1. The five primary types of consumer and market data I would consider if I were Dana Wheeler Ratings (the number of viewers) is the key to drive revenue growth. It is very important for The Fashion Channel to improve their average rating. While The Fashion Channel?s average rating was 1.0 (1.1 million households) CNN?s average rating was 4.0 (4.4 million households) and Lifetime?s average rating was 3.0 (3.3 million households). CPM (cost per thousand) which represented the price that an advertiser would pay for an impression? or moment of viewing. CPM is the crucial data to determineThe Fashion Channel advertising revenues which is the largest revenue source of The Fashion Channel. The Fashion Channel?s CPM was $2.00. By increasing the ratings in highly valued demographic groups The Fashion Channel could achieve CPM pricing increases from 25% to 75%. Competitor Information: The Fashion Channel has two biggest competitors: CNN and Lifetime. For male segment The Fashion Channel (39%) is facing with CNN (45%). For female segment Lifetime is the biggest competitor with 63% while The Fashion Channel is 51%. Besides CNN and Lifetime had higher customer satisfaction scores than The Fashion Channel?s in research. On consumer interest in viewing The Fashion Channel had scored 3.8 while CNN had scored 4.3 and Lifetime had scored 4.5. On awareness The Fashion Channel was at 4.1 while CNN scored 4.6 and Lifetime a 4.5. On perceived value The Fashion Channel was 3.7 CNN 4.1 and Lifetime 4.4. Fashionistas: the group had a high degree of interest in fashion. However size of cluster is 15% it would strengthen the value of the audience to advertisers with a likely increase in CPM. Thus Fashionistas is the main group The Fashion Channel focus on. Planners and Shoppers: the group has highest size of cluster (35%). They stay up to date enjoy shopping and are interested in value. It would be a potential group. Situationalists: the group has size of cluster 30%. They shop for specific needs specific situations and fashion is both entertaining and practical. 2. The pros and cons of three primary options presented A broad multi-cluster (Fashionistas Planners & Shopper and Situationalists) + Pros: The Fashion Channel would be investing in a major marketing advertising campaign and programming awareness and viewing would go up and rating would increase from 1.0 to 1.2. This strategy enables company to increase the number of viewers and follow the theme for marketing programs Fashion for Everyone?. + Cons: Because The Fashion Channel would not focus on specific audience CPM would decrease from $2.00 to $1.80 and this option would have the smallest ad sales $24980832 net income $149908407 and profit margin 29%. Fashionistas segment + Pros: This strategy would focus on single group and attract highly valued viewers so CPM would go up from $2.00 to $3.50 and revenue would increase. Ad sales $322882569 net income $15149683 and profit margin 37%. + Cons: Because Fashionistas is the smallest cluster (15%) it is very risky for The Fashion Channel to focus on only this group. This strategy would decrease viewers and the rating would drop from 1.0 to 0.8. Besides The Fashion Channel also would spend an additional $15 million per year for programming cost. Two segment: Fashionistas and Planners & Shoppers + Pros: The Fashion Channel would focus on two groups having highest interested fashion index (140 & 110) and having 50% size of cluster ( 15% & 35%) so it would improve both the rating ( from 1.0 to 1.2) and CPM ( from $2.00 to $2.50). As a consequence this strategy would have the biggest ad avenue $345945600 net income $168867232 and profit margin 39%. + Cons: This option would expense the biggest cost with additional $ 20 million. Moreover this plan just focus on only two segments (50% households) so it discourages loyal viewers in other segments and the rating would decrease. 3. Recommendation Based on pros and cons of those scenarios above The Fashion Channel should choose the third scenario which is the most appropriate long-term strategy. In the first option (a broad multi-cluster) the target group is too broad causing CPM decrease from $2.00 to $1.80 and in the second option (Fashionistas segment) The Fashion Channel focus only on one smallest group (15%) causing the rating go down from 1.0 to 0.8 while focusing on two segment ( Fashionistas and Planners & Shoppers) which have highest interest in fashion and have 50% size of viewers enable The Fashion Channel to attract more viewers resulting in both the rating and CPM go up (the rating from 1.0 to 1.2 and CPM from $2.00 to $2.50). Although the third scenario expenses the highest programming cost with additional $ 20 million it still have the biggest net income ($ 168867232) and profit margin (39%). Therefore the third scenario is optimal plan for The Fashion Channel to grow revenue by increasing viewers and advertising pricing.”
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