Hammad Siddiqui - Capacity Building Expert, Trainer and Change Leader.
Monday, November 26, 2012
How Did JC Penny Pricing Strategy Fail?
US is a highly customer sensitive market. Radical experiments can work, but when backfire, retrieval is generally almost impossible.
Undoubtedly pricing strategy is the key to bring customers in stores. US customers are known to drive miles to avail small coupon offers. Price war is tough. In this situation why did JC Penny showed bravery in changing its pricing strategy and stopped issuing coupons to its customers who were used to of getting deals from the store via coupon based promotions. That resulted in a significant decline in customer visits, resulted in sharp decline in sales which had fallen 26.1 per cent against an estimated decrease of 17.9 per cent.
Before the start of Christmas session, JC Penny needs to bring its customers back. Stores are now focusing on putting manufacturer’s prices together with Penney’s deal prices. They are hoping that these two price tags are expected to attract customers. Stores are also starting seasonal vendor promotion technique which means partnering with vendors that are already putting their products on sales.