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Pricing & Integration

Read these articles.

D'Innocenzio, A. (2012). J.C. Penney slashing prices on all merchandise. USA Today (January 27). Accessed 5/5/12 at

Mattioli, D. (2012). How J.C. Penney was minted. Wall Street Journal (January 25).
Available 5/5/12 through ProQuest database.

Mattioli, D. (2012). J.C. Penney chief thinks different. Wall Street Journal (January 26).
Available 5/5/12 through ProQuest database.

Reingold, J. (2012). Retail's new radical. Fortune, 165:4(March 19).
Available 5/5/12 through EBSCO database. There's a lot going on at J.C. Penney these days. With a new CEO, Penney's, confronted with pressing competition up, down, and sideways in the department store wars, is reinventing itself in terms of merchandising, supply, and pricing strategies. Here we'll concentrate only on the pricing aspects of these new directions. However, this is ultimately about positioning, trying to find a space that is responsive to potential customers as well as differentiating the Penney's brand from Target, Kohl's, Wal-Mart, and Macy's.

Assignment: Develop a report in terms of the following guidelines. A well written report should have a brief introduction, headings or subheadings, and a brief concluding comment. Note that you should use some keywords as headings or subheadings such as "Key External Factors", instead of a sentence or a question. Looking at BACKGROUND5, as well as what you learned in Modules 1, 2, 3, and 4 follow these directives and address the following issue.

1) Briefly describe Penney proposed new pricing strategy, also providing bit of background on the company and department store industry.

2) Do you think JC Penney's new pricing strategy will work? Support your position in terms of the environmental factors such as economy, the competition, and the changing consumer behavior.

3) How does this pricing strategy complement Penney proposed new merchandising and promotion strategies? (You need to take into account JC Penney's segmentation, positioning and branding strategies to explain this issue.)

Solution Preview

1) Briefly describe Penney proposed new pricing strategy, also providing bit of background on the company and department store industry.

The new pricing strategy returns pricing at JC Penney to lower, stable pricing that people can depend on. There will be limited sales, though the original idea of no sales except on certain days and season changes has been dropped. The pricing strategy also includes a new marketing idea of 'small shops' in the high traffic center of the store. Offering a low price strategy returns the company to the original idea of Mr. Penney who did the same when he opened the stores in the early 1900s. The original store was based on and called, 'Golden Rule.'

When the pricing is stable and low, customers can depend on the company to provide a quality product and they will not have to haggle or negotiate on price. They are aware ...

Solution Summary

Pricing and integrations are examined. A report in terms of the guidelines are determined.