CNN and Lifetime were the two biggest threats for the TFC because there ratings were also higher in comparison to TFC. TFC has rating of 1.0 throughout whereas CNN had the rating of 3.3 and Lifetime had 4.4. The study showed that TFC was facing additional competitive challenges in its attractiveness to cable affiliates. On a scale of 1 to 5, TFC had achieved a 3.8 rating on consumer interest in viewing, while the two competitors with new fashion programming had scored higher: CNN had scored 4.3 and Lifetime a 4.5 On awareness, TFC had scored 4.1 while CNN scored 4.6 and Lifetime a 4.5. On perceived value TFC was at 3.7, CNN 4.1 and Lifetime 4.4. This was resulting on their ad revenues also that was the main reason why higher officials of TFC were concerned that others were taking away their market share of ad revenues.
The reason they were found was that they had not segmented their market they were doing it without any detailed segmentation, branding, or positioning strategy.
Now they were thinking to do a proper market segmentation so that they could approach to the right customer with the appropriate information and message. TFC needs to identify the customer groups that are most worth the effort to pursue. Fr that they use market research not only for demographic data but also to study consumer behavior and attitudes—how viewers use the network, what they value, and what needs they have.
For this market research they hired a research company called GFE associates, The researchers had asked a national panel of consumers more than 100 questions about their attitudes toward fashion and TFC as a way to understand the needs that the network served. GFE associates then constructed profiles for clusters of consumers who had common attitudes and needs. The report suggested four unique groups of viewers: Fashionistas, Planners & Shoppers, Situationalists, and Basics.
Now according to the result of this survey , Dana proposed three proposals in front of the CEO, Jared Thomas and then they tried to find out the most suitable option out of these three. These scenarios were like
Scenario1: Develop a multi-segment strategy, and focus on Fashionistas, Planners & Shoppers and Situation lists between the women aged 18 to 34.
Advantages: Through implementing various marketing tools on new target segment, the rating will increase from 1.0 to 1.2, leading to the increase in average viewers.
Disadvantages: Since there is no real change in viewers’ type and programming, the CPM will drop by 10% or more and competitors will continue taking its market share.
Scenario2: Focus on the Fashionistas segment and spend $15 million on programming. (Single segment concentration)
Advantages: This segment shows the highest interest in fashion and is strong in high valued 18-34 female demographics, which will deliver a CPM boost. With $15million on content improvement, it will attract more target consumers.
Disadvantages: Fashionistas is the smallest segment in four clusters. It is risky if only target at this group and the average viewers will decrease as well. It also needs additional expense to change the programming which will bring upset to subscribers and employees.
Scenario3: Target at both Fashionistas and Shoppers ; Planners clusters and spend$20 million on programming. (Product specialization)
Advantages: Dual-targeting will ensure the average viewers and rating. It is expected that rating will grow to 1.2 while CPM will come to $2.5.
Disadvantages: There is additional $20 million should be draw from the net income.