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  • September 2012 (Revised January 2013)
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J.C. Penney's 'Fair and Square' Pricing Strategy

By: Elie Ofek and Jill Avery
  • Format:Print
  • | Language:English
  • | Pages:27
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Abstract

As a he gets ready to release 2nd quarter 2012 results, Ron Johnson, the new CEO of department store J.C. Penney, is reconsidering the dramatic changes he initiated for the business model and brand image of his company. A new pricing scheme he put in place in February, dubbed "Fair and square" was a central component of the new strategy. The scheme initially had three pricing tiers and eliminated typical sales promotions in an attempt to simplify the shopping experience for consumers; thus moving J.C. Penney off its previous high-low pricing practice. Other components of the new strategy included a new store layout, the inclusion of several well-known brands, and having special lines designed by well-known designers. However, troubling first quarter results that continued into the summer months seemed to indicate that J.C. Penney shoppers, accustomed to receiving JCP Cash coupons and circulars advertising the week's specials, were slow to embrace the new pricing format and began leaving the retailer in droves. Under enormous pressure to turn things around as the all-important back-to-school and holiday shopping seasons were imminent, Johnson decided to make adjustments to the initial pricing scheme that were set to go into effect August 1st. Were these changes enough to turn things around? Should Johnson stay the course on the other elements of his repositioning efforts? Is Johnson's experience in setting up Apple stores helping or hurting him as he tries to achieve his goal of making J.C. Penney "America's favorite store?"

Keywords

Change Management; Consumer Behavior; Management Teams; Business Model; Marketing Strategy; Price; Brands and Branding; Decision Making; Retail Industry; United States

Citation

Ofek, Elie, and Jill Avery. "J.C. Penney's 'Fair and Square' Pricing Strategy." Harvard Business School Case 513-036, September 2012. (Revised January 2013.)
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About The Authors

Elie Ofek

Marketing
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Jill J. Avery

Marketing
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Related Work

    • April 2013 (Revised October 2014)
    • Faculty Research

    J.C. Penney's 'Fair and Square' Pricing Strategy

    By: Elie Ofek and Jill Avery
    • January 2014
    • Faculty Research

    J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old

    By: Elie Ofek, Jill Avery and Jose B. Alvarez
    • January 2014
    • Faculty Research

    J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future

    By: Elie Ofek, Jill Avery and Jose B. Alvarez
    • September 2012 (Revised January 2013)
    • Faculty Research

    J.C. Penney's 'Fair and Square' Pricing Strategy

    By: Elie Ofek and Jill Avery
Related Work
  • J.C. Penney's 'Fair and Square' Pricing Strategy By: Elie Ofek and Jill Avery
  • J.C. Penney's 'Fair and Square' Strategy (B): Out with the New, In with the Old By: Elie Ofek, Jill Avery and Jose B. Alvarez
  • J.C. Penney's 'Fair and Square' Strategy (C): Back to the Future By: Elie Ofek, Jill Avery and Jose B. Alvarez
  • J.C. Penney's 'Fair and Square' Pricing Strategy By: Elie Ofek and Jill Avery
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