TFC risk - betting turn out in a specific way. Potential...

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Essentially, we need to watch out for the “grey columns” in the spreadsheet, as they are all variables which can alter drastically in the coming months/years. The television market, as well as our audiences, can be quite finicky. If we drastically change our marketing and programming mix, it may not produce desired results. Our industry research does provide us general trends and expected results from which we can safely provide estimates as to projected consumer behavior. However, we must always play devil’s advocate and realize the potential risks of deviating from our programming path to one which is starkly different.Other industries have experienced similar occurrences as well. Many product manufacturers conduct extensive test marketing and focus groups, but when their product changes roll out, the outcome is disaster. I would consider Scenario 3 the riskiest of the 3 options, as it involves the highest additional incremental programming expense of $20 million, as well as plays out based on several key variables we are
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Unformatted text preview: betting turn out in a specific way. Potential Risks TFC Susceptible to From Implementation of Scenario 3:Risk Outcome Average Viewer Rating Continues to Hold at 0.8%, rather than increasing to 1.2%. Drop in Ad Revenue and viewership, thereby affecting our net profit margins and ability to sell more ad time at premium prices Going average CPM continues to hold at $1.80, versus rising to $2.50. If we increase our viewership due to an increased Average Viewer Rating, yet still achieve an average CPM of less than $2.50, our ad revenues will be less than that achieved through Scenario 1. Some Risks are: Drop in ratings (0.8) as the viewership will decrease because of targeting a particular segment. There will be need to spend $ 20 million on programming . Strengthen the pricing ability due to rise in CPM . There will be need to spend $ 15 million on marketing annd advertising . Very hard to convince the leadership team ....
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This note was uploaded on 02/10/2012 for the course MKT 500 MKT 500 taught by Professor Harris during the Spring '11 term at Strayer.

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