Main Raisons for the Decline of JC Penny

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Overview of JC Penny Case
In my review of the JC Penny case, I focus on understanding the main reasons for the decline of the JC Penny brand as well as ways to stabilize and revive it. First, I assert that the main causes for the brand decline were caused by the actions of then CEO Ron Johnson who misunderstood what the JC Penny brand was about, which caused the company to lose sight of its target market. From there, I suggest that the company bring back popular private label brands, begin listening to their customers, and embrace the growth of online retail. Finally, in order to ensure long-term success and stability, JC Penny must be repositioned as a modern brand that truly cares about meeting the needs of its customers by striving to inspire them in their everyday lives.
Managerial actions, brand neglect, and loss of target market main drivers of JC Penny brand decline
After he was hired, then CEO Ron Johnson introduced a pricing philosophy called “the true price,” which involved the replacement of sales through coupons with everyday low prices. This eliminated the need to inflate prices that would later be discounted for sales. However, Johnson overestimated the rationality of consumers and forgot that coupons were communication tools that announced the beginning of the shopping season5. Their core customers were dependent on coupons and often times waited until sales before they would shop. The coupons gave customers psychological justification to shop for good deals. Besides alienating core customers by removing coupons and sales, he tried to turn JC Penny into a more modern shopping experience complete with boutique stores within the larger store, Wi-Fi, and juice bars with smoothies and coffee3. National brands replaced p...

... middle of paper ... The winning family would appear in a series of JC Penny advertisements that shares their story. There would also be a website where people can share what family means to them, discuss the unique problems that their family faces, and receive helpful advice and support from others, which creates a sense of community. Doing so portrays JC Penny as a company that looks beyond the bottom line and one that truly cares about engaging and meeting the needs of its customers. Redefining the word “family” would help de-stigmatize JC Penny as being only known for a family, discounted shopping experience.
All of the marketing tactics discussed will be used as a way to get customer feedback, gage the customers’ perception of the new brand image, increase traffic in stores and online, increase knowledge about JC Penny, and hopefully position JC Penny for long-term success.
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