Explore BrainMass

Evaluating pricing strategy in the long run

I need help briefly describing J.C. Penney's new pricing strategy, and also providing background on the company and department store industry.

Will J.C. Penney's new pricing strategy work in the long run even it seems to be not working at the current stage? Consider this position in terms of environmental factors such as economy, the competition, and changing consumer behavior.

How does this pricing strategy complement J.C. Penney's new merchandising and promotion strategies? Take into account J.C. Penney's segmentation, positioning, and branding strategies to explain this issue.

What can be learned from this case? Consider this pricing issue from both short-term and long-term perspectives.

© BrainMass Inc. brainmass.com August 18, 2018, 1:50 pm ad1c9bdddf

Solution Preview


Thanks for asking BrainMass! Please see the attached document for the solution.

JC Penny New Pricing Strategy
The departmental retail industry consists of companies that sell clothing, cosmetics, footwear, and home furnishing. Main companies in departmental industry are Dillard's, Macy's, J C Penny, Sears in the United States. Over last few years, departmental stores have witnessed significant consolidation to grow the top line. The future of this industry would see down or flat sales. More stores would close or require restructuring. Departmental stores have increased competition from discount stores, online retailers and specialty stores. To ward off the competition the companies have to devise strategies which provide differentiated product line, strong customer service and strong store presence.
JC Penny had been witnessing drop in sales by as much as 25%. To redesign its business model JC Penny made announcement that company was switching to everyday low prices. The strategy called Fair and Square included three types of prices:
• Everyday regular prices
• Month-Long values
• Best Prices on 1st and 3rd Fridays of every month
With this strategy the CEO was treating the company as a startup company. With the new strategy the company also changed the value proposition from offering popular brands at discounted ...

Solution Summary

The expert evaluates the pricing strategy in the long run. How the pricing strategies are complemented are given.