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JC Penney Pricing Strategy Report

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Updated: Jan 24th, 2020


Marketing is a critical component in business performance. JC Penny is one of the companies that have recognized the significance of effective pricing. The company recently developed a new pricing strategy (Anderson, 2012). The fundamental objective of this strategy is to increase the customer base. Apart from this, the company seeks to establish a strong and renowned brand.

Companies have undertaken transformative initiatives to enhance their competitiveness. Observably, most clients would be attracted towards goods that sell at lower and competitive prices. This paper analyzes the recent pricing strategy of JC Penny. Additionally, it examines the likelihood of success of the new pricing strategy.

Background of JC Penny and Its Department Store Industry

JC Penny is remains as a holding business organization. The company got its incorporation in 2002. Evidently, the firm operates as a major retailer. It has approximately 1102 departmental stores. These stores are present within 49 states (D’Innocenzio, 2012). The basic business processes involve the sale of merchandise and other critical services to different clients. These processes are procured through the departmental stores.

However, the company also applies online marketing to sell most of its products and services. The company deals in a wide range of goods. These are meant for beauty and cosmetic purposes. Some of these include apparels, different types of footwear, and accessories. Moreover, it is also evident that the company deals in jewelry products and other properties meant for interior design.

It is important to note that these diverse products are found within different departmental stores owned by the company. Nonetheless, the company has certain stores that act as a one-stop point for shopping to all customers. There are several kinds of distribution initiatives undertaken within the store facilities.

Generally, the company has made tremendous achievements. For instance, it obtained the global entitlements for the “Liz Claiborne family of trademarks” and associated intellectual property in 2008 (Anderson, 2012). In addition, the company has been able to acquire the U.S and Puerto Rico “rights for the Monet trademarks and related intellectual property.”

JC Penny’s Pricing Strategy

It is evident that the United States contains very sensitive customers. Pricing is a key factor in the manipulation of client behavior and consumption patterns. JC Penny undertook a bold step towards revamping its pricing strategy. This process involved the termination of coupons that were earlier issued by the company to the clients. This is despite the fact that most of its clients had gotten used to the coupon system of product promotion (D’Innocenzio, 2012).

According to most market analysts, this initiative was a great blunder on the side of JC Penny. Of course, the result would be a significant decline in the number of customer visits to the company stores. There are observable undertakings by the company to apply a strategic pricing mechanism to attract back its clients. For example, the manufacturer’s prices have been aligned to those of the JC Penny. This is a transformative undertaking to attract and expand the overall customer base.

The stores are also not left behind in these initiatives. There are efforts aimed at increasing the extent of geographic markets. The stores have begun regular vendor promotion practices. The technique involves collaborating with other vendors who have already placed the company’s products in the market for sale. The company wants to transform into a routine and low price departmental store. The change is forecasted to be vital for the company’s growth and development.

The recent “fair and square” pricing technique is expected to lure many customers throughout the year (Anderson, 2012). This undertaking seeks to transform the company from being specifically “a sale –on-promotion” entity. In the new system, customers are urged to attend or visit the stores persistently all year round. The operation through department stores offers unique opportunities to the consumers. This is because an individual has the capacity to buy expensive goods at acceptable rates of discount.

Whether the Pricing Strategy Will Work

Several reactions have emerged from the recent pricing strategy undertaken by JC Penny. It is clear that the strategy is not likely to work and succeed. There are several factors to be considered in this decision (Anderson, 2012). The strategy does not favor and takes into account the influential elements within the external environment. Notably, the radical change does not consider the feelings of the customers.

The customers were used to a particular pricing system. Therefore, this eminent change in pricing needed some time to be introduced. Economically, most people are keen to compare the prices of similar products. It is evident that even with a discount; most customers would not believe that the products are cheap. Such convictions might negatively affect the operation of this new pricing strategy. The price changes do not consider the fluctuations and interrelations of consumer behavior.

Flexibility and constant innovation are some of the critical steps in managing consumer behavior. A rigid pricing strategy would not be appropriate for the attraction of new consumers. The pricing strategy may be prone to potential threats from external competitors. There are many competitors within the clothing and design industry within the U.S (D’Innocenzio, 2012). It is necessary for all companies to adopt innovative technology and guided decision-making process.

In times of low economic conditions, most buyers remain reserved. This means that they do not rush to buying. Particularly, this refers to buying goods that have very high price tags. This is regardless of whether the good is to be bought through an agreeable discount. It is evident that several environmental factors interplay. Consequently, they have a significant role in influencing the purchasing power of customers.

The Pricing Strategy and the Company’s Merchandising Approach

It is evident that the pricing strategy to be adopted by the company complements its new promotion strategies. Foremost, the strategy allows for a wide room of informed choice by the customer. The proposed product promotion mechanism involves the use of different media sources.

In essence, this enables the advertisement and promotion of different products (Anderson, 2012). Therefore, several customers have diverse points from which they can choose their products. Specifically, it is important to use different promotion initiatives. Although there are obvious similarities, a considerable period would be appropriate to increase the sales volume.


Globalization and advanced technological applications have increased the level of competition. Most companies recognize the significance of effective pricing in marketing. Ideally, different pricing mechanisms may be applied to attract new customers. Notably, such strategies might be crucial in retaining the new clients. Expert advice and consultations are mandatory in the development of effective pricing strategies. Additionally, organizations must apply analytical tools while transforming their marketing strategies.


Anderson, M. (2012). JC Penney tweaks pricing strategy, reversing course again. Retrieved from

D’Innocenzio, A. (2012). J.C. Penney slashing prices on all merchandise. Retrieved from

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