Strategic Marketing Plan - Section Five

Integrated Strategic Marketing Plan: Section Five

Diana Gilbert, TaShannah Crippen, Trevor Bremer, Marla Bernal

Marketing Strategy and Design

Baker College Online

Professor Harry Derderian

05/03/2017

Research Development

Marketplace Research

     The marketplace in the retail industry and the landscape that is drawn out is extremely competitive. As outlined in previous parts of our research, JC Penney’s direct competition is Kohl’s and Macy’s; based on the diversity of the product offerings, prices and their share price. 

      A majority of studies pertaining to a consumer’s most desired apparel company show that Walmart and Kohl’s are first and JC Penney and Macy’s follow in second. JC Penney has tried to consistently grab the consumer’s attention with strategies like Fair and Square price which failed and drove most of the customers towards locations like Macy’s (Why JCPenney's 'Fair and Square' Prices Are No Fun | TIME.com, n.d.). New research has helped the JC Penney team come to new campaign ideas and begin to evolve to a new consumer base. Within the marketplace there is drive to appeal to a younger more energetic customer and for JC Penney, bringing partners on like Ivy Park will potentially boost JCP’s presence in this field. 

Market Observation

      There is quite an open interest in bringing youth back to the JC Penney Company. When viewing the company’s technical performance in the market, there is a certain level of pessimism on whether to invest or not. Department stores in general are not doing well and JCPenney has pulled itself out of a serious depression and are beginning to end a long streak of loses. The company’s gross margin has largely recovered as operating costs are being cut in half (Near a 37-Year Low, Is J.C. Penney Stock a Buy? -- The Motley Fool, n.d.). Short term investors are looking for a quick profit while long term investors are looking to see growth with new campaigns and ability to move the average higher and eliminate these pessimistic positions.

Online Survey Analysis

      Using statistical tools, JC Penney can view their growth and decline by reviewing their sales and from the chart below ("JCP Latest News & Analysis - J.C. Penney Company Inc. | Seeking Alpha," n.d.) we as a company need this new Ivy Park campaign to implement growth with sales. 

Marketing teams expect that with the Ivy Park campaign, the expanding rewards program, using youthful mobile applications, and doubling the incentives will help to bridge the gap that the company has with its customers. We have found with surveys that our customer find the old JCPenney is lacking judgements and feeling ("JC Penney Consumer Analysis -," n.d.). Using www.talktojcpenney.com, customers can speak their opinion by entering their receipt number and earning a discount towards the next shopping trip. The conclusion of many statistical results is that the company must attract younger customers. 

Precedent Studies

Advertising Strategy

          The advertising strategy is a very important part of the plan. This strategy will pull in audiences that JC Penney has not had before, and to do that there needs to be an appropriate plan, style and feeling portrayed. To start the strategy, both push and pull marketing will be focused on, with an emphasis on pull marketing. Since the company has not seen brands like Ivy Park before, the new style will draw attention of millennial shoppers and seek their interest.

            “Another example is the presence of manufacturers' representatives in retail outlets, such as a rep doling out free samples of a new food product in a supermarket.” (Kibilko). Much like this example, JC Penney can have select stores in key areas with high populations to have specific sales reps for brands like Ivy Park. These reps will have advertising booths that have discounts and programs for customers practicing brand loyalty. This is just one form of mixed push and pull advertising among many others that will be implemented.

            A specific style of advertising will be in place with co-op characteristics with these brands. Funding will also be a joint effort to cover expenses, promote great brands, and draw more customers back to this shopping experience. Mediums for advertising will include: magazine ads, large banner ads near JC Penney locations or inside malls or outlets, Television ads, Spotify ads, and digital web ads. These mediums are specifically chosen to target the fast and active millennial audience that enjoy great brands.

            Stylizing of advertisements will carry the sleek and minimal JC Penney branding, along with co-op standards for selected fashion brands. The advertisements will focus on a clear message: how this clothing will appropriately fit into their active lifestyle and draw them into physical or digital stores. An example of this advertising was created and is seen below:

 

Precedent Studies

      Looking at the previous studies of the history of JC Penney is an important role in the restructure of the new marketing plan and company. In an interview with Rajiv Lal, some major issues were discussed about the fall and decline of JC Penney’s sales. “That comes out to sales of about $150 per square foot, which is probably in the lower third of department store sales, if not the lowest. In contrast, competitors like Macy's and Kohl's have sales of around $220 or $230 per square foot. (Rajiv Lal, 2013). Lal is trying to portray the comparison of the company with competitors such as Macy’s and Kohl’s. This was a time of struggle, as retailers were fighting over customers due to the exit of the recession.

      “To fix the problem of sameness and make it appealing for customers to come into the store, he came up with the idea of unique boutiques within each JC Penney -- the store-within-a-store concept.” (Rajiv Lal, 2013). Lal explains that JC Penney had brought themselves back from the decline by implementing ideas of specialty stores within their stores. These ideas can very much relate to the concept of bringing on fashion lines with high emphasis and focus for the new audience.

      Other selling methods were discussed in the interview such as selling price points and the timeline in which those took place. CEO Johnson would implement a pricing strategy to have customers purposefully not interested in products for the first few weeks, and then prices would drop and it would draw interest. He eventually chose to cut to the point and do this right away, leading to an initial drop in prices to draw attention, fighting the competition more strategically.

Marketing Programs and Marketing Strategies

Advertising

      A long-term pull strategy with the objective of providing an emotional reason to purchase is advertising (Boykin, 2017). One advertising campaign JC Penney can run is sponsoring a district track and field competition or event where it is approved for pictures and videos to be taken by JC Penney to be used in the advertising campaign. These pictures and videos can not only be used in the traditional television advertisements but can be used on social media networks like Instagram, Facebook, and Twitter to achieve the marketing objective of enhancing the company’s online presence and reaching millennials. In addition to this campaign, JC Penney can have one of their new lines be active wear for men since Ivy Park is aimed toward women and advertise this side-by-side the Ivy Park campaign. JC Penney always run the "Penney Advertising Strategy" for a short time span in a buy a product; get a product for a penny format (Pasquarelli, 2016). In addition to this format, it may be beneficial to try using the "Penney Advertising Strategy" in a customer loyalty program approach. Customers that spend over a set amount, for example $50 to $100, get to choose an item that will only cost them a penny. Customers that remain part of JC Penney’s customer loyalty program for a certain amount of time, for example every three to six months a customer remains a member, would also receive an item that will only cost them a penny. Television advertisements and digital media advertising will be the main channels used to launch these programs and strategies. In combination to the advertising strategies and programs, it is important to have sales promotions in place.

Sales Promotions

      In addition to advertising, it is important for JC Penney to have a sales promotion strategy. For products normally sold in retail environments, consumer and trade promotions are used often to help drive short-term consumer demand (Boykin, 2017). Aligning and integrating consumer and trade promotions with other marketing activities generally work best to accomplish short-term marketing objectives (Boykin, 2017).

Consumer

      A marketing technique used to influence customers to purchase a product or service is consumer sales promotion (Joseph, 2017). Promotions are often used to achieve a specific purpose, releasing a new product or increasing market share as examples, and last for a set period (Joseph, 2017). Various promotional techniques can be used by product or service sellers and manufacturers; sampling, free trial, free gifts, contests, and special pricing (Joseph, 2017).

      To accomplish the marketing objective of reaching millennials and promoting the Ivy Park fitness line, in addition to the new JC Penney men’s fitness line, one consumer marketing program suggested in this plan is to provide one low-cost item of Ivy Park gear to all track and field participants of the advertising campaign mentioned above. An example of a low-cost Ivy Park item could be a water bottle; if JC Penney were to provide the water and refreshments for the entire event it would also appeal to millennial’s desire for businesses to display social good deeds (Donnelly, 2016). Another example of an Ivy Park item that could be used is a t-shirt or tank top. In addition, JC Penney could have booths set up at the event where additional Ivy Park, JC Penney men’s fitness clothing, and more merchandise can be purchased.

      To accomplish the marketing objective of enhancing the company website and increasing traffic to it, JC Penney could offer special member options on the website that all have a free trial and differing levels of exclusive access to coupons, BOGOs, special pricing, contests, and more. In addition, JC Penney will begin running contests with the prize of free gifts and sampling on their various social networks; Instagram, Facebook, Twitter, Snapchat, etc. An example of a contest could be the best picture posted on Instagram wearing the new Ivy Park or JC Penney men’s fitness line wins a special JC Penney product package; this will get millennials not only talking about JC Penney clothing lines but wearing them and sharing their experiences. Another important consideration for JC Penney is the trade side of sales promotions.

Trade

     Executed between retailers and manufacturers are marketing activities considered trade promotions (Boundless, 2017). Assisting companies increase the product purchase rate, differentiate a product, and increase product availability is what trade promotions do (Boundless, 2017). Due to limited space on retailer shelves, it is sometimes necessary to encourage the stocking of JC Penney designs over competitor’s designs (Boundless, 2017). To meet this goal, JC Penney can offer free or heavily discounted space for brands like Ivy Park and offer front of the store displays in exchange for the partnership deal and Ivy Park joining promotion efforts for JC Penney’s men’s fitness line. To encourage retailers to sell products, trade contests are used and the retailer often wins a prize (Boundless, 2017). JC Penney could host special versions of the “Black Friday” annual shopping spree during times like back-to-school and before summer begins. Not only would this attract millennials, it could be used to encourage manufacturers and partners to compete on discounts to win a prize like front of the store positioning for three to six months.

Public Relations

      Public relations are focused on getting connected with the modern consumer, the millennial generation with the idea that JCPenney is more than just a big business.  It is a shopping experience with the latest fashion with a company that values its customers, is interactive and socially responsible.  The way that the message is delivered is important in marketing to this new segment.  This is a generation which is used to being exposed to several types of digital media per day and prefer to obtain most of their information via email, social media and other online sources.

      Millennials want the latest trends but also wish to connect with a company on a more personal level.  Per a study, by LEK consulting, “62% of millennials agree that if a brand or business engage with them on social media, they’ll be much more likely to become a loyal customer- which could be great news for your business” (Cole, 2016).  The public relations goal is to reach the millennial generation by using several forms of media including digital marketing, e-mail and social media interactions including encouraging the customer to share comments or pictures of themselves wearing the Ivy Park and other JCPenney attire to the page.  Through personal sales, social media interaction and push and pull marketing we aim to target this market in our campaign to attract a new generation of loyal customers.

Personal Selling

      Per a study, millennials want more than to just find a good deal, “In terms of how you appeal [to millennials]," he says, "one of the things we’ve found again and again—and we just commissioned [a study about this]—is the value of experiences. This is across all generations, but it’s much more pronounced among millennials: People want experiences more than things" (PR for Millennials, 2013).  The aim is to give an experience to the modern consumer through great service which is personalized to their needs which will make them loyal customers.

      The opportunity for improving personal selling and the experience of it is the introductory event of the Ivy Park line.  The popular stores are adding special booths for a limited time including sales reps to help customers choose the right Ivy Park look for them and special offers and perks for registering as a JCPenney customer with an email.

Direct Marketing

      “Direct marketing occurs when businesses address customers through a multitude of channels, including mail, e-mail, phone, and in person. Direct marketing messages involve a specific “call to action,” such as “Call this toll-free-number” or “Click this link to subscribe.” The results of such campaigns are immediately measurable, as a business can track how many customers have responded through a message’s call to action” (Direct Marketing, 2016).

      Marketing directly to the customer is the key to gain the attention and loyalty of the modern consumer.  Through personal selling in the stores, e-mails, and social media the customer will stay connected to the company by receiving current information on latest sales and offerings for their favorite products.

References

Consumer & Trade Promotions As Marketing Strategies | Chron.com. (n.d.). Retrieved from http://smallbusiness.chron.com/consumer-trade-promotions-marketing-strategies-71109.html

Consumer Sales Promotion Techniques | Chron.com. (n.d.). Retrieved from http://smallbusiness.chron.com/consumer-sales-promotion-techniques-1035.html

Digital PR for Millennials: How PR is Evolving. (n.d.). Retrieved from https://www.hallaminternet.com/digital-pr-millennials/

Direct Marketing | What is Direct Marketing? (n.d.). Retrieved from http://www.marketing-schools.org/types-of-marketing/direct-marketing.html

How Can Retailers Use Push & Pull Advertising? | Chron.com. (n.d.). Retrieved from http://smallbusiness.chron.com/can-retailers-use-push-pull-advertising-17743.html

JC Penney Consumer Analysis -. (n.d.). Retrieved from https://portfolios.journalism.ku.edu/sookie-thongkham/2015/07/31/jc-penney/

JC Penney Puts the Penny to Work in New Campaign | CMO Strategy - AdAge. (n.d.). Retrieved from http://adage.com/article/beat-sheet/jc-penney-puts-penny-work-campaign/302808/

JCP Latest News & Analysis - J.C. Penney Company Inc. | Seeking Alpha. (n.d.). Retrieved from https://seekingalpha.com/symbol/JCP

Marketing to Millennials: 5 Massive Trends That Are Leading the Way. (n.d.). Retrieved from https://www.shopify.com/blog/75614533-marketing-to-millennials-5-massive-trends-that-are-leading-the-way

Near a 37-Year Low, Is J.C. Penney Stock a Buy? -- The Motley Fool. (n.d.). Retrieved from https://www.fool.com/investing/2017/03/14/near-a-30-year-low-is-jc-penney-stock-a-buy.aspx

PR for Millennials: The Five-Factor Recipe for a Winning Campaign | Bulldog Reporter. (n.d.). Retrieved from https://www.bulldogreporter.com/pr-for-millennials-the-five-factor-recipe-for-a-winning-campaign/

Trade vs. Consumer Promotions. (n.d.). Retrieved from https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/integrated-marketing-communications-12/selecting-the-promotion-mix-for-a-particular-product-84/trade-vs-consumer-promotions-426-4129/

Why JCPenney's 'Fair and Square' Prices Are No Fun | TIME.com. (n.d.). Retrieved from http://business.time.com/2012/03/29/maybe-shoppers-dont-want-fair-and-square-prices-after-all/