J Penney's Fair and Square Strategy

Halil YILDIRIM

KTPUF6

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MARKETTING MANAGEMENT

SUMMARY OF J.C PENNEY’S ‘FAIR AND SQUARE’ STRATEGY (B) OUT WITH THE NEW, IN WITH THE OLD

J.C Penney’s stock price dropped an additional 8% compounding its frefall that had started six month earlier. Johnson is the CEO of the company and has been at the helm of J.C Penney for 10 months. His plan to turn around the declining trend named ‘Fair and Square’ Strategy which aimed to reposition the business model and brand, featured changes for design of stores, pricing, portfolio, merchandising, marketing communications and sales compensation. With this strategy Johnson aims to change the strategy of high-low pricing strategy to a new everday low pricing strategy.

Main acticities that Johnson follow in order to execute this strategy; focuising on store redesing, renovating almost 700 of them. But at the same time, sales and financial tables are showing bad results . Sales continously dropping and 123 million dollar loss on the quarter. Johnson still insist on his strategy by developing additional promotional offerings like free family photo portraits in stores in November and December. He also distrubutes 10$ coupons named gifts via mail to motivate their consumers to shop.IN store sales associates distrubuted 80 million gift buttons for the change to win 20 million prizes including vacations etc. Despite the high levels of promotion acticity consumer reponse was not positive. Sales were down 28.4 % in the 4th quarter. Store traffic decreased 17% and customer conversion was down 10% year over year. A loss amonunth 985$ million for the fiscal year.

Commentary

Wrong Strategies of Johnson;

-Quick changes in business plan, pricing, promotion, marketing strategy, positioning of brand will never solve the short-term financial problems. That’s why Johnson was fired and had not a good relation with the board.

- In order to turn around the firm, Johnson should have focused on...