In this case, the management team of The Fashion Channel (TFC) must implement a new stratagic plan, turnning from their old “fashion to everyone” message to a more specific customer segment, so as to re-position TFC to increase revenues. Faced with fierce competition from Lifetime and CNN, TFC must consider a new customer segmentation strategy to increase their network ratings as well as to maintain TFC’s viewer satisfaction level.
Pros: The broad-based marketing is the safest alternative, because the old customers (especially those avid female viewers among 35-54 years old) won’t get offensed by TFC’s new change. What’s more, compared with the other two scenarios, this alternative does not require additional expense for programming and advertising. Also, since there are women aged 18-34 in all four clusters, FTC can reach all of the high-valued viewers in this scenario.
Cons: Although the broad-based scenario boosts rating, the CPM will decrease due to the unsegmented viewers. What’s more, continuing to program for everyone won’t lead TFC to a new look and there’s a great possibility that TFC’s competitors, such as Lifetime will successfully penetrate the premium CPM groups.
Pros: First of all, the specific customer segmentation gives TFC a high CPM, which helps the company to resolve the problem of a downward revenue trend. What’s more, targeting the fashionistas will surely help TFC attract more premium female vierws among the age of 18 to 34, strengthening TFC’s competitiveness against Lifetime in this segmentation.
Cons: This alternative is the most risky one as TFC will turn their focus completely away from those females aged 35-54, who were the most loyal customer of TFC. What’s more, since this scenario targets the smallest cluster, TFC’s rating will see a drop to 0.8, weakening TFC awareness among consumers, which is not in line with what the management team hopes. Last but not least,...