The J.C. Penney Company considers its customers as its number one priority and provided them with an abundance of sales and promotions. Today, JCP has further expanded its brands into on-trend fashions and partnered with successful product lines such as Sephora within JCP stores. In doing so JCP has positioned itself to serve a wider range of consumer’s wants and needs. Recently, the company has undergone a transformation from a barrage of constant sales and discounts to a more streamlined, manageable set of monthly promotional specials. Overall low prices have replaced sales and coupons of the past. Consequently, the company has updated to a trendier look, while attempting to keep up with competitors such as Macy’s and Kohl’s. Although much of JCP’s new look and pricing has assisted the company in appealing to target demographics, additional merchandising steps could still be taken. Creating additional partnerships with high-end, trend-forward, or well established brands is not only popular, but would continue to elevate the image of JPC. Expanding the stores’ products with new brands and new merchandise in areas such as outdoors, electronics, home furnishings, and cosmetics could move JCP into a position where their stores would cater to more of their customers’ needs. Utilizing directed research into new products and brands, signing new brand partnerships, and implementing targeted store rollouts of updated merchandise would allow JCP move its new image forward and increase its presence in the lives of its customers. The unique opportunity to completely reinvent the image of this 101 year old store is being undertaken and the possibilities of this department store have never looked brighter. Innovation will be the number one resource for the J.C. Penney Company to succeed during these tough economic times and beyond.
Current Marketing Situation
In 1902, James Cash Penney opened the first J. C. Penney in the town of Kemmerer, Wyoming under the name the Golden Rule. It has become one of the largest department and discount retail chains in America. Its target market consists of middle-income families who want the convenience of shopping for a variety of goods at affordable prices without sacrificing quality. J. C. Penney operates 1,033 department stores in 49 states and Puerto Rico as of February 3, 2007. It has also expanded to serve its consumer base by offering its products and services via the internet and through distribution of its general merchandise catalog.
Direct competitors of J. C. Penney include Kohl’s, Dillard’s, Stage Stores, Inc., and Stein Mart. Existing firms compete for market share based on economies of scale, tight cost controls, and investments in brand image. This competition nearly eliminates any possibility of new entrants entering into the industry. The majority of products found within this industry are similar, the threat of substitute products is high and the switching costs for buyers are extremely low. Many of the companies within this industry compete on price while trying to maintain a certain level of quality in their products. Firms within this industry try to differentiate their product lines. J. C. Penney is a prime example of how this marketing strategy can help increase a company’s market share within the retail industry. However, differentiation does not come without a price. Because of the contracts and patents that come with this process, the bargaining power of a firm’s suppliers jumps from a low to a moderate level. The key success factors within this particular industry play an important role in gaining a competitive advantage.
The key success factors within the department store retail industry are economies of scale, lower input costs, and investment in brand image. Staying on top of these key success factors allows a company to stay one step ahead of the competition, thus maintaining and even gaining more market share.
JCPenney targeted their brand…