1. Robert Fornkahl
Brand Audit: JC Penny
Company Analysis
JC Penney’s advertising campaign is to target women between 25 and 34 years of age.
The brand wishes to acquire new customers and retain current customers who meet this
demographic with this new advertising campaign.
While in the 1990s JC Penney’s lagged behind their competitors due to inferior
centralization, identity vagueness, and an aging infrastructure. However, within the past 10
years the company has employed a new “three-phase journey” to revolutionize the outlook of the
brand. The company has fervently worked to centralize operations, by way of updating
technological infrastructure to combat poor efficiency and the hiring of out-of-house agencies to
look at the company from a new and fresh perspective, in order to reach financial optimization.
A complete mass overhaul of many of their store branches has been done, in order to create an
updated look for the brand in hopes of attracting and retaining consumers. Lastly the company
has worked on increasing their footprint in the digital age with a strategic focus to their website,
jcp.com, which has included the creation of four “state-of-the-art-distribution centers.”
To show added commitment to change in the brand Penney’s has pledged to incur costs
reaching $100 million for a successful advertising campaign, primarily targeting women between
the ages of 25 and 34.

2. Fornkahl
In regards to the revenue and profitability abilities of Penney’s over the last three years,
they have been flexible, to put in kindly. In July of 2010, Penney’s recorded revenues of $3.94
billion dollars the same as they had found the year prior in. In July of 2008, however, the
company had a revenue mark of $4.28 billion, which shows that the company has experienced a
decline in sales in their past three years of operations. As expected the profit margins for
Penney’s have also been low over the past three July’s as will. In 2008 the company had a profit
margin of 2.73%, which would be followed by two consecutive years of less than stellar margins,
in 2009 they had a margin of -.03% and which would be followed by a positive .36% in 2010 (JC
Penney Company).
The shrinking of Penney’s sales and profits over the last few years can’t solely be
burdened by failures within the company, but also the economy in which the company exist in.
Over the last 10 years the American and World-Wide economies have been facing a recession
that has sent prices rising and employee pay stagnant or shrinking. So as a result the profitability
of any company in this market and economy is bound to suffer, as people must decide between
luxuries, such as new clothes and rent.
Consumer Analysis
The consumers targeted specifically for the advertising campaign by JC Penney are those
who meet the criteria of being female and being between the ages of 25 and 34 years of age.
This group consists of more than 8 million individuals which help to create a national scale of
14% of the national population. Roughly 65% of women between the ages of 25 and 34 are
married or living with a significant other, meaning their shopping patterns have changed from

3. Fornkahl
their single counterparts who make up a smaller 30% ratio (How to Market to the Overlooked
25-34-year-old Age Segments).
Women, who are 25-34 still, to a certain amount, live their lives like they did when they
were in their teenage years. The purchasing of certain products such as DVDs and MP3s are
popular with them, but the brands in which they identify with have changed (25-34 Age Group).
No longer do they look for a brand as a sole identifier like a Nike, but now look for brands that
have a certain amount of luxury and sophistication to exemplify their new role in life. They have
a yearning for products that are seen as professional and long-lasting. Even though they want
something that is a premium and dignified in appearance and comfort, they don’t want
something that would be associated with their mother’s. They prefer a brand that has the appeal
of a J Crew or Banana Republic, that is something that is sophisticated and charming (Tapping
the 25–34-Year-Old Consumer).
Members of the 25-34 age group grew up in the 1980s and 1990s during the age in which
computers began to trickle into the fabric of the American life, that being said this age group has
a large grasp and attention to this medium, more so then their predecessors. Women 25-34 have
been shown to be more active on social media websites like Facebook and Myspace, than women
over the age of 34; however women under the age of 25 are more likely to be active users than
their older counterparts (Facebook usage - dominated by young audience, despite older
demographics growing quickly ). Even though women of this age group are technologically
savvy and fans of social media they still prefer to read advertisements that are sent as direct-mail
versus those sent as emails. In a study conducted by Vertis Communications 83% of women of
this age group were likely to read a piece of direct-mail sent to them opposed to the only 53%

4. Fornkahl
who would read an advertisement e-mail (Direct Mail is Read by 32 Percent More Women Ages
25-44 Than E-Mail Advertising ).
Market Analysis
For JC Penney’s the target consumer group of women between the ages of 25 and 34
lives primarily in areas with high population densities or urban locales. In that respect it would
be more prudent and efficient for the corporation to target their advertising campaign for the
lifestyle of the urban woman versus the lifestyle of the rural woman. For the advertising to be
effective it would be most beneficial if it did not specifically target those living in the out-state
regions.
The Product/Brand Analysis
JC Penney’s has spread their means of sale from their physical storefront, to the catalog,
and to the internet. Penney’s has outreached their internet influence to include social media
sights such as Facebook, which has consumer friendly interface that includes a wall section
where people can post about their experiences with JC Penney’s and any questions they have.
Varying feelings have been felt about JC Penney and their brand by their customers.
Some consumers have said that they like the choices that are available through jcp.com, but
didn’t like some of the search features that are present on the website. Others have mentioned
that while the sight has many pluses, the fact that shipping ads on 15% to the total charge is
major negative. JC Penney’s employment of a charge card has been mentioned as a plus,
especially the one time implement of 10% off the customer’s first purchase with the card (J.C.
Penney On- Line Saves Time, but Shipping Charges are High).

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The Competitive Analysis
Many other corporations have taken inroads into the field of department stores. Among
the key players in this field besides JC Penney are Macy’s which in the past decade merged with
Famous Barr, Sears, and Target. Within in these competitors Macy’s and Kohl’s are the closest
in what they do and what JC Penney’s does. Target has in the last decade become more of a one
stop shop like Wal-Mart with the additions of sections such as groceries and in-store restaurants.
Sears is also different from the standpoint that their long held selling point has been their range
of tools, Craftsman, and not their line of clothing.
At the top of the department store food chain lays Macy’s. Macy’s, like with JC
Penney’s is primarily found inside of malls across the United States. The products that are sold
within Macy’s are of higher quality/brand recognition then what is found at JC Penney’s. Brands
that can be found at a Macy’s include Michael Korrs, Calvin Klein, North Face, and DKNY.
On the opposite spectrum of the competition cycle comes Kohl’s. While Macy’s and
Penney’s are located primarily in malls Kohl’s are usually found in suburban areas near or as
part of strip-malls. Kohl’s is a store that appeals to a crowd that enjoys sales, they are
particularly fans of sending frequent customers coupons in the mail that give them the chance of
receiving a certain amount of money or a percentage of their next purchase at Kohl’s. The brand
quality found at Kohl’s is below what you find at both Macy’s and JC Penney’s and above of
what you would find at stores like Target or Wal-Mart. Apparel brands found at Kohl’s would
include Nike, Columbia, and Levi.
Advertising Objective(s) and Advertising Strategy(ies)

6. Fornkahl
One possible advertising objective strategy plan for the JC Penney’s brand is to increase
brand demand by creating a scenario in which JC Penney’s is situated in a social setting. A
second scenario is to promote trial among the key market by persuading the consumers in some
way, possibly a contest where contestant have the chance to win a shopping spree at JC Penney.
Works Cited
"25-34 Age Group." 2007. SlideShare. 9 Feburary 2011 <http://www.slideshare.net/Roobsa/25-
34agegroup-224641>.

7. Fornkahl
"Direct Mail is Read by 32 Percent More Women Ages 25-44 Than E-Mail Advertising ." 2007. National
Mail Order Association. 8 Feburary 2010
<http://www.nmoa.org/articles/dmnews/womenreaddirectmail107.htm>.
"Facebook usage - dominated by young audience, despite older demographics growing quickly ." 16
March 2009. Nick Burcher.com . 8 February 2011 <http://www.nickburcher.com/2009/03/facebook-
usage-dominated-by-young.html>.
"How to Market to the Overlooked 25-34-year-old Age Segments." 2011. Marketing Executive Digest. 9
Februray 2011 <http://www.marketing-execs.com/news/11-08/2.asp>.
"J.C. Penney On- Line Saves Time, but Shipping Charges are High." 9 August 2006. Epinions.com. 8
February 2011 <http://www99.epinions.com/content_247342861956>.
"JC Penney Company." 9 February 2011. YCharts. 9 February 2011 <http://ycharts.com/companies/JCP>.
"Tapping the 25–34-Year-Old Consumer." 2004. ICSC RESEARCH QUARTERLY. 8 February 2011
<http://www.icsc.org/srch/rsrch/researchquarterly/winter0304/25-34.pdf>.