2. Key Objectives
For J.C. Penney to become profitable, JCP’s focus must shift from overpaid company executives
to a flat organizational culture where employees feel high levels of job satisfaction and have a
cohesive outlook on company strategy. Additionally, JCP must specify a new mission statement,
provide consistent leadership, and structure and implement a new pricing strategy to ensure
profitability. The company must lean forward into change to ensure survival.
Better communication among all levels is essential for JCP to once again become prosperous and
re-gain employee buy-in.
Internal Issues
New Mission: Founded in 1908, J.C. Penney is a one-stop-destination for happiness that strives
to support your family values through attractive and durable clothing, home goods, and
accessories. Our company is structured so that you can build a richer and more successful life
through exceptional service and revolutionary prices that fit your everyday life and everyday
style.
This new mission satisfies four of the eight human appeals. Additionally, JCP’s new mission
statement specifies the requirements for a department store industry-specific brand and fosters
industry-consumer connection and internal buy-in from JCP’s employees. JCP is not a new
brand; this revitalized mission statement stays true to the brand equity already held in JCP and
further builds on that equity while supporting future growth.
New Customer Cultivating Culture
The new JCP culture exudes happiness. Employees are happy to report to work every day
because they know they are valued, contributing members of an organization where grassroots
input is welcome because JCP’s corporate structure is flat, fast, and flexible. Consistent
leadership localized in Plano, Texas is the foundation for JCP to build its new culture.
3. JCP’s corporate structure can achieve happiness by making the organizational structure more flat.
Eliminating superfluous, over-paid higher leadership will be the first step to removing the too-
complex leadership structure. Having a clearly defined chain of command with a specified
person of contact for lower-level employees to report under will help make JCP more flat;
likewise, the location store managers should assume more autonomy in their roles and feel like
they are able to engage JCP into community events. Likewise, utilizing employee input and
establishing “suggestion” outreach programs for employees at the local level and the national
level will foster a sense of openness among the employees. A reporting structure in revitalized
JCP is streamlined, understandable and transparent. It eliminates unclear “chains of command.”
Employees feel valued because the reporting structure is set up to empower employees at all
levels; they are able to report directly to the president, if need be. Ultimately localized ability to
make decisions and solve problems benefits JCP customers, thus facilitating “happiness.”
A corporate structure that is flat will encourage employee cohesiveness. This openness among
the corporate structure can effectively help facilitate “fast” corporate action and respond to
market changes. Because there are fewer levels, top leadership and lower-level employees with
increased autonomy can make decisions more quickly, creating a “fast” culture in the revitalized
JCP.
Additionally, employee suggestion outreach programs and employee 360-degree feedback will
allow only the best employees and best corporate strategies to remain functioning. With better
corporate organization in place and a flat and fast work environment, JCP is able to adapt
corporate procedures to meet market demands, making it a flexible organization. Such agility is
essential to JCP’s revitalization. Once again, employees feel pride in their jobs and believe in
JCP’s brand, brand integrity, and pricing strategies. Pride, autonomy, trust, and creativity
cultivate job satisfaction and a happy company culture which is reflected to customers on every
level. The flat, fast, and flexible market position makes JCP a strong industry competitor.
New Fast, Flexible, and Flat Structure
4. JCP’s new corporate structure will begin in Plano, Texas where company leadership will stay
consistent in both location and company position. The new structure will be built in such a way
that it fosters employee buy-in, engagement, and increased job satisfaction. One such way this
change will be implemented is through lower salaries to executive leadership. Company
executive leadership will reduce their job salary until certain JCP goals are met (ex. customer
retention hits XXX, or in-store traffic increases by XX%). This gives executive leadership an
opportunity to be more transparent with their employees, thus developing a corporate culture that
is current in industry activity, receptive to environmental changes, and encourages employee
feedback. When line employees know that management have used a reduction in their own
salaries as “skin in the game,” it will encourage them to also put more effort into their jobs.
Transparency combined with these tactics will help create a fast, flexible, and flat structure for
JCP that competes with other department store industry competitors while fostering an improved,
happier culture within JCP.
JCP’s CEO is held responsible by the board of directors. Likewise, the Chief Operations Officer,
Chief Financial Officer, and Chief Sales Officer all report to the CEO, yet this system operates
somewhat like the U.S. Democratic system. All parts hold equal power and must share a 2/3 vote
in order for major corporate decisions to be made. Every level throughout JCP will have the
commensurate authority in order to maintain optimum effectiveness.
Revitalized JCP will uphold Regional Sales Managers, District Sales Managers, and Store
Managers. However, the reporting structure has changed so that stringent guidelines and “due
process” procedures are eliminated and employees and store managers have more autonomy. Pay
structure is right-sized among these three distinct managerial positions and follow a democratic
2/3 vote rule. This way, the JCP corporate structure is flatter in nature and allows for the
company to make fast and flexible decisions. Management by objectives is still utilized, but
objectives are clear, concise, and measurable among all levels.
5. JCP leadership as a whole is less hierarchal and more serves as an “advisory” role in the
corporate structure. There are system checks and balances (like delivering 360-degree feedback)
that prevent unfair workplace practices and create a flat, fast, and flexible environment in which
of JCP to compete in the department store industry.
New Dominant Selling Idea
JCP’s new Dominant Selling Idea exhibits the motivating difference from other industry
competitors through: “Shop JCP: Take Home Happiness.” This new DSI is the most succinct
verbalization of their revitalization within the department-store industry because it shows how
JCP is now superlative in providing happiness to its consumers. The promise of “Take Home
Happiness” fulfills the five qualifications of a DSI because it is superlative, important,
believable, memorable, and tangible.
This tag line fits their new “Middle-Aged, Middle-Class Moms” target market because it
accommodates customers’ desire for a unique shopping experience: superlative “happiness”
feeling in a department store. Additionally, this feeling is critical to any shopping experience in
everyday life because customers must feel important and happy during their purchasing
decisions. They must also feel happy about their purchases when they return home. “Shop JCP:
Take Home Happiness” encompasses the feelings of believability when their core customer is
able to achieve satisfying, quality clothing, accessories, or home goods at reasonable prices when
they walk into JCP. “Shop JCP: Take Home Happiness” encapsulates JCP as a one-stop-
destination for achieving quality family necessities with exceptional service at fair prices,
making JCP memorable in the eyes of its target market. Additionally, tangibility can be accessed
through post-purchase decisions and how the customers feel after making their purchasing
decision by either using or wearing their JCP purchase. “Shop JCP: Take Home Happiness”
meets all the five criteria to satisfy the requirements of an effective Dominant Selling Idea (DSI).
Key visuals associated with the new JCP should be evocative and colorful: “happiness” is not
limited to a specific color, but represented in the new JCP stores are bright colors, attractive
6. displays, and DSI-level customer service. This should be the key visual that comes to a
customer’s mind the instant they walk into JCP’s stores across North America. Additionally, a
key visual for JCP should be primary, private brands that are meaningful to customers and reflect
“everyday life,” “everyday durability,” and “everyday style.” This helps JCP position against the
competition against other industry competitors because the core customer can “Take Home
Happiness”--not just products.
Marketing Mix Strategy
At JCP, “Happiness” is achievable through the new DSI and marketing mix strategy. JCP’s
structure was first built on customer loyalty, and can be achieved once again if happiness, value,
and quality are communicated through the marketing mix strategy. Customers can achieve a
richer and more successful life by “Shop(ing) JCP: Take(ing) Home Happiness.”
Customer Solution/Benefits/Services Strategy
Currently, JCP holds a strong online sales presence and has re-introduced catalog distribution to
the marketing mix. If executed correctly, catalogs can help save JCP. Catalogs should be
distributed to former JCP loyalists and portray JCPs commitment to customer happiness through
family values and quality products, such as its strong, private-label brands. Advocating these
brands is at the core of JCP because private label products are the foundation on which JCP has
built its brand. Adding emphasis to the exclusive JCP brands, such as St. John’s Bay and Arizona
jeans, strengthens JCP’s brand quality. Similarly, catalogs and online marketing that demonstrate
JCP’s attractiveness of “outside” brands, like Sephora, Liz Clairborne, and Disney are
strongholds that help JCP’s foot traffic. Utilizing those brands in the marketing mix along with
JCP private-label brands is a strategy for success.
Solutions to Improvement
JCP can express “Shop JCP: Take Home Happiness” through loyalty programs and membership
incentives that promote customer retention. Additionally, adding faster online and in-store
delivery time to products will guarantee exceptional service to their core customers.
7. Before the revitalized JCP brand does anything else to the physical structure, the focus must be
shifted to re-locating stores to outdoor malls. Outdoor malls allow for quick in-and-out access
without the hassle. JCP must focus their attention to outdoor malls, strategically eliminating
existing storefronts in “dead” indoor mall locations. Outdoor malls are more lucrative and
promise greater shoppability for JCP’s target customer.
Even simple solutions to creating happiness can be achieved through measures such as training
JCP employees to greet customers upon entering the store. If possible, JCP local stores should
create a database that makes it simpler to remember customer names. JCP should use greeters at
the front of their stores, much like Wal-Mart. JCP can take the greeter concept to the next level
by adding a more personal greeting using face/name recognition when possible. The instant
friendliness is a great way to support the DSI by providing an immediate point-of-contact for the
busy family for when they had immediate questions or need direction assistance as soon as they
walk through the door.
Upon entering a store, customers will feel the positive vibes (a.k.a. happiness) of JCP’s corporate
culture mirrored by the attractive displays and exceptional service from store employees.
Helpful, friendly service abounds throughout the stores, and shelves/display boards are
maintained in a shopper-friendly layout to ensure a quicker, more pleasant, happy, and
holistically valuable shopping experience. Likewise, the JCP website will have regained some of
its online traffic momentum by updating its website functions to reveal everyday happiness
found at JCP. Customers will notice the attractive and happy ads that reflect JCP’s corporate and
customer culture and have eliminated the egregious red “sale” and “discount” writing plastered
over all of the photos.
JCP will use “real” customers in print, online and broadcast advertising. These customers will
tell how they found happiness at JCP, which will build credibility and encourage others shop at
JCP. For example, an ad would feature a Mom and two children, small boy and teenage girl:
8. “This year, I found a wide selection of durable back-to-school clothes that didn’t bust my budget.
And they are fashionable--even my teenager is happy.” A sustained advertising campaign that
uses believable, relatable people will help JCP re-gain the lost trust of former consumers.
The revitalized JCP website is happy: easy-to-navigate tabs are displayed on the left-hand
column reflecting different consumer interests (men, women, juniors, etc.) and prestigious
private-label brands are promoted on the home page in conjunction with nationally recognized
brands like Sephora and Disney. Happy colors are utilized, and website ads are tailored to
season-specific, market-specific demographics. The website is updated and utilizes modern
interface with a responsive design that allows target customers to shop using their mobile
devices.
If customers sign up for email specials via the online catalog, they will be entered into a daily
drawings for a “JCP Happy Moment” -- prizes ranging from a 10% discount coupon to a $100
shopping spree. This sign-up form allows JCP to solicit information from customers (Tell us how
JCP made YOU happy and you may be featured in an ad!) This helps build the JCP customer
email database for future messaging.
The in-store layout is logical and clutter-free. Upon entering a JCP brick-and-mortar location, a
JCP store greeter will welcome the new customer into the store. Using this, “On-the-Run”
customers immediately have a point-of-contact (the greeter) to ask questions about where certain
items or products are located within the store. Additionally, sections are divided in accordance to
the market segmentation: “Plain Jane,” older customers have a section that features traditional
clothing. Likewise, the store layout gradually transitions through the life stages and within the
section, is varied by consumer preference (ex: trendy, athletic, and studious Juniors clothing).
Keeping the physical storefront clutter-free is a primary job responsibility of the knowledgeable
employees. There is one sale section within each store divider (ex. Juniors, “Plain Janes,” Plus
size, etc.) that is maintained cleanly and effectively by store employees. It is the responsibility of
the employee in charge of a particular section to maintain the tidy appearance of the storefront in
9. their department section. It is the responsibility of the mangers to maintain and update
mannequins, ad displays, and customer help/check-out desks with appropriate tidiness and
cleanliness that models the rest of the clean JCP storefront.
Value/Cost Strategy
JCP once had a good selection and was a destination to shop. The brand represented good quality
clothing for the whole family and nice home goods (bedding, appliances). Prices were reasonable
for quality merchandise and there was value within the St. John’s Bay and other private brands.
Older demographics remember JCP for these attributes. Likewise, this perception of “good
quality at reasonable prices” is something JCP can resurrect in its new value/cost strategy. If
marketed well, JCP can remind older customers of the value once sought at JCP while promoting
the newer items and family-valued products: “JCP: supporting family values and your happiness
for over 100 years.”
Solutions to Improvement
JCP has lost connection with their customers because their brand has shifted from customer-
focused to coupon-driven. This strategy is a recipe for disaster because couponing has become a
practice and not an event. Therefore, JCP customers have an over-reliance on couponing.
One way in which JCP can improve the value/cost strategy of the brand is through creating
special “events” that are not solely price-driven. For example, adjusting the pricing strategy so
that there are “price-focused” events and not “price-focused” strategy is essential to
communicating value to customers. JCP customers should feel delighted and filled with
happiness after purchasing a product without a discount and feel that they have received value.
Key cost and value strategies will be communicated to the most lucrative market for JCP:
families. This segmentation has bigger ticket items and desires more value for their purchases.
As such, JCP’s new value/cost strategy will lure these families into the store that have never been
in before, with loyalty programs, JCP shopper rewards, lay-away and credit card incentives.
10. Likewise, major holidays (Easter, Memorial Day, 4th of July, Labor Day, Black Friday, and
Christmas) will all advertise door-buster promotions, but scale back the discounting pricing
strategy throughout the year, so that only these discounts and promotions are offered on the eve
of peak season times and can effectively compete with other industry competitors. Likewise, the
implementation of the loyalty card will be used on special event weekends. This will help bring
more foot traffic into the brick-and-mortar JCP locations.
JCP has realized that “value” doesn’t always mean “the cheapest price” for its customers. They
will pay a fair price for products that give them happiness after the sale. Customers should feel
that with or without a coupon, when they walk into JCP, they have received products that enrich
their life at fair prices leaving them feeling satisfied and happy.
Education/Engagement/Communications Strategy
JCP does a great job marketing its online sales strategies, but lacks communicating value.
Pictured in JCP online advertisements are great images with happy, diverse people (an image
something the revitalized JCP brand should maintain), but the pricing overpowers visitors to the
online website. Red couponing, “sales,” and “promotions” literally cover up some of the images
so that customers are not able to focus on the products or the happy models. The new
communications strategy should include eliminating the overbearing red-font message, “price
deduction,” because it distracts from the DSI: “Shop JCP: Take Home Happiness” which has
nothing to do with price structure. In the new DSI, price is just one element of success, but the
revitalized JCP holds a stronger meaning that transcends price-based “value.” The restored brand
equity in JCP will represent quality clothing at reasonable prices. This must be consistently
communicated on online platforms as well as other mediums.
Solutions to Improvement
JCP needs to focus on communicating and implementing its new mission:
11. Founded in 1908, J.C. Penney is a one-stop-destination for happiness that strives to
support your family values through attractive and durable clothing, home goods, and
accessories. Our company is structured so that you can build a richer and more successful
life through exceptional service and revolutionary prices that fit your everyday life and
everyday style.
A lack of mission leads to chaos; customers have seen this chaos in the past few years of JCP, so
it is the company’s responsibility to educate customers on the new mission that traces back to
JCP’s origin.
JCP must communicate their re-vitalized brand to their target customer and foster a connection
with them restoring the brand equity already in JCP. This can be achieved through localizing
efforts to support local community and “family values” by implementing celebratory days in
stores. An example of this might include philanthropic efforts at Christmas time (like Angel Tree
or Salvation Army) or sales on the local high school or college colored apparel the weekend
before Homecoming. Garnering attention from customers in this way helps localize efforts so
that JCP really does support family values and helps the core customer build a richer and more
successful life by shopping at JCP. These actions position JCP a reciprocal giver in customer’s
minds: JCP supports the community. In turn, the community is more likely to support JCP.
Specific Marketing Mix Strategy Primary Target Market
“Middle-Aged, Middle-Class Moms” (and Dads) are the ideal customer base for JCP to attract.
This is the best target customer because it is the best market segmentation to align with the re-
vitalized JCP mission statement. This customer base desires quick service, family values, quality
clothing, reasonable prices, and pleasant service. A combination of these attributes leaves the
customer feeling happy and having achieved a richer and more successful life by shopping at
JCP.
12. Likewise, the “Middle-Aged, Middle-Class Moms” counterparts are their children: the market
with the most potential for growth. The two markets are somewhat interdependent on one
another because without their children's’ approval, “Middle-Aged, Middle Class Moms” (or
Dads) are less likely to shop at JCP because it is wholly a less desirable experience if their
children (a primary consumer of JCP goods) reject the brand.
Target Market Specific Customer Solution Components.
The best way to attract and re-gain customer attention from “Middle-Aged, Middle-Class
Moms” (or Dads) is through convenience mechanisms. Conveniently place a greeter by the door
who is readily accessible to answer questions. Conveniently market to the target audience
through e-mail blast campaigns and digital interfaces (like Facebook, Instagram, etc.), suggested
shopping experiences and products in online advertisements. Conveniently make JCP a part of
their everyday world. These are working class members of society where money and time are
commodities: attracting them through convenience mechanisms will help them fulfill a want they
did not realize they had formerly held: a desire for happiness to be met through cost-effective,
service-friendly, family-oriented products of value sold at JCP.
Likewise, the secondary target market must achieve the trendy clothing that is perceived as
“cool” to their peers. For example, the primary market will appreciate Arizona jeans durability
and quality whereas the secondary market (the children of “Middle-Aged, Middle-Class Moms)
will value the “cool effect.” The reputation of JCP must be re-build among children and
teenagers to establish brand credibility. One way to accomplish this is through endorsements by
popular celebrities in the pre-teen age group such as artists like Taylor Swift or Kelsea Ballerini
that support JCP’s mission and DSI.
Target Market Specific Access Components
“Middle-Aged, Middle Class Moms” (or Dads) will desire to come into the JCP world if shown
the value behind JCP’s private-label brands. Access components that demonstrate this are
outdoor malls, in-store greeters, neatly/logically departmentalized store segments, and
13. knowledgeable employees. Likewise, important website access components are mobile-based
internet technologies, efficient online shopping experience, clear advertisements, and fast
shipping/delivery time. Using “real” customer testimonies in advertising about how they “Found
Happiness at JCP” will add credibility to the value of private label brands to this customer
demographic.
A major component that will keep customers coming back to the brand is loyalty-incentive
programs coupled with in-store and online easy access points. This is a specific access
component that speaks to the heart of the primary target market and aligns with the marketing
strategy.
The online website must have easy-to-understand web dividers that are not so “cluttered” in
appearance. A clean and easy-to-understand interface is essential for the primary target market
when making purchasing decisions. A pop-out menu including subsections within each category
is crucial for a happy experience by the target market. Along the left-hand side will encompass
this “cleaner” website interface that satisfies the “Middle-Aged, Middle-Class Moms” (or Dads)
who desire an efficient, enjoyable online shopping experience. When checking out online,
random shoppers can receive a bonus JCP Happy Moment courtesy of JPC: free shipping or a
free upgrade to two-day shipping.
Likewise, a major specific access component that is valued by this target market is speed.
Utilizing a customer data entry system that builds off the loyalty-incentive database should help
customers experience a one or two-click online shopping experience that helps meet the need for
speed.
Upon entering the store, target market customers will be greeted and large signs and
advertisements can additionally help direct them to their specific section. Access points will be
grouped in accordance to market segmentation: “Moms on the Run,” “Plain Janes,” “Trendy
Teen,” “Diehard Classics” making for an easier, quicker family-value oriented experience at JCP.
14. Target Market Specific Value Components
“Children of Middle-Aged, Middle-Class Moms” (or Dads) value trend above all else. Clothing
must be peer-approved. Likewise, “Middle-Aged, Middle-Class Moms” (or Dads) will value
time efficiency, value, and quality as the most important brand attributes. “Middle-Aged,
Middle-Class Moms” (or Dads) is the most lucrative market for JCP because families are bigger
tickets and specifically value attributes that JCP can best-offer (like good quality clothing for the
whole family and reasonable prices for quality merchandise).
“Children of Middle-Aged, Middle-Class Moms” (or Dads) will utilize Facebook as a great tool
to achieve strong brand equity among this age group. With the stamp of peer approval from
children and teenagers, parents will flock to JCP store locations to provide their family with
quality clothing at a good value.
Target Market Specific Education/Engagement Components
JCP should continue advertising “Shop JCP: Take Home Happiness” through television and radio
advertisements so that they are better able to reach their traditionalist core customer.
Additionally, JCP can capitalize on today’s trendy teen demographic by including marketing
efforts in social media platforms, like Facebook, Instagram, Twitter, Tumblr, etc. that are very
different than the advertisements seen on Television and radio aimed towards “Middle-Aged-
Moms” and older core customers. Garnering the attention of young persons through “Take Home
Happiness” means something different than it does for the “Value-Oriented, Middle-Aged,
Middle-Class Moms” target market. However, if given the “ok” and approval of JCP’s brands by
trendy teens, “Middle-Aged Moms” will have more motivation to shop at JCP because it is
family-approved. This is why it is vital for JCP to not only market to their target market, but
additionally their secondary target market. A specific engagement component that achieves this
goal is utilizing hashtag marketing campaigns as a specific educational/engagement component
as well as “outfit of the day” or custom-built product marketing campaigns on Facebook and
15. Twitter. Likewise, JCP transitions into post-high school like. JCP has a valuable outlet on
Pinterest for using only JCP products to decorate dorm rooms, apartment rooms, apartment
kitchens, living rooms, tablescapes, garages, and so forth. JCP “grows up” with the secondary
market until they become the primary market. JCP can utilize Pinterest and other related social
media sites to display a “fashion board” using only JCP clothing.
Likewise, “Middle-Aged, Middle-Class Moms” (or Dads) might like the ad recommendation
software on programs like Facebook that remember user preferences and customize their specific
needs and once again re-gain the connection with customers that JCP once held. This helps
enrich the target market’s mind through exceptional service (suggested shopping) that fulfills
their everyday life and everyday style. When given these tools, this customer segmentation is
most likely to become the next brand promoters for JCP, and thus is an ideal time to introduce a
referral campaign.
Additionally, customer engagement components will be found through localized efforts in the
middle school, high school athletic teams or extra-curricular groups. JCP can penetrate into the
secondary target market by local brick-and-mortar community locations and events as well as
online platforms where exchanging information about JCP clothing and products is perceived as
“cool.” For example: “Shop JCP: Take Home Happiness and Take Home the Win for Mercer
Bears!” If advertised correctly, the secondary target market will flock to JCP locations because it
gives back to the community (giving back 10% of proceeds to Mercer) and discounting orange
and black clothing (at 10% off to students and families) is an effective event that demands
attention from the secondary market and garners primary and secondary customer support
through specific access components.
Another area in which JCP could add value to the marketing mix is to utilize guerrilla marketing
promotions, like advertising on the carts in grocery stores that enter into the “Value-Oriented,
Middle-Aged Moms” target market world. Messaging could be as simple as “Take Home
16. Happiness” --J.C. Penney.” Engaging target customers in this way supports their lifestyle and
educates customers that JCP cares about family values.
Strategic Recommendations for Budget and Recourse Allocation
Needed Resources
JCP must acquire a loan and begin outlining a payment-rescheduling plan. Financial statements
reflect that JCP must acquire a large amount of start-up capital in order to save the brand.
Financial projections forecast millions of dollars in start-up capital to re-locate existing storefront
locations to outdoor mall locations and re-vitalize JCP’s in-store and online presence. Additional
resources are required in order to re-establish a strong online and mobile application presence
and update all marketing material. Training expenses must be considered when budgeting for
needed resources: this amount will be large considering the entire company receives a strategy
and branding overhaul.
Resource Possession
Currently, JCP does not have the financial reserves to fund the revitalization of the JCP brand in
totality. The implementation of change must take place over the next few years in strategic
phases. Because the company currently runs at a negative profit per year, the only way in which
to quire resources is to look to outside funding sources.
Funding Growth
JCP must establish a cash flow budget that estimates the generated cash entering and leaving the
business and utilize these numbers to justify the expense; additionally, JCP must prepare
financial projections, substantiate sales forecasts, expenses, and profit.
It must foster a strong relationship with a lending institution and engage the involvement of the
JCP board of directors. In the meeting with the board of directors, JCP will request that
administrative expenses are minimized and the saved funding be redirected to training, so that
employees are not faced with role conflict. Non-essential, highly compensated director positions
17. are eliminated and other roles are streamlined to realize high cost savings. The new company
mission and strategic direction must be communicated well so that the board of directors can
clearly see the heightened potential for the renewed brand.
Once the vision is clearly demonstrated, the CEO must request that all members of the board of
directors invest a portion of their stockholdings toward JCP’s revitalization. The CEO must
remind the board members that all positions within the corporation are taking a pay cut in order
to help with re-branding efforts. Revitalized JCP will be running on a negative profit margin until
certain criteria are met that allow the next phase to be implemented.
Implementing phases are the most strategically logical way in which to show the potential ROI
and increased brand equity associated with the “new” JCP.
Estimated Return on Investment?
JCP is eliminating a large number of the duplicative positions by downsizing staff and assigning
multiple job functions to key employees. Advertising is going to get a total overhaul: target
market testing is now utilized which eliminates superfluous spending on marketing expenses.
JCP gains a large ROI on marketing expenditures even though additional marketing and
advertisements are being added.
Additionally, JCP it monitoring its inventory control by utilizing a regional warehouse for stock
that would otherwise occupy rental expenses in prime shopping real-estate areas. The additional
foot-traffic garnered from the bettered retail locations more than compensates for the additional
occupancy expenses; likewise, localizing inventory control to one key area saves money and
predicts a stronger estimated ROI.
The potential for ROI is great. A strong sales plan is in place. Each phase must meet a specific
success factor metric before moving onto the following phase. Marketing metrics reveal positive
financial forecasts for in-process and end-process market results.
18. Strategy Assessment
Financial Metrics
JCP must utilize in-process and end-result market based metrics in order to determine predicted
customer lifetime value and realized customer lifetime value due to the revitalized JCP company
branding and corporate strategy. In-process and end-result market-based metrics indicate
customer lifetime value modeling and brand effectiveness compared to industry competitors.
Analyzing the market-based metrics yield financial metric in-process and end-result conclusions
for JCP.
Market-Based Metrics: In-Process and End-Result
In-Process
JCP’s revitalized strategy has increased customer awareness through random courtesy “JCP
Happy Moments” and “Outfit of the Day” customer engagement metrics. Likewise, this has
increased interest in the brand and is a great in-process market-based metric in which to measure
JCP’s revitalization viability. Additionally, JCP’s net promoter score is a great customer
satisfaction metric in which JCP customers are likely to advocate the products and brand.
Meanwhile, response time to problems has increased exponentially in the revitalized brand,
creating higher levels of satisfaction in customers.
Increased satisfaction in JCP’s brand is two-fold: customers now advocate for JCP products that
shares their satisfaction to others while employees in the corporation display higher levels of job
satisfaction. Other in-process market-based metrics reveal increased satisfaction because
customer preferences are being met in each JCP market segmentation. Likewise, new product
activity is prominent in the brand because JCP is fast, flat, and flexible and is better able to
quickly adapt to market changes, thus keeping trendier, more fashionable products in-store and
replenishing back-stock regularly so that customers experience a quick turn-around with season-
appropriate products. Customers value the JCP brand because it meets their benefits and unmet
19. needs outweighing the costs associated with buying the product. Benefits outweigh the costs in
the revitalized JCP brand.
Customers appreciate JCP’s revitalized relative product quality because relative product prices
now accurately reflect relative cost, relative service quality, and value in JCP private-label
brands and store products. Market-based metrics reveal positive brand associations with JCP’s
exclusive private label brands and renewed trust in the JCP brand because the company has
reverted back to their core customer and original founding, thus satisfying family values once-
more.
End-Result Metrics
Loyalty cards, sale of loyalty program cards, and customer database information has made it
easier to measure end-result metrics (like revenue per customer and percent of new customers).
Examining customer retention reflects increased revenue per customer as well as the percent of
new customers in the revitalized JCP brand. These are all indicators of JCP’s level of customer
lifetime value. JCP must measure market coverage within the department store industry as an
end-result market-based metric.
Customer Lifetime Value is a good end-process market based metric for JCP to use to evaluate
the revitalized brands effectiveness in the market. The database system associated with the
loyalty card helps numerically show the purchasing power per customer as well as customer
retention rate and negative churn throughout the company. JCP should question: how engaged
are customers with the new loyalty program? Is the customer retention rate increasing as JCP
makes changes to better-market to their core customer?
JCP’s market share is one of the best market-based metric indicators to determine relative
success within the industry. If JCP can capture more market share for its brand, JCP leverages
well against other brands and thus “takes” customers away from other industry competitors.
20. Increased market share often is an indicator of repurchase decisions from consumers, thus
making customer retention rise brand-wide and JCP’s power in the department store industry
market to increase.
