The Company

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 J.C. Penney and the changes to come. With a plan to create an environment more catered towards a younger audience, J.C. 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 J.C. 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 J.C. 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. J.C. 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.

Authors

Diana Gilbert: Locations and Subsidiaries, Brands, Major Products and Services, Corporate Vision, and Mission Statement

Trevor Bremer: Company’s Current Promotional Strategy, Product Sales History, Current Marketing Objective, and Media Expenditure

Marla Bernal: Company Overview, Business Description, Company History, and Key People

Professor Harry Derderian

Marketing Strategy and Design

Baker College Online

04/12/2017

References

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/

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

https://www.fool.com/investing/2017/03/31/jc-penney-buy-the-dip.aspx

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

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4164577

O'Brien, S. (2014, December 12). The History of J.C. Penney’s Stock Price Collapse. Retrieved

from http://www.dividend.com/dividend-education/the-history-of-j-c-penneys-collapse/