Marketing Presentation’s Essay
Chapter 20: The Sales Management Process
Executive Summary
JCPenney's sales have been struggling since 2008. In that 5 year period JCPenney
has been looking for a way to dig its way out of a hole. They have tried hiring new
executives from successful companies such as Apple, but that seemed to only add fuel to
the fire. The problem with JCPenney is that it is having a hard time staying up to date with
its customer’s taste and preferences, and as they fail to impress their customers more and
more are moving to competitors, and once a customer is gone, it is very difficult to bring
them back. Perhaps one of the things that JCPenney should focus on is figuring out who
exactly it is that they want to target. JCPenney does however have an competitive
advantage over other similar retailers that could possibly be their saving grace, and that is
that they have leasing agreements with other store such as Sephora and Seattle’s Best
Coffee to have store’s placed within their locations. Even still JCPenney has a monstrous
task before them as they attempt to leave behind their worst year ever in 2012 with a loss of
$985 million dollars, and try to work their way back into the green.
Background
JCPenney had suffered economical complications for several years. They have
overcome many obstacles but success seems to remain out of reach. Ron Johnson, who
was the former Senior Vice President of Retail Operations at Apple, was recruited to
become CEO of JCPenney to turn things around. However, the company continued to
decline and as a result Johnson was fired. New CEO Mike Ullman took over and
implemented the old coupon strategy in an attempt to rescue the department store chain.
The problems stems from the company’s inabilities to be relevant to consumers taste
and to capture the consumers with innovation. People are always looking for new trends,
and yet it seem JCPenney is always two or three steps behind. It appear the company does
not have the resources to reach the right target. They need to first investigate the needs of
the consumer by doing more market research and conducting study groups to reveal
problematic areas. JCPenney is hurting on sales because of their incompetence to target
segment. JCPenney has nothing to bring consumers back after they visit the store.
JCPenney needs to start giving surveys or start investigating on how to improve their sales.
Analysis
My team focused on the Sales Management Process and we each did an analysis of
the three main processes such as sales formulation, sales implementation, and sales
evaluation. We decided to focus on JCPenney. JCPenney Corporation uses a SWOT
analysis to create a quick overview of a company’s strategic situation. Listed below is the
chart of the SWOT analysis that was provided by YouSigma. The textbox basically
summarizes the internal and external factors of JCPenney Corporation.
The main problem with JCPenney is that it reported a 26 percent decline in thirdquarter sales at stores open at least a year. “Penney said its net loss had narrowed to $123
million, or 56 cents per share, in the third quarter ended Oct. 27 from $143 million, or 67
cents per share, a year earlier.” (CNBC) JCPenney had to look for a new way to increase its
sales and came up with a new pricing strategy that was implemented by their then-new
CEO Johnson.
However, they made a big mistake when they changed to a new pricing policy. They
downgraded the quality of their merchandise in an attempt to keep profits up. This is what
happens when you have a board of directors that are not in the business and narrow focus
on profit to the detriment of the company. JCPenney was one of the last companies to have
lower sales and instead of working to improve what they had, they lost their customer. They
stopped producing items that sold. When you do this, you leave your customer with virtually
nothing to buy. The then-new CEO planned on making JCPenney from a promotionally
driven department store chain to one focused on presentation and everyday value for its
merchandise. As a result after doing calculations he decided to let go of 14% of its staff in
the Plano Headquarters.
Recommendation
We feel that JCP should first try to figure out who exactly they are targeting. It seems like
they are all over the place when it comes to a target audience. That would help them decide
whether to implement promotions such as everyday low prices, or the good old coupon in
the mail. With that being said, they should try hiring executives who are better at company
image rebranding. A strong sales force recruitment could also help better their competitive
position as well as retain and possibly build relationships with repeat customers. Like they
say, the best marketing is by the word of mouth.
Conclusion
If JCPenney were to utilize the Sales Management Process, then they might be able
to turn things around. So far, they have been making the right moves. They correctly fired
Johnson and temporary seated Ullman because Johnson’s vision which made him a star at
Apple was ill suited to JCPenney. Ullman reinstated their coupon and discount strategy, a
strategy that had long work well for the business in the past. JCPenney managed to secure
$1.75 billion dollars loan from Goldman Sachs which indicated that the global financier has
confidence in JCPenney and its climb back to success. However, their lawsuit involving
Martha Stewart and Macy’s ambition to claim her brand might deter JCPenney from their
path to success. Presently, despite promising steps it is anyone’s guess whether JCPenney
will succeed.
Work Cited
CNBC. "JCPenney Turnaround in Doubt as Sales Plummet." Yahoo! Finance. Yahoo! ABC News Network, 9 Nov. 2012. Web. 30 Apr. 2013.
YouSigma. "(SWOT Analysis)." YouSigma Comparative Analysis. J. C. Penney
Corporation, Inc., n.d. Web. 30 Apr. 2013.
"10 Mind-Blowing Facts About JCPenney's Epic Decline." Business Insider. N.p., n.d. Web.
30 Apr. 2013