Strategic Marketing Plan - Section Two
Integrated
Strategic Marketing Plan: Section Two
TaShannah
Crippen, Diana Gilbert, Marla Bernal, and Trevor Bremer
Marketing
Strategy and Design
Professor
Harry Derderian
Baker
College Online
12, April, 2017
Integrated
Strategic Marketing Plan: Section Two
The Company
Company
Overview
J.C.
Penney Corporation operates many departmental stores where merchandise and
services are distributed to the consumer.
The J.C. Penney Corporation offers both retail catalog and internet
retailing. J.C. Penney began in 1902 in
Plano, Texas selling an assortment of family apparel, footwear, and various
accessories. The company operates under
a subsidiary of the J.C. Penney Company, Inc.
Business
Description
J.C.
Penney department stores have 1,014 locations in the 49 U.S. States and Puerto
Rico. To delve into the store itself
Penney’s has several leased departments such as Sephora, Seattle’s Best Coffee,
different beauty salons, optical options and a portrait studio. Many of the J.C. Penney stores are located
within suburban shopping malls. Penney’s
is responsible for outfitting consumers with many different brands of clothing.
Company
History
J.C.
Penney’s early history and incorporation began in 1902 with James Cash Penney
who was born in Hamilton, Missouri.
After James graduated from high school he began working at a local
retailer and then relocated to Colorado because his doctor suggested his health
would improve if he was in warmer weather.
After working for a dry good store owned by Thomas Callahan and Guy
Johnson who started Golden Rule stores, Penney was transferred between Colorado
and Wyoming. Penney split off on his own
with his savings and a loan he began J.C. Penney Company on April 14, 1902 in
Kemmerer, Wyoming. To move history along by 1912 there were 34 stores in the
Rocky Mountain States.
Through
the 1960’s to 1980 J.C. Penney acquired General Merchandise Company, and in
1963 J.C. Penney issues its first catalog.
The in-store catalogs were distributed out of Milwaukee.
In
February of 1971 James Cash died at the age of 95, after his death the
company’s revenues sky rocketed to $5 billion and the companies catalog made a
profit for the first time. In 1973 J.C.
Penney had a total of 2053 stores. In
1998 J.C. Penney launched its first internet store. 2000-2009 J.C. Penney Stores began to do some
restructuring and closed some it’s underperforming stores, to the current time
where they are still closing stores trying to revamp and improve the
company.
Key
People
Current
times bring the discussion of individuals who play a key role in the
operations. The Executive Board of
Penney’s consist of the Chairman, President & CEO Marvin Ellison, Dennis P.
Miller, Senior Vice President, Michael Porter Vice President and Director
Debora A. Plunkett. These individuals
have come in to play most recently with the stock market performance of the JCP
stock shares being down more than 25%; which has forced the price of stock down
to $5.50, its lowest point in 30 years.
There are huge competitors like Macy’s, Kohl’s and Nordstrom that they
must compete with. This Executive Team
has even more difficult decision with Amazon and many online bargain stores
taking over the consumer buying power.
Locations
and Subsidiaries
Despite
plans to close 140 stores in the near future, JC Penney still has about a
thousand store locations throughout the United States and Puerto Rico. Besides the physical store locations, JC Penney
has a home office located in Plano, Texas, thirteen different supply chain
facilities, and a design studio in New York City. Merchandise is also made easily available
internationally through jcpenney.com.
Their partnership with Borderfree, an e-commerce company, allows them to
deliver goods to 80 different countries. There are also several quality
assurance offices located in different countries and an in-house global center
in Bangladesh, India. JC Penney does not
currently have any subsidiaries but they do have several private brands (J.C.
Penney, 2017).
Brands,
Major Products and Services
Part
of their recent strategy to revive the JC Penney name and regain sales was to
launch more private brands. The most
recent are The Collection by Michael Strahan, Disney apparel by Okie Dokie, and
Belle & Sky. Other exclusive brands
include Arizona, St. John’s Bay, Liz Claiborne, A.N.A. Ambrelle, Worthington,
J. Ferrar (JF), Xersion and JCP Home (Bailey, 2016). Dozens of national brands are available to
customers and they also offer many types of products for home, bed and bath,
furniture, kitchen, and appliances. Apparel includes clothing for men, woman,
and children, shoes, clothing, handbags, jewelry, accessories, intimates,
lingerie, and more. Services include salon services, photography, and optical
services (J.C. Penney, 2017).
Corporate
Vision
Focusing
on the three strategic priorities of strengthening private brands, becoming a
world class omni-channel retailer, and increasing revenue per customer is the
corporate focus of J.C. Penney (J.C. Penney, 2017).
Mission
Statement
At
JC Penney, we are on a mission to ensure every customer’s shopping experience
is worth her time, money, and effort. ‘Get your Penny’s worth’ is our brand
promise to deliver compelling value with an enticing array of private,
exclusive, and national brands (J.C. Penney, 2017).
Company’s
Current Promotional Strategy
With
a new outlook on product lines, fashion lines and a target audience as a whole,
promotional strategy is going to be very important towards JC Penney and the
changes to come. With a plan to create an environment more catered towards a
younger audience, JC Penney plans to promote a strategy very new and welcoming
towards this millennial audience. Whether it is partnerships, new store
layouts, or newly redesigned advertising and branding, a new look is going to
be promoted to rekindle the values that JC Penney once held onto. Partnerships
with these fashion lines, such as Ivy Park, are going to allow for more
opportunities with new audiences. Promotions will be run to make these fashion
lines very apparent and shine light to the new direction the company is taking.
Upon these promotions, discounts for students will be offered to strengthen the
relationship with this specific audience, and seasonal sales will still be a
very big part of the company.
Product
Sales History
It
is without a doubt that JC Penney has suffered forms of financial problems, as
well as a company low of sales records in the past few years. According to the
sales charts, JC Penney stock fell about 19% on May 16, 2012 (O’brien, 2014).
These changes were a result of new management, new ideas, and a new structure.
Sales have slowly inclined, and while some have questioned whether the stocks
will ever return to their normal rates, this is an opportunity for a drastic
change, a positive change. JC Penney is looking to switch gears to welcoming a
new audience. It will focus on the products that have sold well in the past,
eliminating those that haven’t, and welcoming new lines of clothing to test the
waters of the consumer base.
Current
Marketing Objective
As
a company, the marketing objective is substantially different than before, but
yet again still holding onto key company values such as loyalty, passion and
service. The objective is to redefine and refresh an existing brand into
something that has higher appeal and a bigger return on investment. The younger
target audience will help lead the way in the sense that they will be deciding
how the company starts to shape towards their interests, and grow alongside
modern fashion trends. New and innovative fashion lines will be the heart of
the company, while our values serve as the brain and form the structure.
Media
Expenditure
The
most important factor for the company’s media expenditure is allowing the trust
in our marketing and sales teams to welcome new fashion lines that have never
set foot inside JC Penney. The budget for these fashion lines will be a great
focus, as the partnerships with them will be too. On top of this, advertising
once the store is redefined is also a key focus. There will be many ads ran
through digital, print, TV and radio as well. Advertising to our audience will
have a significant impact on how we are perceived and judged by everyone. As
the return from the investments come in, allotting more budget towards store
design, new products and other promotions and plans will become a reality for
the company.
SWOT Analysis
In
order to fully understand the current position of J.C. Penney and the ways in
which improvement and campaign suggestions may enhance performance, it is important
to conduct a SWOT analysis of the company. Strengths, weaknesses,
opportunities, and threats both inside and outside the organization are
revealed when a SWOT analysis is conducted on a company. A SWOT analysis for
J.C. Penney is provided below.
Strengths
J.C.
Penney has various strengths that range over a variety of areas. A wide range
of products and services are offered by J.C. Penney; footwear, electronics,
clothing, jewelry, furniture, and beauty products (Global Compose, 2016). J.C.
Penney has a presence in over a thousand locations and has been known to have
great revenue performance in the past (J.C. Penney, 2017). A customer first
initiative is taken by the company and they even offer free haircuts for kids
to demonstrate this (Adam, 2015). Products and services are offered on vast
levels because of the existence of multiple retail channels (Adam, 2015).
Different private labels have been launched by J.C. Penney and the company has
a relatively balanced brand portfolio (Adam, 2015, & Global Compose, 2016).
In addition, J.C. Penney has strong service and product quality (Adam, 2015).
Despite the company’s many strengths, there are still some weaknesses that need
to be addressed.
Weaknesses
There
are some weaknesses present for J.C. Penney and this marketing plan may be able
to lead the transformation of these weaknesses to strengths over the next
couple years. Inconsistency in stores may be the cause of varied assortment
(Global Compose, 2016). Promoting a leading brand for each department that must
be carried in every store location may be a resolution for this weakness; for
example, Ivy Park may lead the active wear category and Young and Reckless the
millennial style category. Store sales have experienced a great decline for
J.C. Penney (Adam, 2015). A fresh brand reimage to better target millennials
may increase interest and result in more store sales. Additionally, current
political objectives could significantly increase store sale interest because
tax payments may decrease and operational costs decrease. Due to competitors
with similar offerings, J.C. Penney has a limited market share (Global Compose,
2016). Creating brand differentiation by promoting new millennial focus and
quality brand name additions may be a solution for this. J.C. Penney is
experiencing poor monthly sales data (Adam, 2015). Creating a campaign to get
people into the stores, perhaps a J.C. Penney exclusive replica of Black Friday
in May that targets millennial style for the summer months, based around the
new brand focus could be beneficial. Especially in emerging economies and in
comparison to some competition, global presence for J.C. Penney is low (Global
Compose, 2016). Increasing company reach by expanding online presence and
opening stores in rising developing countries could be a solution. J.C. Penney
also has various opportunities available to the company.
Opportunities
A
few different opportunities exist for J.C. Penney that should be considered to
strengthen the company and brand. Disposable income of customers is increasing
and this could be exploited by offering brands that are cost effective,
including any J.C. Penney brands, and brands that are more expensive but known
for higher quality, including the new brand choices of Ivy Park and Young and
Reckless (Global Compose, 2016). Connections with smaller retail chains are
another opportunity for J.C. Penney (Adam, 2015). Connecting with new brands
like Ivy Park and Young and Reckless to sell these brands in J.C. Penney stores
and online could better reach the millennial target audience. Especially in
emerging economies, an opportunity for J.C. Penney is tapping into the
international markets more (Global Compose, 2016). This could be accomplished
by expanding the J.C. Penney brand to emerging developing countries and adjusting
styles and partnerships to fit the consumer preference of these areas. Through
advertising and by offering services that focus on customers, J.C. Penney can
enhance its visibility (Global Compose, 2016). A new millennial
focus, increased social media presence, and development of a forum or brand
connection social platform may be a way to tap into this opportunity. A great
example of this can be seen with Ford’s social network; Ford Social. Launching
exclusive and private label brands is another opportunity J.C. Penney has
(Global Compose, 2016). Launching the new brands targeting millennials and
beginning creation of a J.C. Penney millennial aligned brand may be a way to capitalize
on this opportunity. Creation of a J.C. Penney clothing brand for millennials
will ensure targeting abilities even if partnerships with other popular brands
end. J.C. Penney could even acquire a small retain chain and venture into more
online investments (Global Compose, 2016). In addition to strengths,
weaknesses, and opportunities, J.C. Penney also faces various threats.
Threats
Threats
exist for J.C. Penney that should be considered and addressed. One threat is
J.C. Penney is losing market share to major competitors like Macys and Kohl’s
because they are expanding (Global Compose, 2016). Expanding is possible by
connecting with and adding new brands, creating a presence in emerging
developing countries, and enhancing online presence to increase company reach;
ensuring to have a website for as many different countries as possible and shipping
options available to each. An additional threat J.C. Penney faces is the
economy even though the company plays at the price point level (Global Compose,
2016). Even though J.C. Penney offers low prices on most all of their
merchandise, they need to specialize some and offer some higher end products
that consumers really desire or need in order to thrive in the struggling
economic conditions. J.C. Penney can have weak financial projection without
implementing changes and in fear of damaging their brand some manufacturers are
becoming hesitant to supply J.C. Penney; reimaging the J.C. Penney brand and
targeting a new main audience may assist in encouraging manufacturers to
continue and begin working with J.C. Penney (Adam, 2015, & Global Compose,
2016). Another threat J.C. Penney faces is the rising cost of labor in its
country of operation; the United States (Global Compose, 2016). Under the new
administration, cost of labor may become less of an issue for J.C. Penney.
However, it may be beneficial for the company to consider opening up to
manufacturing opportunities outside the United States to decrease costs.
SWOT
Analysis Chart
References
http://www.freeswotanalysis.com/retailing-swot/726-swot-analysis-of-j-c-penney.html
Bailey, S. (2016, April
20). How Private Brands Are Enhancing
J.C. Penney's Performance.
Retrieved
from http://marketrealist.com/2016/04/private-brands-enhancing-jcpenneys-performance/
Global Compose. (2016,
January 15). SWOT Analysis of J.C Penney.
Retrieved from
http://www.globalcompose.com/blog/sample-essay-on-swot-analysis-of-j-c-penney/
J.C. Penney. (2017). About us. Retrieved from
http://www.jcpenney.com/jsp/browse/marketing/promotion.jsp?&pageId=pg4003600001
J.C. Penney. (2017). Buy the Dip? -- The Motley Fool. Retrieved
from
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J.C. Penney. (2017). Company Information. Retrieved from
http://www.jcpenney.com/jsp/browse/marketing/promotion.jsp?&pageId=pg40036000011
J.C. Penney. (2017). International Deliveries.
http://www.jcpenney.com/jsp/customerservice/serviceContent.jsp?pageId=pg4006000010&lang=en
J.C. Penney
Corporation, Inc. (n.d.). American
company. Retrieved from
https://www.britannica.com/topic/JC-Penney-Corporation-Inc
J. C. Penney
Corporation, Inc. (n.d.). Private Company
Information. Retrieved from
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O'Brien, S. (2014,
December 12). The History of J.C.
Penney’s Stock Price Collapse. Retrieved
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http://www.dividend.com/dividend-education/the-history-of-j-c-penneys-collapse/
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