Term Paper On Pricing And Marketing Plan Implementation

Type of paper: Term Paper

Topic: Customers, Strategy, Business, Pricing, Company, Wall Street, Marketing, Competition

Pages: 4

Words: 1100

Published: 2020/09/29


Pricing and marketing plan implementation is a crucial process for any business to be able to cope with the changing environmental factors such as competition, economy and the changing consumer behaviors. For any business to survive, it must have a framework that defines their current pricing strategy depending on the changing environmental so as to be ahead of their competitors.

Jonson’s pricing strategy

In 2012, Johnson Company announced that it is marking down on its products by 40 percent so that all buyers can no longer have to wait for a sale to get at its minimum. This strategy was aimed at getting rid of sales offered each year by adopting a simpler approach to pricing. They decided to roll out a three-tied strategy that bargains for everyday low pricing daily, monthly discounts on selected merchandise, and clearance strategies known as “Best Prices” during in the first and third Friday in each month when most shoppers have been paid.
This plan was proposed because the store was experiencing hard times when trying to discourage shoppers from profit-busting bargains that most of them expect in a weak economy. The move was risky for the business as buyers who like to bargain were not welcomed by missing the ecstasy they were bound to get from the feeling that they are receiving a real deal.

The company’s background

The company is a chain of mid-range departmental stores located in Texas, America. The corporation has 1060 departmental stores operating in 49 states of America and it’s only in Hawaii and Puerto Rico that it has no outlets. Their stores are located in suburban shopping centers unlike before 1966 when they were located in downtown areas and this is due to the fact that they became more popular in the latter half of the 20th century. In the recent years, the company’s chain has continued to follow the purchaser traffic, embracing the retailing the trend of establishing standalone stores near their competitors so as to counter the stiff competition. Since 1988, the company has been retailing most of its products online and it has been able to streamline its catalogue while it’s still going through renovation to improve at store level.

How Company’s pricing strategy will work

The company adopted the sale prices to be everyday prices. The store decided to make use of last year’s sale figures to reduce all rates at 40 percent or lower than the prices of the previous year. This enabled the price of a cloth that was going for around $14.99 to be $7 according to “Every Day” price and many customers were attracted since the price was slashed.

Fewer prices

The vendor would select the items that should be sold on every month for a “Monthly Value.” Let’s say in February, jewelry might be sold a lot because of Valentine’s Day and during December, many Christmas decorations could be sold. Merchandises that don’t get high sales will be put on clearance and labelled “Best Prices” an indication to customers that it’s at the lowest price so that they can come and purchase.

New tags

The salesperson used to stack markers on price tags to show each time a product was marked down. When a piece gets a new price, it also gets a new tag and different colors are used. Red tags show “Everyday Prices” whereas white tags and blue tags indicate “Monthly Value and “Best Price” respectively.

Simpler pricing and new advertising

J.C. penny will consider using the whole rounded figure when allocating the price of each item. Buyers won’t see cases where a cloth goes for $20 but on the price tag it is indicated as $19.99. There will be also an advertisement showing buyers blaring “NO” to giving of discounts in their mailboxes, sales signs and coupons.

Reasons why Jonson’s pricing strategy failed

Jonson’s strategy was a failure because of the environmental factors such as economy, competition and the changing consumer behaviors. During a slow economy, consumers are likely to be more concerned with other things such as job stability and in turn be cautious when spending which leads to small decrease in revenue for a business. Profits realized in decreased and therefore J.C Penny started facing low turn down in number of customers. This limited their ability to attend to their customers and therefore their rivals gained advantage over them. Their competitors gained advantage over them because they relied too much on giving discounts and when they did away with that strategy, their customers started to visiting stores that awarded discounts on items. Consumer behaviors change according to taste and quality of items. During Jonson’s reign, customers often complained of poor quality clothing and lack of preferred clothing line. Although they introduced, other clothing lines that were famous, shoppers could also find them in other stores at a cheaper price. Such factors led to the pricing strategy not to work for the J.C Penny (Reingold, J., Jones, M., & Kramer, S, 2014)
J.C. Penney's segmentation, positioning, and branding strategies
According to Lublin, J. S., & Mattioli, D. (2011) the concept of positioning, segmentation, and branding has been used as a marketing mantra for a long time because the needs of customers vary. J.C Penny could have improved if they could have considered the following mantra. It is with this fact that Johnson’s strategy could have done better when compared to J.C.Penny.


The change of name JCP from J.C.Penny could have worked. This could be used to imply that the company is improving and growing. They could also try to use slogans that are simple such as “fair and square” so as to attract the middle class Americans who comprise the bulk of JCP audience. This particular group tends to be more humble than hip and cool.

Positioning objective

They should have provided their customers with competitive and timely selections of quality merchandise that is fashionable. With such framework, they would be able to position J.C.Penny in a niche that is of their own exceeding quality, fashion, service components and selection of the discounter.


They could try and serve all customers segments because concentrating on a specific segment implies that you are not focusing on another segment. This was necessary because choosing a particular segment that concentrates on the core competencies and assets of the company on which it can be used to create higher values comparative to competition.
J.C. Penney’s current pricing strategy and five year period forecast.
The company rolled out a new strategy in January and eliminated the use of coupons, a move that was implemented by Macy in 2007 to persuade unhappy customers who had snubbed the mall. Most of the items at Penney are sold at 50 percent profit discount from the marked price. Such frameworks tend to bring customers more often and they find a more suitable piece of merchandise rather than waiting for the next sale. In five years to come, the Penney company will be ahead of their rivals and because they would have reclaimed their once loyal customers who had resorted to other stores. This is a result of the current pricing strategy that has proved to be very effective. They also have considered venturing into other marketing strategies such as changing of logos and rebranding.
Most of their advertisements on TV involve a celebrity spokesperson encouraging consumers to visit the stores and try out the new outfits. This strategy has encouraged most shoppers to visit the stores and purchase. Marketing efforts like this put forward have enabled the stores to be successful and in the next coming five years, they will be the leading store in America.


The current pricing at J.C. Penny is working well as compared to the Jonson’s pricing strategy as the business has experienced an increase in the number of customers. Proper frameworks that have been introduced have been able to attract shoppers who had snubbed the store for other stores. I can conclude by stating that a business with a good pricing strategy that favors customers leads to an increase in the number of shoppers.


Reingold, J., Jones, M., & Kramer, S. (2014). How to fail in business while really, really trying. Fortune, 169 (5), 80.
Lublin, J. S., & Mattioli, D. (2013, Apr 09). Penney CEO out, old boss back in. Wall Street Journal (Online). Retrieved from ProQuest.
Glazer, E., Lublin, J. S., & Mattioli, D. (2013, Apr 9). Penney backfires on ackman. Wall Street Journal (Online). Retrieved from ProQuest.
D'Innocenzio, A. (2012, January 27). J.C. Penney slashing prices on all merchandise. USA Today. Retrieved from http://www.usatoday.com/money/industries/retail/story/2012-01-25/penneys-price-overhaul/52787388/1
Reingold, J. (2012, March 19). Retail's new radical. Fortune. Retrieved from http://management.fortune.cnn.com/2012/03/07/jc-penney-ron-johnson/
Mattioli, D. (2012, January 26). J.C. Penney chief thinks different. Wall Street Journal.
Mattioli, D. (2012, January 25). How J.C. Penney was minted. Wall Street Journal.

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WePapers. (2020, September, 29) Term Paper On Pricing And Marketing Plan Implementation. Retrieved May 27, 2024, from https://www.wepapers.com/samples/term-paper-on-pricing-and-marketing-plan-implementation/
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Term Paper On Pricing And Marketing Plan Implementation. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/term-paper-on-pricing-and-marketing-plan-implementation/. Published Sep 29, 2020. Accessed May 27, 2024.

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