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 ... ...ly. 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.
The competitive analysis sought to establish Kendra Scott’s competitive rivalry, buyer power, supplier power, threat of new entrants, and threat of substitutes. Kendra Scott has various major competitors, but it has preserved its leadership in the jewelry industry by maintaining a brand that is associated with superior and consistent customer experience, authenticity, superior core values, and flexibility in responding to changing tastes. The consumers have weak bargaining power largely due to the emotional attachment they have for particular jewelry brands. Besides, they do not rely on market forces and pricing levels to make purchasing decisions. The jewelry company and its main competitors depend on a few suppliers for their raw materials
A prior market firm used by Wal-mart (GSD&M) warned Wal-mart of the public image issues they were facing and had not addressed, even though they had been advised of them for over two years. GSD&M wrote in one review to the company that “sadly, after two years of empty rhetoric and ineffective publicity stunts, we now know that Wal-Mart has not only needlessly hurt its Associates and their families, but has pointlessly hurt the image and success that Sam Walton built.” (wakeupWalMart.com, 2007). Wal-mart has acted in a manner that blends with the theory of egoism. This theory “sets as its goal the benefit, pleasure, or greatest good of the oneself alone.” (wofford.edu, 1997). “Egoist use personal advantage…as the standard for measuring an action’s rightness.” (Shaw, 2008, p. 45). Clearly Wal-mart today is acting with interests geared toward their personal advantage and not considering the wreckage it is leaving all around them.
Youdath illustrates some of Kmart’s management changes, Charles Conway wanted to turn Kmart into an “Everyday low price destination,” making Wal-Mart Stores a direct competitor. Conaway cut back on advertising and the results were not profitable. After an unprofitable holiday season in 2001 the company filed bankruptcy. In 2002, James Adamson hoped to improve customer service and restock the shelves within the Kmart Stores. While Kmart was taking time to recover from filing Chapter 11, its rivals like Wal-Mart and Target were stealing its customers. When Kmart was focusing on random in-store discounts, Wal-Mart and Target were pitching low prices, broad inventories, hip products, and a pleasant shopping experience (2002).
Kohl’s is best known for their promotion strategies. The company uses nearly every promotional tactic simultaneously. Direct mail coupons, electronic coupons, rewards programs, incentive programs are all part of Kohl’s everyday promotions. Additionally, they advertise with fliers in newspapers as well as online. A mobile application is also available for
With development for so many years, the stores had been out of fashion. Its brand image was not attractive and distinctive to customers as before.
In 2002, CEO of Levi Strauss, Phil Marineau was faced with a tough decision: whether he should sell product at Wal-Mart. In the last five years, Levi-Strauss had lost sales and had to close US plants to move production to cheaper offshore areas. Levi's really needed to revive the brand image to gain back some lost sales and was using marketing to create new advertisements and product placement to broaden their target market. Levi's had tough competition on every level of the price-point spectrum, whether it be high end retailers like Diesel or Calvin Klein, middle vertically integrated retailers like Gap or American Eagles, and on the bottom, private-label brands like Wal-Mart and Target.
Kmart, once the leader in the discount store industry, has found itself surpassed by Wal-Mart and Target in recent years and is now facing the possibility of closing its doors. The differences among the companies’ successes can be seen in their business models and strategies. Wal-Mart focused on decreasing expenses and Target established its market placement as a high-quality low-cost discount store. In contrast, Kmart used a promotions-driven business model. Because of this, Kmart focused on trying to generate sales from promotions, rather than trying to cut expenses to increase their profits
In addition, the letter addressed how the 2013 economic downward spiral in the United States caused consumers to purchase discounted products from Family Dollar. The CEO pointed out that this economic uncertainty resulted in an increase of “net sales by 11.4% for 2013 in comparison to the previous fiscal year and recorded operating profit of $688 million, a 3.6% increase (www.sec.gov) ”. Also, this letter explained that “830 Family Dollar stores were selected to be either renovated, relocated, or expanded (www.sec.gov)” so that the organization can continue to be competitive. Its focus is to provide a better shopping experience that appeal to a broader customer base. In hopes that this re-branding...
Wal-Mart Stores, Inc.’s legendary competitive advantage in distribution and low cost operations has eroded beyond the point of recovery. Once considered the undisputed cost leader in retail, a recent study showed that after discounting tax and shipping, a basket of goods at Walmart cost 19% more than at Amazon.com (Jannarone, 2011). Forbes contributor Steve Denning points out that if a consumer wants something quick, he shops at a convenience store; if he wants something cheap he’ll buy at Amazon.com; and Walmart is no longer needed (Denning, 2011).
Another symptom of Wal-Mart’s mid-life crisis is a healthy growth amongst its competitor’s, similar to a person’s change in social relationships (Doheny, 2009, p. 2). Wal-Mart is experiencing declining demand as compared to its competitors (Kotler & Keller, 1 - Defining Marketing for the 21st Century, 2014, p. 7). Declining demand, consumers choosing to buy the...
After deciding on a message too deliver to its customers, a retailer must then decide on the best way to actually get the message out. These can include television, radio, newspapers, direct mailers, and many other methods. It is important for retailers to keep the cost associated with promotion in mind so it does not unintentionally over-inflate the cost of goods. However, if that retailer does not promote enough, then it will fail to bring in the customers it
The objective of this research paper is to illustrate the survival difficulties faced by a once great company. This paper examines the downward spiral of a once dominant retail giant. It considers the external contextual forces shaping radical changes in the traditional retailing industry as well as the internal forces associated with specific decisions. The paper will explore and assess these external and internal strategic challenges, culminating with the current position of the organization. The paper will look at how the rapid changes and complexities in the retail industry is driving innovation and competition between the new technology driven companies and the traditional retail firms still in transition.
Some core competencies that must be exploited are: Brand Kmart is an existing well-known and trusted national brand in USA Kmart has private label and designer clothing that is well endorsed Infrastructure Kmart has a large number of well-located, low-cost, leased stores in urban far away from competitors through out the country ( Appendix B ). Staffing Confidence by the market in Kmart is created by the achievements of its staff and management. With the turn-around strategy in place, new blood has been put into the top management structures. In any renewal there will be retrenchment as unprofitable stores are closed. This can be used as an opportunity to retain and move high performing staff to where they are needed and to get rid of non-performing staff. Anderson the chairperson of Kmart is well supported by Wall Street and the board of Directors. These new staff members enter the company with needed skills to address problems in certain areas that previously were poorly managed such as inventory control and merchandising. Store locations, layout and Performance Stores conveniently located away from competitors like Wal-mart and Target therefore less to compete for customers face-to-face. There are 250 non-performing stores who have already been identified as being more cost effective to close than continue with running costs. Expertise exists in-house for the planning of store layout and appearance to meet different customer segments. This concentration of effort will enable focus on key areas Technology Kmart has already invested in good retailing systems. The system can be use to control inventory, supplier payments, track customer buying and monitor income versus profit margins across all stores. Research and Development The planning department is well established and in cross-functional to provide various perspective. The planning department to ensure that strategies at all levels are executed can further use the access to past data and knowledge of changes in buying patterns. Financial Backing JP Morgan Chase has agreed to support Kmart to avert the current threat of closure due to bankruptcy.
Wal-Marts emphasis is on its image of everyday low prices and high quality goods when marketing. Wal-Mart uses many different channels when marketing itself. It uses television, radio, monthly circulars, weekly newspapers and many more channels. Each one of these channels can be used in an unique way to emphasize Wal-Mart’s position of selling quality products at low prices. Radio usually grabs the audience’s attention by promoting products which are experiencing high demand. Both of these channels are made stronger by the use of newspapers adverts and monthly circulars. In these marketing channels deeply discounted items are highlighted to the potential competitors and these items help lure the customers into the stores. The idea of having “quality for less” is a good marketing plan because it gets people into the store. It also offers a competitive advantage over the competitors because they can not financially match Wal-Mart prices. This is due to Wal-Mart having better use of financial resources, technology and physical resources.
In October 2000, after only 10 months of operation, Priceline’s affiliate Priceline Webhouse Club, unable to raise additional financing, shut down its business, after running through $363 million. The financial climate at the time, with its renewed emphasis on profitability, made it impossible for Jay Walker, Priceline’s founder, to raise the additional hundreds of millions that would be required before Webhouse might become profitable. Walker did not see the closure as a failure of the Priceline business model, however. Instead, he characterized it as the result of the “fickle sentiments” of investors. Many analysts did not accept Walker’s characterization. Instead, they pointed to other factors. First, many of the major manufacturers of food and dried goods chose not to participate in Priceline Webhouse. So, to generate consumer interest, Priceline Webhouse subsidized discounts on most products itself. Although some major manufacturers, such as Kellogg’s and Hershey’s, did eventually sign up, many, such as Kraft, Procter & Gamble, and Lever Brothers, did not. The second miscalculation was that bidding on groceries and gasoline did not exactly provide a “hassle-free” way to shop. Customers were required to bid on and pay for groceries online, then use a special identification card to pick them up at a participating supermarket. If the particular items purchased were not available at the store, the customer would