J.C.

Penney

Part 2 New Retail Line/Strategy Proposal and Sales Presentation

Group 4
Sarah Martin, Elizabeth Kraidich, Victoria Raile, Abigail Perkins, Karl Fleener, Sarah Otting,
Yong Il Jo, Krystina Milakovic, and Basilia Koster
AESHM 275: Retail Merchandising
Professor: Amrut Sadachar
Date: April 23, 2015

Table of Contents
Line Planning: Positioning, Demand, and Assortment/Variety.
Mood Board/Trend Board
Home Decor Perceptual Map
Womens Buisness Perceptual Map.
Home Good Products Offerings Chart....
Buisness Products Offerings Chart.
Sales Forecast for Proposed Line/Offering..
Trend and Market Research
Lifestyle Trends.
Sales Presentation for Line/Offering & Marketing Strategies
References..
.

Line Planning: Positioning, Demand, and Assortment/Variety

JCPenney is geared toward a variety of people, from babies to the elderly in the middle
class, who are price conscious shoppers. This broad market weighs heavy on the department
store, as it spreads the focus too thin across the board, by trying to keep up with the seasonal and
fast fashion changes. JCPenney didnt always used to be that far spread with their market. It used
to mostly cater to an older demographic of late 30s-50s. There were attempts to reposition and
open up new target markets such as a young adult looking for affordable business acceptable
clothing. The idea of searching for a new target markets is always going through company
minds, but this position isnt saving JCPenney much. Though they have made success in their
own private labels such as Worthington, St. Johns Bay, Stafford, and Arizona (Waba).They
have fallen short in other product categories.
Their brand image of the company has suffered greatly over the course of the last two
decades. Theyve gone through numerous CEOS in a short amount of time and lost their main
target customers of the older demographic by trying to switch to younger audiences and cut out
fake prices prices for a short period of time, but this put off customers (Passikoff). Even now
their stock and value are still on the slow down cline. JCPenney needs to refocus on fewer target
market customers and even narrow some selections down that arent doing as well as other, like
home goods, and expand on that. When you think of their competitors, other department stores
such as Macys or Younkers come to mind quickly. Macys is known for appealing to the
youthful customer and by offering popular brands that are co-branded with celebrities and sales
makes it a favorite store of many. This particular department store is primary competitor because
it is similar in the types of sales they have, nearly identical in merchandise, and offer the same
types of store service. Younkers is also another department store that has done better in upkeep
of their vast inventory and variety better than JCPenneys. How do these companies do it, and
what can JCPenney do to get back on track with them?
Instead of trying to appeal to a broad market of people, JCPenney needs to take a step
back and reevaluate what the company has done best in the past. That category is currently
business wear and home goods because of their great prices. JCP has tried to redirect their sales
with promotional savings, imitating competitors with new rewards cash, and the JCP credit card
allows for other rewards as well. It has helped them draw people back, get the company updated
and more modern but its not the saving grace they need. JCPenney's has long prided them
selves on having high quality products. The company has a strong quality control team of
trained quality control auditors and factory inspectors (JCPenney, 2014). They need to continue
to carry this into the future and show customers how their quality is better than other department
stores. Also, by adjusting their target market back to a slightly older focus it will set them apart
from other department stores. They can pick up the unattended target market and bring in a solid

new customer base, which will be older customers instead of younger ones. Some might say it
isnt worth the time securing an older customers base, but many of these women and men in their
mid 30s, 40s, and 50s have children or teens that they regularly take with them on errands and
shopping trips. Going through the store with them is bound to have another article of clothing
bought and introduces the younger clientele to the JCPenney culture.

Trend Board

Mood Board

Professional Wear Perceptual Map: The four product we chose for our professional wear line are
a sleeveless dress, straight leg pants, pencil skirt, and a two button jacket. All of these items are
staple items that every person who dresses professional would need in their closet. The
sleeveless dress is more expensive than all of the rest of the professional wear and that is why it
would be placed in the premium section.

Home Goods Perceptual Map: The four items we chose for our home goods line are baking
dishes, window panels, fabric shower curtains, and 600tc bed sheet set. The baking dishes are
considered a staple items because it is used in many households and is affordable. The window
panels are needed in most homes but are considered more of something that is a decoration in
many homes. The ones offered at JCP are more expensive than other retailers. Fabric shower
curtains can be staple items or fashionable items, it depends on what type of shower the customer
has in their home. Since the fabric has a fun print we put it in the fashion area and it is expensive
compared to other retailers. Bed sheets are staple items and this particular item is more on the
pricier side then affordable.

Sales Forecast for Proposed Line/Offering

Trend Forecast Interior: Bold light colors are back with neutral toned walls and furniture.
The accessories are what its all about this year. Pillows to accent the color of your bed or
couches to colorful vases to bring out that light blue in the white walls. Even bright light blue
seats to bring out a color from a rusted wall. Modern sculptural shaped accessories are in from
crazy vases to bright pastel colored lanterns mixed in with art deco furniture. In the bathroom a
pastel sink to match the textile pattern of the walls or tiles. In the kitchen less knobs and hooks
the better. Its all about hiding those cabins. Textile patterns are simplistic organic modern
shapes.

For the Spring/Summer 2016/2017 season, there are many different colors forecasted for
the lifestyle and interior palette. Research from WGSN suggests that there will be peaches and
greens within the color pallets for the 2016/2017 interior color forecast (Fashion Forecasting
2016, 2014). For the particular color palette of soft pop, playful, feminine, pastel focuses
colors are present as well as friendly and welcoming shapes. When researching the offerings for
JCPenney as well as their competitors, we found that they were lacking in offerings that catered

to the 35-55 age bracket. Companies in todays world are concentrating on catering to the
younger generations and the retired generations and they arent concentrating on the ages that
fall between the younger and the older retired generations. Offering products that accommodate
those who are 35-55 will set JCPenney apart from their competition.
For this special line offering for 35-55 year olds, partnering with Tracy Reese will drive
consumers of this age group to buy from JCPenney because Tracy Reese typically sells to an
older target market. We will be offering a home decor collection and also a business wear line
which will cater to women. The unique patterns and home decor products are designed
specifically for JCPenney which makes the line exclusive and give the consumer a sense of
luxury and at the same time providing these goods at a fair price. There is an increased interest in
items for the home and as stated before, clothing for women ages 35-55 is not prevalent in
todays retail industry and providing this age group the clothing that they desire will drive sales
and increase JCPenneys presence in the retail world. We also want our products to be of high
quality sense Tracy Reese is considered to be a high end designer but we also want to continue to
cater to the needs of the consumer which is why the price point starts at $45.00 and the highest
price for this exclusive line is $250. A little more than the customers paid before but still in the
general price range. The main priority for our womens professional wear line is to provide
women with basic pieces such as blazers, skirts, pants, and dresses so they have classic basic
pieces that they can pair with anything. These are items that women are constantly looking for
which is a good way to boost sales and give the consumer in this age bracket what they are
looking for. In our home collection the main focus is things to dress up a room for example
sheets, curtains, and shower curtains. Another item in the home goods collection is bake ware,
which is something that is always needed by the consumer because of its versatility in the
kitchen. The colors we have chose fall into the color palette for the Spring/Summer 2016/2017
season which makes these items even more of a priority due to the patterns that are in the
clothing and the patterns that are on the home goods items.

As the companys basic mission statement is Do unto others as you would have them do
unto you., They are really customer focused firm. To be more specific, they are performing
their business based on 9 principles but Community, Innovation, and Quality is the most
important principles they value. We care about and are involved in our communities. We
encourage creative thinking and intelligent risk taking. We strive for excellence in our work,
products, and services. (Farfan) New line offering is seemed to be essential because the sale of
the firm has been declined during the recent years, and some of their stores are even closed in
some state. There should be a reason why their sales have been declined recently. As they strive,
the remodeling their service of business wear and home goods are effective to return their
customers back to the store. As business wear and home goods are always common and steady
seller in all retailer, the company need a unique strategy like new line offerings to target their
customers. By providing nice looking design with a reasonable price would always be the key
point to succeed in the retail market. (Im not sure this is right. I will fix it tomorrow after class.)
JCPenney has had 4 straight years of massive losses (Investopidia 2015). We are
proposing JCPenney focuses on professional business wear. One of the companys strong points
is the business wear section. Focusing on this target market will generate profits for the
company. When people are shopping for business wear they want those quality items at a good
price that will fit them perfectly. Customers want these items to be staples in their wardrobe that
will last through daily wear.
JCPenney believes that in the coming years they can earn an additional $750 million in
sales of home accessories with an emphasis on bedding, bath and window treatments

(Investopedia 2015). Home goods is another one of the companys big money makers and
focusing on revamping this area and making it a focus of the company can earn them this profit.
While home goods is a profitable portion of the company JCPenney should focus more of the
home supplies and accessories that the target market sees as necessities and focus less on home
dcor items. Designating more of their retail space and their catalogue to these needed home
good items in kitchen, bath, bed and window treatments will increase the sales through these
channels.
Partnering with Tracy Reese: Carrying some of Tracy Reeses designs, which opened in
1998 in the store would bring a higher level of design. She is known for dressing Michelle
Obama and Taylor Swift. Tracys designs are very modern and elegant with a lot of beautiful
textile patterns. Partnering with her would bring more clients especially for Tracy Reeses home
goods that range from many beautiful colors and textile patterns. Her Interior taste is urban
modern with accents of light or bright colors. This years bed collection is feminine Chic,
which includes pastel colored prints and embroidery.
Economic Cycles: Due to the frequent change of the CEO, the firms are experiencing
sales decrease in the recent years. Ron Johnson and his new management team changed a
company structure, which leads the firms sales decrease. The major drawback that he missed
was reducing the coupon services to the customers, which was the important marketing strategy
that company strives. Since the CEO of the company is replaced to Ullman last year (Tabuchi
2014), but still the firm need to recover their financial damages they have. As they are
experiencing some difficulties, it is a good chance to introduce our new product lines to return
the target customers. Our new product line is trying to provide a numerous kinds of business
wear and home goods with a reasonable price and coupon services as well. Therefore, the
reintroduce of coupon services and new product offerings would increase the firms financial
shape and brand image as well.
Cultural and Artistic Trends: As the collaboration of the warm colors and cool colors, the
color trends of 2016 Spring/Summer season is basically warm colors. As our new product line is
proposing the tailored business wear, and home goods, these color trends are suitable for our new
product line. During the last few decades, people used to decor their house in an achromatic
color scheme such as white, grey, and black color basis. However, to differentiate our new
product line with other competitors, we should provide the new type of home goods based on a
different color scheme, which they did not have before.
Consumer Preferences: As the company has gone through the depreciation of their sales
until now, they should have thought about what is the main target point that customer needs. As I
mentioned above, firms sale decreased as the firms marketing strategy changed. The original
marketing strategy, which the customer liked was the variety of coupon services. By suggesting

our new product line, the company must understand customers need, and preferences as their
basic mission statement. Understanding consumers preference is essential to run a business
because the company has to give an image to the consumer that JCPenney is suitable department
store to shop. Therefore, JCPenney earns customer loyalty by establishing a new marketing
strategy and will bring a good brand image, which is related to the firms sale.
Social Trends: Connected Living (Forbes, 2014) is the number 1 social trend for the
coming decade. Everyone is using the Internet and mobile handheld devices to stay connected to
family, friends, and their businesses. We are constantly connected through technology to our
work and home lives, as well as the Internet for entertainment purposes. JCPenney will need to
keep up with their mobile site designs to engage customers through these devices. Having a well
designed, great looking and easy to use mobile website will be key to keeping up with the social
trends and connectivity of their customers.
Lifestyle Trends: By viewing the world from a different perspective, consumers are
returning to a more simplistic approach. Appreciation for natural beauty is the inspiration for
cooler colors and earthy elements. The womens wear line we are offering is a fresh take on the
simplistic approach by providing the consumer with basic pieces to incorporate into their
wardrobes and at the same time collaborating with a well known designer. An unexpected
feminine touch is added to the basic womens wear, which is something that will be big this
season. The consumer is going back to more natural fibers and this is evident through the
materials used in the professional business wear collection made exclusively for JCPenney.
Brand and Other Attribute Preference Trends: Consumers are very concerned about
brand status and recognition among peers. Carrying or wearing higher-end brands associate with
money or a higher social class. Target has gained much popularity by partnering with higher-end
designers and selling garments under the designer label for the average consumer. Recently,
Target partnered with Lilly Pulitzer and they sold out of products hours after opening up to the
public. This is a brand trend that will likely stay and have worked for other retailers in the past,
not just Target. Consumers also feel safer with products made in America and moving even some
production like cookware stateside. Movements like these make American consumers feel better
about the places they buy their products. There is a push for the elimination of child labor,
underpaid workers, and poor working conditions.

Womens Professional Business Wear

Product &
Description

Style
#

Size

Color

Material

Suggested
Retail Price

8321

2,4,6,8,
10,12,14
,
16, 18

Black, Light
Grey, Tan, Plum,
Red, All colors
lined with prints.

76% Cotton,
21% Rayon,
3% Spandex

$100

8322

2, 4, 6,
8, 10,
12, 14,
16, 18

Black, Light
Grey, Tan, Plum,
Red, All colors
lined with prints.

76% Cotton,
21% Rayon,
3% Spandex

$60

8323

2, 4, 6,
8, 10,
12, 14,
16, 18

Black, Light
Grey, Tan, Plum,
Red, All colors
lined with prints.

76% Cotton,
21% Rayon,
3% Spandex

$50

8324

2, 4, 6, 8,
10, 12,
14, 16, 18

Black, Light Grey,

Tan, Plum, Red,
All colors lined
with prints.

76% Cotton,
21% Rayon,
3% Spandex

$70

Sleeveless
Dress

Straight Leg
Pants

Pencil Skirt

2-Button
Jacket

Home Goods

Product &
Description

Style #

Size Range

Color
Options

Material

Suggested
Retail Price

4501

9x9, 9x13,
11x11, 8x11

Cream, Pink,
Sky Blue,
Peach, Pale
Yellow,
Mint, Aqua

Stoneware

$45-55

4521

50W x 63L
50W x 72L
50W x 84L
50W x 95L
50W x 108L

White, Pink,
Sky Blue,
Peach, Pale
Yellow,
Mint, Aqua

80%
Polyester/
20% Cotton

$50-90

4541

72x 72

Grey/Yellow, 80%
Mint/Pink,
Polyester/
White/Aqua 20% Cotton

$55

4561

Twin, Full,
Queen, King,
Cal King

Grey, Pale
Yellow,
Aqua, Coral,
Mint

$110-250

Baking Dishes

Window Panels

Fabric Shower
Curtain

600tc Sheet Set

Egyptian
Cotton

Sales Presentation for Line/Offering & Marketing Strategies

JCPenney's new line Tracy Reese New York, sold exclusively at JCPenney will bring
back the older demographic that the store has lost in recent years. New products in the Home
Goods and Professional Wear departments will get consumers excited again about shopping at
JCPenney. We have created five new marketing strategies to help promote our new line, Tracy
Reese New York. This new line and marketing strategies will allow consumers to better
differentiate JCPenney's from competing department stores, such as Macys and Yonkers, and
build new customer loyalty.
Co-branding will give JCPenny a new designer look and help them compete with Macys,
who has been partnering with celebrities for years. Tracy Reese is an emerging designer, gaining
popularity by pairing bold prints with conservative designs. Prints have always been popular in
bedding, cookware, and other home good sections, therefore by partnering with Tracy Reese,
who is known for her innovative prints, the new line will bring new designs to JCPenny that
other competing stores
cant carry. Consumers that
are fans of Tracy Reese,
but could not afford her
designer prices, will finally
be able to afford some of
her products being sold at
JCPenney. The brand will
generate new clients at
JCPenney along with
expanding their Home Goods market. We will measure the newfound success with our Tracy
Reese New York Home Goods line by measuring its sales figures against other Home Goods
lines carried at JCPenney.

JCPenney will become a store known for giving customers experiences that no other
department store has. We will offer cooking lessons and food events, specifically for the Tracy
Reese line of bake ware, to get consumers in the store, meeting people, and having a great time.
Our first marketing strategy will expand upon the entertainment aspect of the 4-E experimental
theory. Consumers will learn about new products available to them and have an opportunity to
learn how to use the items they just bought and expanded their horizons. Brand loyalty will be
built by the fun experiences consumers have during this event and the quality of the product
being used. Music, food, new friends, and a guest professional chef will provide the
entertainment for consumers as they use and learn about the new products JCPenney is offering.

As an incentive for
attending the fun cooking
events, consumers will
receive a special coupon
for a 20% off total
purchase of Tracy Reese
bake ware. These cooking
events will take place
Thursday night between 8
and 9pm or during
afternoon hours on the
weekends. Having an
event during the weekday
will give parents the
chance to attend after their children have gone to bed or people that are busy during the
weekends. We will review how well the promotional strategy worked by assessing how many
bake ware and cookware items were sold before and after the classes/events.
Another 4-E marketing experimental strategy that JCPenney will use to promote the new
Tracy Reese New York line is education. The cooking lessons and events will not only give
consumers an entertainment event, but also an educational event. Consumers will learn what new
bake ware items are offered in our line and expose them to other Home Goods items sold at
JCPenney. Consumers will get the opportunity to learn how to use the new items they just
bought from professional chefs and gain hands on experience learning new recipes that they can
make easily at home. JCPenney will soon become the leading department store for Home Goods
items, by educating their consumers about the products they sell, their quality, and how many
different recipes they can be used for.
JCPenneys 3rd marketing strategy will be to increase the value of their customer service.
We will increase the value of our customer service not limiting returns to only 90 days and
having consumers be allowed to return any product purchase with a valid receipt. We would also
like to offer online chat abilities with JCPenney representatives, so customers can ask questions
and quickly be given answers about products. New training programs will begin to give sales
associates better knowledge on how to provide excellent and consistent customer service.
Improving customer service will lead to more customers returning to JCPenney and positive
communication to other people about the store, leading to future sales. We will measure the
performance of our new marketing strategy through surveys about customer service and
customer feedback.

To stay relevant in the modern age implementing the use of technology and social media
is essential to a companys success. The trickle down effect does not happen as often anymore
with trends. Internet access has allowed bloggers to become a force within the fashion industry,
influencing all who follow them. Having said this, JCPenney will partner with a top fashion
blogger who will promote the store and brands within it. Posts will be very visual, research
shows that people are more likely to read or spend more time on posts that have a visual aid. s
are necessary in a wardrobe. Other posts will be things such as top ten lists, must haves, etc.
Consumers want to be trendy yet know what classic piece Through JCPenneys social media
pages or the bloggers there will be contests every so often to keep the consumers engaged,
excited, and thinking about the company. Through greater interaction with the customers
JCPenney will strengthen their brand image and stay in the public eye.
Our final market strategy will be to offer bonus points every time a customer shares
promotional events, news, contests, or products
bought from JCPenney. By offering consumers
bonus points that can be used to achieve
coupons for shopping at JCPenney. JCPenney
will be able to identify consumers who earn
these points by whoever shares their posts on
Facebook or other social media websites. This
will allow JCPenneys potential customer
market to expand every time a promotional
event, news, contests, or products are shared to
peoples social media web-pages. People trust
their friends opinions and want to have what
their friends have, so by giving consumers an
incentive to share what they bought or like
about JCPenney we are gaining new customers.
JCPenney is receiving free advertising and company awareness through other peoples social
media pages. Success for this new market strategy will be based upon the number of points being
earned and the amount of coupons being sent out compared to figures from before this strategy
was in place.

References
Farfan, B. (n.d.). JC Penney Mission Statement - Vision, Headquarters and Founders Facts and
Trivia About the JC Penney Stores and Brand. Retrieved April 20, 2015, from
http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/JCPenney-Mission-Statement.ht m
Investopedia. (2015, April, 15) Will J.C.Penney Ever Make Money Again? Retrieved on April,
15 2015 from www.investopedia.com
J.C. Penney. (2014). Product Development and Design. Retrieved March 5, 2015 from
www.jcpenney.net/guide/quality/default.aspx
Linens n Things | Bedding, Comforter Sets, Sheets, Bed in a Bag, Bath Towels & Dorm
Bedding. (n.d.). Retrieved April 22, 2015, from
http://www.lnt.com/search/2/15988/1/1/?Order=11&Color=&Filter=5.
Singh, Sarwant. (2014, May 12) The 10 Social and Tech Trends That Could Shape the Next
Decade. Retrieved on April 22, 2015 from www.forbes.com
Tabuchi, H. (2014, October 8). Return to Traditions Spurs Optimism at J. C. Penney. Retrieved
April 20, 2015, from http://www.nytimes.com/2014/10/09/business/return-to-traditions-spursoptimism-at-j-c-penney.html?_r=0
Pakistoff, Robert(2014, April 9). Ron Johnson Ousted As J.C. Penney CEO. Retrieved March
10, 2015, from http://www.forbes.com/sites/marketshare/2013/04/09/ron-johnson-ousted-asjcpenney-ceo/
Wahba, Phil. (2014, December 22). 10 classic J.C. Penney house brands from 1914 to now.
Retrieved March 5, 2015 from fortune.com
WGSN - Fashion Trend Forecasting & Analysis. (2014, July 31). Retrieved April 22, 2015, from
http://www.wgsn.com/en/