JC Penny On April 14, 1902 James Cash Penney the founder and two partners opened the Golden Rule dry-goods store in the small town of Kenner, Wyoming. In 1907 Penney bought out his original partners and took on new ones, beginning with Earl Corder Sams. When the firm was incorporated on January 17, 1913 as JC Penny Stores Company, there were 34 stores in the American West. Penney then moved the company’s main headquarters to New York. Today Penny’s is engaged in marketing apparel, home furnishings, Jewelry, cosmetics, and cookware.
With all those things and for many years JC Penny has been a great retail store to buy your home goods. And in recent events there has been many bad decisions that have brought Penny’s into a financial bad place. Bring in Ron Johnson, not communicating with their strategy, and not having a good strategy plan. JC Penny former CEO Ron Johnson went bold on his attempted rescue of the fading retailer, but his top to bottom makeover failed. After successful plans at Target, it seemed Ron Johnson could do no wrong.
But the winning streak came to a well-publicized end during his two year run as CEO of JC Penny, when everything he tried seemed to backfire. During that time sales one year fell 25 percent, resulting in net loss of $985 million, when Johnson took over Penny’s 50 to 70 percent of all sales were at discounted prices. The problem that high low pricing cause are huge. The customer like the merchandise, but do not like the price, and nobody buys. As a result to thru new merchandise sits on shelves. The depths of the recession made this everyday low prices strategy difficult to carry out.
Customer’s traffic dropped sharply, and without that, JC Penny and Johnson were clearly in trouble. If customers had more disposable income and felt better about the future, Johnson might have had more time to work things out three years instead of two. Finally what made it worse was when back to school season came around and the holidays. Major losses in sales. Flashback to January 2012, Michael Francis was president of JC Penny and in that same year only eight months later made a shocking leave to the company.
One thing that JC Penny did extremely well, communicate is strategy clearly and boldly to the marketing industry press. I think that the industry was more than a little bit surprised and disappointed to see such a huge disconnect between what the company has planned to communicate to customers and what the ads were conveying, about a certain product. There appears to have been some difficulty inspiring the relaunch messaging down and across all units and sectors of the company, and there lies the huge disconnect.
So in order for marketing strategy to be successful, everyone has to be on the same page. Wltn tne new marking campaign JC Penny nas, It nas done a lot to nelp Dulla brand, but it confuses consumers. Penny’s has fallen into a common branding trap of trading brand equity for actual profitability. In building its new brand with their catchy commercials, the company has overlooked the importance of a gaining profit. With their new campaign they came up with a new pricing strategy aimed to provide the customers with the great deals basically all the time.
The ads that they have created were supposed to promote; but little did they expect that they were going to lose $163 million in the first quarter. The Facebook page that Penny’s has for their brands has many customers angry and have become very outspoken over the loss of the long held JC Penny tradition of coupons. The number one rule in marketing is treating your best customers the best, because it’s much more profitable to make repeat customers at the time to spend money finding new ones. JC Penny has ompletely disregarded that golden rule.
This is a major reason why JC Penny will see their current profits decrease. In conclusion JC Penny has made some dad decisions. Ron Johnson was not the man that they should have hired to try to improve the company. I know he came in also and changed the layout of the store that is an improvement. The lack of communication between everyone in the company on what they can do to improve and keep up with times was horrible. The after math of the lack of communication was a devastation, and too many profits were lost. The company needs to communicate within every part of the company to be successful.
