers getting free from other engagements by 8 pm

Suggested Scenarios
Target Fashionistas, the Shoppers/Planners and the Situationalists(Scenario 1)
Targets Fashionistas, the segment preferred by advertisers (Scenario 2)
Target both Fashionistas and Shoppers/Planners Segment (Scenario 3)
Financials for Different Scenarios
Ad Revenue Calculator
Current
2007
Base Scenario 1 Scenario 2 Scenario 3
TV HH
110,000,00
0
110,00
0,000 110,000,000 110,000,000 110,000,000
Average Rating 1.0% 1.0% 1.2% 0.8% 1.2%
Average Viewers
(Thousand) 1100 1100 1320 880 1320
Average CPM* $2.00 $1.80 $1.80 $3.50 $2.50
Average
Revenue/Ad
Minute** $2,200 $1,980 $2,376 $3,080 $3,300
Ad Minutes/Week 2016 2016 2016 2016 2016
Weeks/Year 52 52 52 52 52
Ad Revenue/Year
$230,630,4
00
$207,5
67,360 $249,080,832 $322,882,560
$345,945,60
0
Incremental
Programming
Expense
$
-
$
-
$
15,000,000
$
20,000,000


2006
Actual 2007 Base Scenario 1 Scenario 2 Scenario 3
Revenue
Ad Sales
$230,6
30,400 $207,567,360 $249,080,832 $322,882,560 $345,945,600
Affiliate Fees
$80,00
0,000 $81,600,000 $81,600,000 $81,600,000 $81,600,000
Total
Revenue
$310,6
30,400 $289,167,360 $330,680,832 $404,482,560 $427,545,600
Expenses
Cost of
Operations
$70,00
0,000 $72,100,000 $72,100,000 $72,100,000 $72,100,000
Cost of
Programming
$55,00
0,000
$
55,000,000
$
55,000,000
$
70,000,000
$
75,000,000
Ad Sales $6,918, $6,227,021 $7,472,425 $9,686,477 $10,378,368
Commissions 912
Marketing &
Advertising
$45,00
0,000 $60,000,000 $60,000,000 $60,000,000 $60,000,000
SGA
$40,00
0,000 $41,200,000 $41,200,000 $41,200,000 $41,200,000
Total
Expense
$216,9
18,912 $234,527,021 $235,772,425 $252,986,477 $258,678,368
Net Income
$93,71
1,488 $54,640,339 $94,908,407 $151,496,083 $168,867,232
Margin 30% 19% 29% 37% 39%

Segmentation Strategy to be Adopted for TFC
Target at both Fashionista and Planners/Shoppers Cluster
Net income to rise by $115 million
TV rating improves from 1.0 to 1.2, CPM increases from $2.0 to $2.5
The scenario would give TFC a differentiated programming approach towards the target
audience
Steps to be Taken by TFC
Internet advertising via ecommerce platforms
Advertising the channel in places of mass shoppers gathering like shopping malls etc
Segmentation Plan to be presented to prospective and new advertisers
Promotional events with stores metropolitan areas
Exclusive shows during prime time(9-11) Monday to Friday
Special Weekend shows for Sunday-Saturday Prime Time
Shows to increase consumer engagement by means of Feature-On-TV
competitions/events

Lessons from IMT
Segmentation would be done keeping in mind the interests of the prospective students.
Students would be categorized on the basis of what they want from the institute.
Segmentation Parameters could be
Gender
Work Experience
Educational Qualification
Entrepreneur/Job Seeker
Segmentation could also be done for the companies that come for recruitments or any other
kind of engagement
Segmentation Parameters for Companies :
Industry/Domain
No of Recruits
CTC Offered


Learnings from Session
Conceptual clarity between company/brand/product
Segmentation for Business Market
Models like B2B,B2C should not affect the segmentation process for markets(Business-
Non Business)