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JC Penney's New Pricing Strategy
J.C. Penney was founded in 1902 by James Cash Penney, and by 1907 he had purchased full interest in three locations, moving his company headquarters from Wyoming to Salt Lake City in 1909. By 1912, there were 34 stores in the Rocky Mountain State areas. By 1928 Penny's had opened 1000 stores and by 1941 had 1600 stores in all 48 states. Penny's began national advertising in 1956, offered in-store credit cards in 1959, and acquired The Treasury discount stores in 1962. By 1963 it issued its first catalog, expanded to Alaska and Hawaii, acquired Thrift Drug and by 1969 was a major feature in most American cities. By James Penney's death in 1971, the company had revenues of over $5 billion and peaked with 2,053 stores in 1973 jcpenney.com; Mattioli, 2012).
Retailing in the 21st century demands far different strategies than ever before. Retailing has changed, both because of globalism and the changing desires and expectations of the consumer. Stakeholders, the media, and the government have caused retailers to be more transparent in their production and manufacturing techniques, and demand more moral and ethical behavior, more sustainable and eco-friendly practices and technology. Today, the market is such that retailers grow only by taking away from competitors, not usually by growing their own brands. This has resulted...
Prices would not end in a 9 or 7, but in whole figures (e.g. $15.00 rather than $14.99) (D'Innocenzio, 2012; Reingold).
In addition to new pricing, Penney's will created 80-100 branded stores within stores (Martha Stewart, etc.) and offer complimentary services and promotions. The central focus of the new strategy was the realization that about 75% of everything sold at the store is usually sold at a 1/2 off (50% SALE). This is, however, different than everyday low pricing via Wal-Mart. The prices will not be rock bottom discounts, but will try to convince customers that there is no need to shop for the closeout or absolute least expensive shopping experience when there are "pretty good prices" every day (Girard, 2012)
While this is certainly an innovative and new approach to retailing, the company must still work…
REFERENCES
www.jcpenney.com
D'Innocenzio, A. (January 27, 2012). J.S. Penney Slashing Prices on All Merchandise. USA
Today. Retrieved from: http://www.usatoday.com/money/industries/retail/story/2012-01-25/penneys-price-overhaul/52787388/1
Girard, K. (March 5, 2012). Is JC Penney's Makeover the Future of Retailing? Working Knowledge -- The Harvard Business School. Retrieved from: http://hbswk.hbs.edu/item/6944.html
Retrieved from The Dallas Morning News, http://bizbeatblog.dallasnews.com/2012/05/store-level-layoffs-happening.html/
Mattioli, D. (January 26, 2012). How JC Penney Was Minted. The Wall Street Journal. Retrieved from: http://online.wsj.com/article/SB10001424052970204624204577183471514403532.html
Reingold, J. (March 7, 2012). Ron Johnson: Retail's New Radical. Fortune Money. Retrieved from: http://management.fortune.cnn.com/2012/03/07/jc-penney-ron-johnson/
External Factors Penny's proposed new pricing strategy The new Penny's proposed strategy is a revitalization strategy that is directed at the pricing procedures within the company. According to Penny, there should be a "Fair and Squire Every Day" pricing strategy. This new pricing strategy was not there initially. The transformations, which are also done by JC Penny's CEO Ron Johnson, are ambitious plans, which are geared at changing the phase of
J.C. Penney News Is Bigger Than Lawsuit Decisions, Revenue Losses, and Resignations - Mark Cuban's Stock Purchase Is Better Than Money for J.C. Penney's Recovery (JCP, MSO) Organizational context: J.C. Penney J.C. Penney is one of the most famous and renowned of the major U.S. department stores. It is well-known for its image of Americana and its reasonable prices. However, within this particular market segment, J.C. Penney is facing increasingly stiff competition
Pricing JC Penney is a major department store, doing billions of dollars in revenue per year. The industry, however, is mature and some would say stale. Younger consumers in particular are not attracted to the department store shopping experience, instead choosing anything but. JC Penney tapped former Apple executive Ron Johnson as its new CEO, and made big changes to its merchandising and especially to its pricing. One pricing strategy that
JC Penney's In the retailing industry, it is challenging an organization to break down all its previous designs, advertising plans, and store environments to make a new beginning. Nonetheless, that is precisely what JC Penney did, and has done several times. Founded over 100 years ago, this organization has seen changes and redesigns with each new CEO. Recently, JC Penney, otherwise called JCP, has begun a fresh again with a new
Further the fair pricing strategy which Yousuf refers to as "a permanent discount of at least 40% on all items" could also effectively defend the company's market share from both existing competitors and new entrants. Next, J.C. Penney's move to embrace a new management team could end up yielding some positive results as such a move will inevitably change the way things are done at the firm. Indeed, in
JC Penny Makeover Background on U.S. Department Stores and Background on J.C. Penney Dr. Robert Tamilia (Marketing professor at the University of Quebec at Montreal) explains that the department store in America not only "…revolutionized the retail store," and the shopping experience, and the available of products and promotional techniques, the department store contributed in a major way to the evolution of "...hiring practices and inventory control procedures" (Tamilia, 2002, p. 3).