Strategic Marketing Plan - Section Four

Integrated Strategic Marketing Plan: Section 4

Diana Gilbert, TaShannah Crippen, Trevor Bremer, Marla Bernal

Marketing Strategy and Design

Baker College Online

Professor Harry Derderian

4/26/2017

Consumer Characteristics

With the gradual transition and emphasis on selling some of JC Penney’s products online, there are many characteristics and trends to understand about these frequent buyers. According to the study of several factors of online consumers, consumer styles inventory, brand consciousness, quality, fashion and brand loyalty are just some traits that simulate online apparel shopping (Wagoner, 2014). With the success and turnaround that JC Penney has had, the company is not only aiming to sell to local individuals but also those across borders. Shopping online has drawn in over 40% of consumers already.

            Focusing in on the characteristics of shopping will show that consumers have methods to their purchases. Often a consumer will understand their desire for a purchase, apparel in this case. The next step would be referring to the internet for more information on the product. Many sites such as Amazon lead to unbiased reviews that clearly show if a product is succeeding. After information is gathered, prices of competitor’s outlets will be determined and narrowed to a greater buying choice. Settling for a certain specific product or brand will follow, and then the initial purchase as well. Through time, the consumer evaluates the product and chooses whether or not to keep buying from that brand, which in the end develops or breaks brand loyalty.

There are many characteristics of the consumers of JC Penney, and it is important to observe and utilize these characteristics. Not only using these traits for a better business and product line for JC Penney, but a model that benefits and treats the customer perfectly. This model will not only be used in online stores, but in physical stores just as equally, so that the customer feels respected.

Demographics

Without a doubt, JC Penney is going through some significant changes in their demographics. Ranging from older married couples in the past to the new youth now. There has been a great change and focus of efforts through the entire business model. “It’s no secret that the future for the department store category (if there is one) is with the millennial consumer who is fundamentally about omnichannel connectivity” (Stein, 2016). This explains that millennials are looking for multiple methods of purchasing, and different channels.

These groups represent the new age of JC Penney’s audience. Customers might be in their late teens or twenties, work jobs, and continue their education. These are males and females who both want style and affordability, with ease of access to purchases either in store or online.

The demographics have changed, but the values remain true to serving customers and offering the best possible fashion lines for their desires. Over time, these demographics will help shape, grow and change the way JC Penney creates business, and it is an integral part of the future of the company.  

Psychographics

Not only are the demographics of the target market important but going a step further to understand the psychographics will give a competitive edge into marketing to them.  “Psychographic segmentation categorizes your customers by their personality, interests and other factors. This can be a powerful way of marketing the same product to people from otherwise dramatically different demographics” (Local Directives).  Since the objective is to redirect the focus to attracting the millennial generation, it’s important to find out what causes them to buy.

According to the  2015 Deloitte Millennial Survey, millennials feel that “an organization’s treatment of its employees is the most important consideration when deciding if it it’s a leader in its field. They then consider its overall impact on society, financial performance, its record for creating innovative products or services, and whether it has a well-defined and meaningful purpose” (Marketing to Millennials, 2015).  Because the most important factors in purchasing from a company tend to be more motivated by these factors it is important to make sure that we are presenting to them a company that they feel good about supporting. JCPenny is a very environmentally conscious company which received an Energy Star award in 2016 for sustainability and that they have a goal to recycle 85% of its waste by 2020 (jcpenny.com) and the JCPenny ‘Warrior Spirit’ culture which is all about excellence in customer service are two marketing points to focus on that will make the millennials feel good about supporting the company (jcpenny.com).

Millennials spend a great deal of time on the internet watching movies, videos and on social media.  Technology is the key to getting the most exposure with this target market.  Advertising through these channels with a consistent message of excellent customer service, commitment to sustainability and keeping up with the current styles is a guaranteed way to appeal to this market as more than just another big company. 

Stakeholder Characteristics

According to the business dictionary from Colombia University, a stakeholder is defined as, “any person group or organization that has an interest or concern in a business” (Colombia University).  These stakeholders can be creditors, directors, employees, shareholders, suppliers and the community in which it operates (Colombia University).  JCPenny’s stakeholders have had much to be concerned about over the last several years as the company has reorganized, made major changes to its structure and now stand to close over 100 stores in the near future.  From the perspective of the target market, this may be a real issue as mentioned above that the millennial generation values the treatment of employees as a top priority for supporting a company.  With the closing of these stores, many employees are sure to lose their jobs and be unemployed or misplaced.  The way the employees are treated throughout this change including the type of severance packages that they are offered could be a major deciding factor in the opinions of the target market.

Through targeting consumers who are actively a part of the social, mobile and interactive, evolving market, JC Penney will provide a way for consumers to engage in their shopping experience. By designing a way for women to personalize their shopping style and demands, JC Penney will ensure that consumers can be as engaging as desired. JC Penney will become more aesthetically appealing both in stores and in their creative advertisements to develop memorable connections between JC Penney and their consumer needs.

JC Penney will improve the store layout, making it more approachable, inviting and shopper-friendly to consumers.

Primary Target Audience

For JC Penney to fully grasp their needs and begin to develop their primary as well as secondary target audience it is truly helpful it they look at the demographics of the consumer base.  Per Bloomberg JC Penney’s are an older generation of individuals over the age of 55 and are not a part of America’s elite country club class.  Most Penney’s customers make less than $35,000 per year ("J.C. Penney's Shoppers Are Older, Poorer Than You Thought - Bloomberg," n.d.).   For JC Penney to begin to get itself out of their sales rut, as a group it is important to look for new ideas and possibly reaching a new generation. 

With new changes and data showing that JC Penney needs to begin to branch out the primary target audience will now be a millennial generation those individuals aging from 16 to 30.  With the chosen new clothing line by Beyoncé.  The younger generation is in sear of current events and the newest most cutting edge item.  The use of fashion displays will come in to play so that the new customer base can see what these new product lines will look like.  Lastly as an effort reach out to our primary target audience we will be boosting our internet presence to which we have lagged the competition for many years.  The internet sales will be advertised via Facebook or other online outlets to be seen and heard by teenagers.  With these new initiatives is intended to create excitement and give the new younger consumer a reason to shop.

Secondary Target Audience

Secondary target audience is basically the second most important consumer segment to the company. 

It is important to remember that JC Penney’s does not want to eliminate its older generations as they could still make a quite a bit of profit from those sales.  JC Penney’s will still work to appeal to their older more dedicated customer base.  JC Penney’s has been a huge hit with Hispanics and other multi-cultural shoppers that are particularly devoted and take advantage of the discount home departments and appliances (Loeb, 2016). 

Strategic Target Audience

Understanding the target audience of a business is vital to achieving success. Further, determining and evaluating a strategic target audience can give organizations a valuable competitive advantage. Acquiring customers can be a challenge for any business and when marketing to multiple demographics it can become even more difficult (Lister, 2017). Differing target audiences respond and react to different things (Lister, 2017). Millennials and baby boomers, for example, will both react and respond differently to social media advertisements that reach them (Lister, 2017). Baby boomers may value hard work and brand loyalty while millennials value speed and the latest technological advances (Lister, 2017). Considering the importance of developing an understanding of the target audience, this section of the marketing plan will identify the proposed primary and secondary target audience for J.C. Penney.

Proposed Primary Target Audience

Using generational segmentation, the proposed primary target audience for J.C. Penney is millennials. Currently, J.C. Penney focuses a lot of its marketing efforts on generation x; even more specifically, women that are mothers and apart of generation x. United States households that are middle income are primarily served by J.C. Penney, at the present (Thongkham, 2015). Middle income mothers that provide and care for their families are the main target audience for J.C. Penney’s current affordable apparel (Thongkham, 2015). It is suggested in this marketing plan, to increase sales and more, that J.C. Penney change their current primary target audience from middle income, generation x mothers to millennials. J.C. Penney would not remove generation x mothers as a target audience completely but would focus on them as a secondary target audience and make millennials the primary target audience.

Millennials

Slowly out-numbering the baby boomer generation and taking over the workforce is the millennial generation that was born between 1981 and 1999 (Lister, 2017). As baby boomers are reaching the end of their lives, the millennial generation is becoming closer and closer to being the largest generation. Having more people to market to for organizations can mean more leads and then translate into more sales and opportunity. According to the Huffington Post, the most influential and largest group in terms of employment and consuming is millennials; representing just under two and a half trillion dollars in spending power, $2.45 trillion (Mak, 2016). As a result of entering the workforce as the economy crashed, millennials are the generation with the most entrepreneurs (Lister, 2017). Working toward creating a brand aimed directly at millennials may appeal to the entrepreneur within them and give J.C. Penney some competitive edge. Millennials are said to value economics less than social issues (Lister, 2017).

While tending to spend large amounts when actually shopping, millennials are also the least frequent in-store shoppers (Lister, 2017). Shopping ease, personal recommendations, and online shopping opportunities are what the millennial generation is most responsive to (Lister, 2017). Learning what millennials are most responsive to helps explain the need for J.C. Penney to focus more efforts on their online presence, especially their website and social media pages. Traditional marketing tactics are still not working with millennials and they are remaining unresponsive (Lister, 2017). Facebook may influence where millennials find their hair stylist, Instagram pictures could influence where the generation chooses to eat, and millennials are increasingly having groceries delivered to their home (Lister, 2017). It will be essential for J.C. Penney to have a strong social media presence and market through these channels to the millennial target audience. J.C. Penney campaigns ran through Instagram, Facebook, Twitter, etc. will appeal to the generation and encourage engagement.

One major concern with online clothing purchases is not being able to try something on before purchasing and the potential difficulty of return; this will make it important for J.C. Penney to ensure their return policy is flexible and easy for online customers. Ensuring these factors can give J.C. Penney a much better chance of reaching and maintaining the millennial target audience. To reach millennials J.C. Penney needs to focus on innovation with a new brand line, connect through social media incentives and promotions, use loyalty programs and rewards, have a strong review board in place, and consider podcast advertisements or even channels (Lister, 2017). In addition to the proposed primary target audience, J.C. Penney needs to consider a proposed secondary target audience.

Proposed Secondary Target Audience

Generation X

Born between 1965 and 1980, generation x is the smallest generation and now reaching the peak of their career while trying to juggle homeownership and child care (Lister, 2017). Pessimistic about having enough money to retire, this generation remembers the rise of video and fall of radio (Lister, 2017). J.C. Penney has been relatively successful in reaching the proposed secondary target audience with their low prices and varied offerings. That said, generation x is quite active on social media and close to millennials in using and understanding technology (Lister, 2017). Strengthening J.C. Penney’s social media presence will significantly enhance the company’s ability to reach and sustain this customer base. Generation x has fully embraced online shopping but also still enjoys trips in-store (Lister, 2017). Therefore, J.C. Penney physical stores will not fully demise but may significantly decrease in number over the years. To reach generation x, J.C. Penney should consider lifestyle nurture programs and vacation opportunity promotions (Lister, 2017). Perhaps offering a vacation reward for the highest amount of referrals reported for the new Ivy Park clothing line would increase awareness and revenue. Additionally, J.C. Penney needs to continue to reach generation x consumers through direct mail and coupons (Lister, 2017). In addition to generation x and millennials, J.C. Penney should consider more refined target audiences like healthy lifestyle and fitness advocates.

Healthy Lifestyle and Fitness

Millennials and generation x are increasingly becoming fitness and healthy lifestyle minded. An increase of spending in one category, wellness, is exhibited by the often conservative spending millennial (Cohan, 2015). Millennials are likely to link exercise and eating right with the definition of healthy unlike some older generations who may view it as more just not being ill (Cohan, 2015). Using creative group fitness formats, a drive for professionalism and education, and dozens of specialized offshoots in the growing world of personal training generation x has enthusiastically shaped the fitness industry (Vogel, 2011). Less time-consuming, simpler fitness formats is what generation x instructors seek based on today’s trends (Vogel, 2017).  Clients of generation x, like millennials, appear to have a preference for that same freedom of choice (Vogel, 2017). Introducing the Ivy Park line will appeal to generation x and millennial target audiences.

References:

Cohan, J. A. (2015, March 30). MILLENNIALS AND FITNESS: GENERATION WELLNESS. Retrieved from http://asweatlife.com/2015/03/millennials-and-fitness/

Colombia University, Business Dictionary. Retrieved from: http://www.businessdictionary.com/definition/stakeholder.html

https://portfolios.journalism.ku.edu/sookie-thongkham/2015/07/31/jc-penney/

J.C. Penney's Shoppers Are Older, Poorer Than You Thought - Bloomberg. (n.d.). Retrieved from https://www.bloomberg.com/news/articles/2013-04-10/j-dot-c-dot-penneys-shoppers-are-older-poorer-than-you-thought

JCPenny.com. About us. Retrieved 4/5/2017 from http://www.jcpenney.com/jsp/browse/marketing/promotion.jsp

Lister, M. (2017, March 27). Generational Marketing: How to Target Millennials, Gen X, & Boomers. Retrieved from http://www.wordstream.com/blog/ws/2016/09/28/generational-marketing-tactics

Loeb, W. (2016, December 5). J.C. Penney Must Attract Millennials Or Perish. Retrieved from https://www.forbes.com/sites/walterloeb/2016/12/05/j-c-penney-struggles-with-its-aging-consumer

Mak, P. (2016, January 15). Millennial Shopping Habits Are Changing Fashion - Here's How. Retrieved from http://www.huffingtonpost.ca/2016/01/14/millennial-shopping-habits_n_8980380.html

Marketing to Millennials: 6 Studies & Reports You Need to Read.  July 14, 2015. Retrieved    from: https://www.sprinklr.com/the-way/marketing-to-millennials-studies-reports/

Psychographic Market Segmentation: What Is It?. Retrieved 4/24/2017 from https://www.localdirective.com/what-we-do/market-segmentation/psychographic/

Stein, S. (2016, April 12). What’s Ahead for JC Penney?. In The Robin Report. Retrieved April 24, 2017, from http://www.therobinreport.com/whats-ahead-for-jc-penney/

Thongkham, S. (2015, July 31). JC Penney Consumer Analysis. Retrieved from

Vogel, A. (2011, June 30). Generation X: From Slackers to Stars, the Future of Fitness. Retrieved from http://www.ideafit.com/fitness-library/from-slackers-to-stars-the-future-of-fitness

Wagoner, L. (2014, November 18). The Dynamics of Buyer Behavior and Online Retail (in the Apparel Industry). In Customer Think. Retrieved April 24, 2017, from http://customerthink.com/the-dynamics-of-buyer-behavior-and-online-retail-in-the-apparel-industry/