Carolyn Black's List: Article analysis 2 BUS APP SEMINAR

• Johnson aims to create 80 to 100 highly-branded “stores within a store” (e.g. a Martha Stewart boutique)
• The lynchpin of J.C. Penney’s revitalization is a new “Fair and Square Every Day” pricing strategy. The plan stems from Johnson’s realization that three-quarters of everything sold at J.C. Penney is typically sold at a 50% discount from list price
• To be clear, Fair and Square Every Day pricing strategy is different than Wal-Mart’s everyday low prices. J.C. Penney’s Every Day prices will not be as low as the biggest discounts that it once offered. Instead, its pitch to consumers is why play the “wait for the rock-bottom price” game when Penney offers “pretty good” prices every day?
• My verdict? Remember those Orson Well’s Paul Masson wine commercials? Fair and Square pricing is a strategy being implemented before its time.
• Quite simply, J.C. Penney lacks the differentiation to make this pricing strategy successful. J.C. Penney’s products are fairly homogenous. When selling a relatively undifferentiated product, the only lever to generate higher sales is discounts. Even worse, if competitors drop prices on comparable products, J.C. Penney’s hands are tied — it is a sitting duck that can’t respond.

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