Current Event Analysis Essay

JCPenny has just launched its new marketing strategy on Feb 1, 2012, which include improving its brands, refreshing its new stores, and the most important part—the new pricing model. The new pricing model is so called â€Å"Fair and Square† pricing strategy. This new pricing strategy includes three parts. The first one is â€Å"everyday† regular pricing, which is about 40% off 2011’s retail price without discount or promotion. The second one is the â€Å"month-long value† pricing, which offers even better price on specific merchandise. The final one is the â€Å"best price† pricing, which are clearance deals on the first and third Fridays of each month. In my point of view, I think JCPenny’s new marketing strategy is necessary for their further development in such tough competitive environment. According to Martis-Olivo, a retail analyst for Thomson Reuters, JCPennt’s sale performance is poor compared to Macy’s in 2011. Although Macy’s offers less discount and promotion, it posted a much stronger same-store sales average. Consumers now think department stores usually offering items at high prices, then offering discounts or coupons, so use such discount or coupon promotion to attract sales is not as much efficient as before. Furthermore, internet sales are jump up significantly in recent years due to the lower price and more convenience. So JCPenny’s new marketing strategy is launched in time to tackle these challenges. The â€Å"everyday† pricing is about 40% off 2011’s retail price without discount or promotion, which will give the consumers better value products to increase the chances that consumers will visit more and purchase more because of the lower prices. The â€Å"month-long values† on specific items, which will also keep the customer mentality from waiting for additional price drops, and this will also attract consumers come to the store more frequently, instead of only come into the stores when promotion. Finally, the â€Å"best price† pricing on the first and third Fridays of each month will help the stores to clean up their piled up inventories to avoid additional carrying cost. JCPenny’s new marketing strategy actually coincides with the marketing mix, which we usually called 4 Ps: Price, Promotion, Product and Place. As we discussed above, the important role of the JCPenny new marketing strategy is the new pricing model, which give the lower everyday price and month-long values to the consumers. So their new pricing position is focusing on better price-value relationship. Also, they hold promotion on the first and third Fridays of each month, which is the new name for clearance, or the lowest price you’ll ever see for a particular item. Secondly, brands are actually the products to department stores like JCPenny. The improvement of brands is refer to improve their products, as Wahlstrom described, J. C.  Penney has put its focus on fewer, â€Å"more relevant† brands, and less on private brands that are â€Å"less efficient,† such as Arizona and Worthington. These will provide consumer with quality instead of quantity. The final P is referring place, as we mention at the beginning, JCPenny is refreshing its new stores, which may give consumers more convenient accessibility. Furthermore, the new marketing strategy is also coincides with what we just learned from the class– Acquiring & Retaining customers. The lower price is to change consumers’ perceived cost and then will change the perceived value. The lower price acquiring new customers and retain customers to come to the store more frequently. Also, new brand marketing is to improve their products and service, which change the perceived benefits and again will change the perceived value, and change the customers’ preference. These combinations of quality, service and price are called â€Å"customer value triad, as value increases with quality and service and decreases with price. These aim to coagulate JCPenney’s relationship with its loyal customers and attract new ones.