Feb 06, 2012 jcpenney claims fair and square pricing. The one that best described their pricing strategy is goodvalue pricing because goodvalue pricing offers just the right combination of quality and good service at a fair price. Penney, ron johnson switched to a new fair and square pricing strategy, but failed to effectively market the benefits of this strategy to their customers, leading to loss in revenue and decrease in number of customers in the second quarter of 2012. Penney is in the midst of a few drastic maneuvers the most dramatic approach since the radical measures brought on when former apple retail guru ron johnson was ceo from. But nevertheless they launched fair and square pricing whereby promotions and sales would be a thing of the past, for the most part, and in their stead would be everyday prices, best prices. The square frame imagery will be evident throughout all of jcpenneys marketing, to remind customers to frame the things they love. New pricing strategy average discounts to get customers to buy went from 38% to 60% too expensive for jc pennys to sustain old strategy of highlow pricing becoming too expensive and addictive implemented edlp similar to walmart new strategy to implement every day low pricing fair and square pricing strategy. Penney lacks the differentiation to make this pricing strategy successful. Mar 01, 2016 a few years ago many swore the bankruptcy of j. Its discounting is supposed to be limited to a best price friday every other week, along with monthlong sales. Penneys fair and square pricing strategy case study solution, as a he gets prepared to discharge 2nd quarter 2012 results, ron johnson, the innovative ceo of department store j. This is because having three different tiers in a single store proved to be confusing for the customers. Jc penneys fair and square pricing and the problem of. In february of 2012, jc penny launched an entirely new pricing strategy for their department stores where they were going to introduce a new technique titled fair and square pricing.
Penneys fair and square pricing strategy hbr store. The pricing strategy was created by the ceo and is called fair and square. The blueprint, which includes jcpenneys new fair and square pricing strategy, unique and exciting monthly promotional calendar, and substantial changes to its merchandise assortment, is designed to allow customers to once again shop on their terms in a completely reinvented store environment. Jc penney failed pricing strategy linkedin slideshare. A fresh pricing scheme he set in place in february, dubbed fair and square, was a fundamental part of the brand new strategy. Jc penny final pricing retail free 30day trial scribd. At jcpenney, were always helping you find amazing deals on all your favorite items. Feb 15, 2012 jcpenney has a new fair and square every day pricing strategy. But the benefit of a product is only part of the equation. The new jcpenney logo, which combines the elements that have made jcpenney an enduring american brand, by evoking the nations flag and jcpenneys commitment to treating customers fair and square. When it comes to perceived value, we can never discount the role of price. Jc penney tried to take advantage of this by enacting a permanent sale called fair and square pricing. The wide fresh, open spaces can draw new customers for the exclusive and private label brands. Penneys fair and square pricing strategy case study solution, as he prepares for the release of its second quarter 2012 results, ron johnson, the new ceo of department store jc penney, revising the dramatic changes he.
For more on pricing strategy, download our pricing strategy ebook or check. The store will have only three simple prices every day red stickers, month long value for theme sales, white stickers and best prices for clearance items. Jc penneys fair and square jc penneys \u201cfair and. Penneys fair and square pricing strategy case analysis. The strategy jcpenney has in campuses their vision. Mistakes and lessons from jc penneys marketing strategy a sale is only a sale if its a sale. Jcpenney has been experimenting with and tweaking their business model under new ceo, ron johnson, as they respond and adapt to a changing economic. May 29, 2012 when jcpenney announced its fair and square pricing last january, investors cheered, sending its stock up. This is the first stage of many changes to come according to ron johnson. This move meant the death of complicated discounts and coupons in favor of everyday flat and honest prices. Penneys revitalization is a new fair and square every day pricing strategy.
The fair and square strategy had three pricing tiers and got rid of traditional promotions and offers, trying to simplify the shopping experience for consumers. The heart of the strategy was the fair and square approach to pricing. Penneys background founded in 1902 by james cash penney small mining town in wyoming the golden rule initially a onestop shopping center by 1980s focused on the fashion industry ron johnson appointed ceo in nov. The first quarter showed positive results with 67% of the products sold at the fair and square price however, results started to decline as mothers, the most important target customers steadily scored jc penny lower on valueperception scores lack of discounts and weekly price promotions were cited as primary reasons for turnaround, even. As a he gets ready to release 2nd quarter 2012 results, ron johnson, the new ceo of department store jc penney, is reconsidering the dramatic changes he initiated for the business model and brand. This approach would basically do away with seasonalimpromptu sales along with the use of coupons. Jan 30, 2012 fair and square pricing is a strategy being implemented before its time. Feb 24, 2017 a strategic mistake made six years ago by celebrity ceo ron johnson continues to haunt popular retailer jc penney, as evidenced by the ongoing sluggish sales growth and store closings that have. Penneys fair and square pricing strategy, marketing homework help. This is what drives them into the store throughout the year. How well or poorly do all the elements work together or work at odds with one another to deliver a coherent whole. If youre making price adjustments, make them easy to understand, and your customers will follow. The new jcpenney logo, which combines the elements that have made jcpenney an enduring american brand, by evoking the nations flag and jcpenney s commitment to treating customers fair and square.
Penneys fair and square pricing strategy case solution,j. Penneys existing highlow pricing strategy, in which the retailer ran frequent sales to offer customers deep discounts off of its higher list prices, to a new strategy the company dubbed fair and square pricing. Jcpenney fair and square case free download as pdf file. Shop our mattresses and save on brands such as sealy and serta. Finally, it was also foolish to create three tiers to the pricing scheme without conducting the market research. Jc penneys failed attempt at fair and square pricing. Jcpenney ditches fair and square pricing for old sales. A case in point is penneys fair and square modified every day low pricing strategy. Store closings were becoming a regular thing and the executive committee saw ron johnson, who has had major success in retail, as a chance to turn the company around.
Penneys fair and square strategy abridged case analysis. Penney heavily advertised the concept of their new pricing strategy, fair and square pricing, but when their implementation involved color categories, flowcharts, and was anything but simple. The centerpiece of the repositioning initiative was a switch from j. Only 28 percent of respondents to a retailwire poll in january, for example, thought the department store chain would become more competitive by moving away from the rampant discounting of old. Announcement of fair and square pricing encouraged the investors, sending its stock up. Penneys fair and square pricing strategy case analysis, j. The heart of the repositioning strategy was a switch from j. Shop with us and enjoy an unbeatable selection of jewelry, clothing, shoes and more. Reinventing jcpenney management case studies and articles. Fair and square pricing is a strategy being implemented before its time. A pricing strategy built around everyday low pricing may work where a retailer is built from the ground up. Lessons in pricing strategy from jcpenney mmr strategy. The creation of instore sephora beauty care locations will.
Jcp, invigorate the company with a new pricing strategy based on everyday fair prices. For example, walmart is built to offer low prices, and has engineered elements such as infrastructure, logistics, and merchandise to support these low prices. The jc penney rebranding strategy of fair and square pricing. Penney upgraded on turnaround strategy that steers away from apparel published.
Compare jcpenneys former traditional approach to pricing versus the fair and square pricing strategy. As a he gets ready to release 2nd quarter 2012 results, ron johnson, the new ceo of department store j. Square for retail pricing square support center us. Penney upgraded on turnaround strategy that steers away. In fact, price often trumps a benefit, especially if the consumer doesnt recognize the benefit a potential problem with the fair and square pricing strategy of jc penney. When jcpenney announced its fair and square pricing last january, investors cheered, sending its stock up. When you swipe, dip, or tap your customers card through the retail pos app, your processing fee will be 2. On every visit, customers will discover great prices every day in a unique shops environment that features exceptionally curated merchandise, a dynamic presentation and unmatched customer service.
Other components of the new strategy included a new store layout, the. But what about jcpenney ceo ron johnsons fair and square pricing strategy. Penney is in the midst of a few drastic maneuvers the most dramatic approach since the radical measures brought on when former. Jc penneys fair and square strategy jerry chang, angelica chavez, easton duncan, clay hobbs, abigail mcdonald, jacqueline soto management 4900. Jc penneys fair and square pricing strategy the case. The idea is to keep pricing simple and build longterm relationships with customers. Penneys traditional highlow pricing strategy, in which the retailer ran frequent sales to offer customers discounted pricing off of its higher daytoday list prices, to a new pricing strategy the company dubbed fair and square pricing.
Aug 09, 20 the pricing strategy was created by the ceo and is called fair and square. The blueprint, which includes jcpenney s new fair and square pricing strategy, unique and exciting monthly promotional calendar, and substantial changes to its merchandise assortment, is designed to allow customers to once again shop on their terms in a completely reinvented store environment. This also provides a new experience for core loyal shoppers. Reinventing fair and square deals a case solution, the new ceo and the new president of jc penney company, inc. A new pricing model he introduced in february, called fair and square, was a central component of the new strategy. Jcps seemingly secondary efforts to create value along with this pricing. This first part of a twopart case contextualizes the initiative and provides a means of exploring differentiation in an evolving market. Retail store begins new concept for customers nationwide. The value of fair and square pricing we believe in fair honest prices. A brief analysis of jc penneys failed pricing strategy. Penneys previous highlow pricing program to a new everyday low pricing policy that aimed to fit with a radical repositioning of the jc penney business model and brand.
Evaluate the overall effectiveness of the fair and square repositioning strategy. The scheme was originally three price levels and eliminates typical sales promotion in an attempt to simplify the shopping experience for consumers, and so move jc penney from his former highlow pricing policy. Penney lacks the differentiation to make this pricing. Jun 15, 2012 but nevertheless they launched fair and square pricing whereby promotions and sales would be a thing of the past, for the most part, and in their stead would be everyday prices, best prices.
Jcpenney does not have the service and merchandise of nordstrom, nor does it have the low cost structure of walmart. Jcpenney claims new pricing is fair and square, but is it. Jcpenney has a new fair and square every day pricing strategy. The fair and square repositioning strategy is a valuebased proposition, where j. The scheme initially had three pricing tiers and removed typical sales promotions in an effort to simplify the shopping experience for consumers. Penneys fair and square pricing strategy case harvard. Jan 09, 2014 therefore, prior to changing the store layout, johnsons first order of business as ceo was a complete overhaul of jcps pricing and branding strategy by introducing fair and square pricing. Therefore, prior to changing the store layout, johnsons first order of business as ceo was a complete overhaul of jcps pricing and branding strategy by introducing fair and square pricing. Feb 01, 2012 retail store begins new concept for customers nationwide. We take pride in being a onestop shop for all your needs, with as many options as you can imagine.
Penney, but the stock is back and ready to thrive, according to its ceo. Penneys fair and square pricing strategy harvard business. Feb 17, 2018 new pricing strategy average discounts to get customers to buy went from 38% to 60% too expensive for jc pennys to sustain old strategy of highlow pricing becoming too expensive and addictive implemented edlp similar to walmart new strategy to implement every day low pricing fair and square pricing strategy. Penneys fair and square pricing strategy harvard case study solution and hbr and hbs case analysis. The square frame imagery will be evident throughout all of jcpenney s marketing, to remind customers to frame the things they love. On february 1, 2012 the company launched its new strategy centered on fair and square pricing. In store retail environment as a series of specialty shops. Is the initial market reaction an indication of likely success. Penney off its preceding high low pricing practice. But several months later, the company delivered disappointing results. Jcpenneys new pricing plan is similar to the every day low price strategy practiced by retailers like walmart, with a few variations, as this tiered strategy is meant to meet shoppers needs on a more consistent basis, thereby making erratic sales, coupons, and promotional events unnecessary. For all other types of transactions such as cardnotpresent, virtual terminal, or invoices, youll pay. The plan stems from johnsons realization that threequarters of everything sold at j. Jan 31, 2015 the heart of the repositioning strategy was a switch from j.
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