J. C. Penney: Reinventing Fair and Square Deals (a)

Abstract

The new CEO and the new president of the J. C. Penney Company, Inc. (JCP), invigorate the company with a new pricing strategy based on “Everyday Fair Prices.” Is the initial market reaction an indication of likely success? This first part of a two-part case contextualizes the initiative and provides a means of exploring differentiation in an evolving market.

Excerpt

UVA-M-0835

Jul. 20, 2012

J. C. PENNEY: REINVENTING FAIR AND SQUARE DEALS (A)

Pricing is actually a pretty simple and straightforward thing.

—Ron Johnson, J. C. Penney CEO

The big week—and a troubling fiscal year—had finally come to a close. Two days earlier, on January 25, 2012, at a well-orchestrated, Apple-like event on a pier overlooking the Hudson River in New York City, Ron Johnson and Michael Francis, the newly appointed CEO and president of the J. C. Penney Company, Inc. (JCP), respectively, had outlined their innovative new plan to invigorate the company: a three-pronged pricing strategy based on “Everyday Fair Prices.” There would be no more coupons, no more holiday sales that forced customers to get to the store in the early hours of the morning, just “Fair and Square” pricing. The new pricing strategy would take effect in all JCP stores across the nation on February 1, 2012, only a few days away.

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Keywords: positioning