Components of the J.C. Penney New Business Model Paper Example

Paper Type:  Questions & Answers
Pages:  3
Wordcount:  676 Words
Date:  2022-10-19

Describe the components of the J.C. Penney new business model.

J.C. Penny's new business model comprised of a new pricing model. This was aimed to simplify the JC Penny's former pricing structure hence creating ease of customer shopping. Initially, there were great prices that were offered every day with few promotions. This led to an end to the long-term pricing wars that affected consumer loyalty and trust to JC Penny products. Through Johnson as the new company head, he spearheaded the creation of "Fair and Square" pricing strategy in 2012. This new strategy was anchored into three components; first, reduce prices up to 40% so that consumers could get fair and square every day (Ofek & Avery, 2012). Secondly was to value events like seasonal, back to school periods as well as Father's day discounts. The last component was to check on the deals on items the company is looking to liquidate every other Friday of each month.

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This enabled Johnson to implement "Happy Returns". He set out to execute a massive year plan that was aimed to re-energize as well as redesign JC Penny. He began by creating new supplier relationships with top brand makers so that he could create JC Penny's exclusive lines (Ofek & Avery, 2012). Then he revamped the company's current brands so that quality and integrity could all be achieved. He then went ahead to re-group the merchandise to minimize clutter and increase appeal. To ensure the success of the regrouped merchandise, he felt it reasonable enough to revamp the sales force.

How did all of the components work together?

The introduction of the new logo and store design is moving along and the new pricing strategy is yielding some confidence to Johnson in the brand. However, the sales structure is not for the latest changes (Ofek & Avery, 2012). Most salespersons have been angered with the discontinuation of the commission they were initially getting before the Johnson introduced the changes. Undeniably, the fair and square pricing perspective has left long-term employees angered at the change in the approach and attitude while interacting with customers.

What components, if any, are missing?

In my opinion, a large component that was missing from the model was the consumer. In the model, Johnson never accounted for the perspectives of the consumer and the impacts of these sudden overhauls. He felt it unnecessary to test the new plan with the consumers.

Explain the relationship between J.C. Penney's marketing/business model and its pricing strategy.

The new JC Penny business model had a profound relationship with the pricing strategy. This is because almost the whole model focused on the introduction of prices that would allow customers to shop favorably from the business stores. The new model moved away from the everyday pricing strategy and return to coupons and weekly advertised sales. From this, a lesson learnt was that everyday pricing is significantly aided by low prices (Ofek & Avery, 2012). This is because everyday prices were hard to execute well for JC Penny. The second lesson learnt is that the change in the business model and the pricing strategy eliminated the reference pricing for consumers. Sometimes consumers use reference prices to judge the value and quality of the products. Without this, consumers may find it difficult to judge the value of JC Penny's merchandise. Another lesson learnt is that over time, consumers and other shoppers can be trained to expect new sales events. This was the case with the changes that were introduced as shoppers later got used to them.

Explain whether J.C. Penney's brand is similar to other retail brands. Explain why or why not.

Having served at Apple and Target, it would be essential to state that Johnson brought with him his expertise and strategies in marketing success to JC Penny. It is true, therefore, during Johnson's reign, JC Penny's brand was very similar to that of the former brands he has had success with. He tried this at JC Penny and succeeded.


Ofek, E., & Avery, J. (2012). JC Penney's' Fair and Square' Pricing Strategy.

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Components of the J.C. Penney New Business Model Paper Example. (2022, Oct 19). Retrieved from

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