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Measure the profit impact of marketing segmentation strategies and What are the pros and cons of the three segmentation scenarios

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The Fashion Channel What are the pros and cons of the three segmentation scenarios? Read carefully the case and make a list of the pros and cons of each segmentation scenario. Use the following table to summarize your findings. 2.Estimate the impact of each segmentation strategy on the company’s revenue. You will have to estimate the financials of the company using the excel file. Consider the following scenarios: 2007 Base: No segmentation; drop in ad unit pricing (average CPM). Scenario 1: Multi segments, targeting 3 groups (excluding Basics); increase in rati...

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Question Preview:

The Fashion Channel What are the pros and cons of the three segmentation scenarios? Read carefully the case and make a list of the pros and cons of each segmentation scenario. Use the following table to summarize your findings. 2.Estimate the impact of each segmentation strategy on the company’s revenue. You will have to estimate the financials of the company using the excel file. Consider the following scenarios: 2007 Base: No segmentation; drop in ad unit pricing (average CPM). Scenario 1: Multi segments, targeting 3 groups (excluding Basics); increase in ratings, decrease in ad unit pricing (average CPM). Scenario 2: One segment, Fashionista: drop in ratings, increase in ad unit pricing (average CPM). Scenario 3: Two segments, Fashionista and Shopper/Planner; increase in ratings and increase in ad unit pricing (average CPM) 3. What would you recommend to The Fashion Channel? In your answer include the following: Provide 3 arguments in 3 paragraphs that would support your decision. Describe how you would implement your recommendation. 4.What would be the implications if the average CPM of scenario 3 would remain as the current CPM (2007 Base)? Would it change your decision?

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Answer – According to the assumptions, the varied segmentation scenarios are to be discussed as follows. In the given multi segments scenario, after the increase in the rate and decrease in the provided unit price, the revenue from the ad per year has been in the increasing trend when compared to the other scenarios. On the other hand, the financial projections presented a picture where the net income has gradually decreased as compared to the actual scenario in the year 2006 and also the margins are on the lower side to the tune of 24% whereas both the scenarios have increased as compared to the base of 2007. Again, the one segment scenario also shows that the net income has increased gradually and accordingly the margin of 33% which is executed by decreasing the average of the rating and also with the help of increasing the average CPM.

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