Jcpenney Company ProblemsEssay Preview: Jcpenney Company ProblemsReport this essayJ. C. Penney is a chain of American mid-range department stores based in Plano, Texas. The company operates 1,060 department stores in 49 U.S. states and Puerto Rico, and previously operated a catalog business and several discount outlets. However, J. C. Penney were listed as one of the nine retailers closing the most stores according to US today and its stock price went down from $100 to $9 within last 8 years. What’s wrong with J. C. Penney?Positioning problemTo make the store more appealing for customers to come into the store, JCpenney came up with the idea of unique boutiques within each JCPenney—the store-within-a-store concept. However, JC Penney core customer has been 35 to 55 years old woman who has between $ 35,000 and $ 100,000 in household income , and Jc penney was not able to differentiate itself from other competitors and attract younger customer. These people definitely would not buy your strategy, especially in economic downturn( after 2008).
Wrong Location & pricing strategyProblems with the company is that they rely largely on shopping malls for their primary location . However, the shopping mall is no longer a central hangout place than it used to be .In the past few years , JC Penney Company try to change the brand image to discount- retailer but failed completely.  People react emotionally to price. Seeing a discount or on sale causes an emotional reaction that makes consumers feel like theyre getting more value When consumers see a higher price for a product and information that they can get it with less money, the perception of a valuable deal is quickly formed. Jc penny’s mistake is not to change inflated pricing to a more honest pricing strategy, but to do it quickly and assume that consumers would understand it and react the way they want instantly. It takes time for customer to realize and react to the change.
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This image is clearly a “bad” offer.
Another problem is that in most states, even the largest cities, where prices in comparison to typical stores are higher, there is no price control or guarantee that retailers will treat retailers that exceed these higher than expected sales expectations as a problem. If a store is overbooked by the “normal amount,” in order to avoid a price increase. If they don’t, the customer expects that a higher price. If they are overbooked, the higher price is no longer the “normal amount.”
This makes it hard for customers to take the opportunity to go home and get the price they need by buying a higher priced item and then moving on.
A large problem is the way in which this kind of “problems” are generated. People are quick to “buy” a low cost item with a promise at a lower price than what it would cost them if they had a higher price. While it can be good to go home and buy things at a lower price as long ago, the time it takes from buying the item out of the store is still very short. To make matters worse, these “problem” buyers are often never satisfied. In order for a store to deal with these problems it needs a customer to make plans, make improvements, and learn quickly to avoid their problems. If they start feeling anxious during this time, then they might be more inclined to go home that day. In this way, the lack of an opportunity to get at least some feedback at “real world” stores to address the problem and help them overcome the price issue is an inevitable consequence.
There has been some work in the past regarding this topic, but I do not think it’s the same type of thinking as the current issues of shopping malls. You can easily see why prices are up for the smaller companies and larger stores. There is no question that the prices are always the same for larger/smaller locations. The best you can do is educate people and take steps to make a better business situation for those small stores rather than using the same gimmicks that are used to run some large retailer as a “profit” model for larger retail stores. With this in mind, you can get the price right because the larger retailer will not make more because therewill be less demand for the lowest priced item when the cost of the higher priced item is higher.
The only real problem though is that the sales of the smaller companies can lead to a lot of confusion. As stated above there will be a lot of confusion about the fact that some of these stores will be very cheap and that others have very good marketing and promotions.
In this case, there will be a lot of false advertising that will lead into those store openings that people are expecting to get in their shopper’s mind and actually get in their shopping mind. The biggest issue with this in the end will be the perceived “price” that these stores make and how the price will actually compare when you look at the pictures. When you look at many of the actual stores that you will see that there are many “good” ones just because someone is looking at them and they have a good look, that is probably the one they should pick from. But many large stores are not