You know when I was a kid, 30 years ago, the big stores in my town was Sears and JC Penny. Sears was the ideal store for home improvement and middle of the road clothes, and JC Penny was at the upper echelon of clothing and home decor. So what happened? Both the stores have lost out on the supremacy throughout the United States. With the injection of the likes of Walmart back in the 90s, with their cheaper prices, those loyal to JC Penny and Sears left to Walmart. Then the Internet age came around, with the on-line retail giants such as Amazon and eBay, ultimately put JC Penny on the brink of collapse. But then enter former Apple executive Ron Johnson, and his innovative approach to make JC ...view middle of the document...
— Sale prices become everyday prices. The company will use last year's sales figures to slash all prices at least 40% or lower than last year's prices. So, a woman's St. John's Bay blouse regularly priced at $14.99 could have the "Every Day" price of $7.
— Fewer sales. The retailer will pick items to go on sale each month for a "Monthly Value." For instance, in February, it might be jewelry for Valentine's Day and in December it could be Christmas decorations. Items that don't sell well go on clearance and will be tagged "Best Price," signaling to customers that it's the lowest price.
— New tags. The retailer used to pile stickers on price tags to indicate each time an item was marked down. Now, when an item gets a new price, it gets a new tag. A red tag indicates an "Every Day" price, a white tag a "Monthly Value" and a blue tag a "Best Price."
— Simpler pricing. Penney will use whole figures when pricing items. You won't see jeans with a price tag of $19.99, but rather $20.
— New advertising. There will be an ad that shows shoppers screaming "No" to discounts as they look in their mailboxes, a pile of coupons and big sales signs. Talk show host Ellen DeGeneres will be the chain's new spokeswoman. A 96-page colorful catalog that highlights "Monthly Value" items will be mailed each month to 14 million customers, along with other promotional efforts.
These target areas, are monumental in comparison with JC Penny's previous marketing strategy. With shoppers able to see the deals on-line or in a catolog, and be guaranteed that price for a month, will increase sales overnight. JC Penny is soon to thrive once again.
2) Do you think JC Penney's new pricing strategy will work? Support your position in terms of the environmental factors such as economy, the competition, and the changing consumer behavior.
I think their pricing strategy is brilliant. For starters, the fact that all prices will be a rounded number is JC Penny showing their customers they are not trying to hide anything. When you put a price...