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JCPenney
Ariana Conklin, Michelle Sanchez & Jessica Massey
AMJ PR Agency
JRN 350
22225871
October 13, 2013
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SITUATION ANALYSIS
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Description of Organization
JCPenney is one of the largest apparel and home-furnishing retailers in the nation. Founded in
1902 by James Cash Penney, JCPenney has grown to be the second largest department store and the
largest catalog merchant in the United States (“J.C. Penney Corporation,” 2013). The company operates
more than 1,100 stores in 49 states as well as in Puerto Rico and Mexico (2013). The majority of
JCPenney stores are located in suburban shopping malls, while a small selection of them are standalone
stores. During the 1980s, JCPenney reorganized their company from a mass marketer into a fashionoriented national department store (Nolen, 2010). Today, the mid-range retailer is able to provide their
customers with a mixture of private, national and exclusive brands.
Major Products and Services
JCPenney retail has a variety of different departments. There is the apparel department that
consists of clothing for women, men, juniors, youth, and infants. There are also products to buy for
homes, which can be for any room: kitchen, family room, bedroom, bathroom, outside, etc. There are
also a variety of appliances and home décor items that can fit anybody’s desires. In some department
stores there are shoes, accessories, handbags, jewelry, and watches. JCPenney is mostly known for their
clothing department, but since the company has grown there has been more attention on the other
departments.
Market
JCPenney offers high quality products for a low price to their target market. There are
JCPenney’s located all across the country for the target market to enter and purchase many different
kinds of products. While many stores target a young audience, JCPenney has done the opposite
throughout the past years. More than half of the customers who shop at JCPenney are older than 55
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years old and only 20 percent of the customers are younger than 35 years old (Stock, 2013). JCPenney’s
competitors generally target a younger demographic, so this differentiates JCP from other stores.
In addition, 29 percent of Penney’s customers make less than $35,000 a year (2013). This
information shows that JCPenney shoppers are concerned about the price of their products. JCPenney
has low cost products that keep their target market coming back. They are generally used to shopping at
places that have lower cost products such as discount stores.
JCPenney does not target a certain culture because they accept customers of all ethnicities.
JCPenney stores are located all around the country for people of any ethnicity or religion to come in and
shop.
Organizational Structure
JCPenney’s organizational structure is composed of three levels, the board, N-1, and N-2. The
first level, the board, is made up of JCPenney’s CEO, the chairman of the board and nine directors.
The second level in JCPenney’s organizational structure, N-1, is composed of the CFO and the
Executive Vice Presidents (EVPs) of JCPenney stores, design and sourcing, legal and secretary, human
resources, merchant, the square, children’s apparel, intimate apparel, marketing, operational strategy,
and planning and allocation. The CFO and all 11 of the EVPs in the N-1 level report to JCPenney’s
CEO.
The third level in JCPenney’s organizational structure, N-2, is composed of the EVPs of
accounting and control, merchandising, handbags and shoes, the men’s division, women’s apparel,
merchandising and marketing, Sephora inside JCPenney, communication, controller, digital commerce,
property development, the salon, the supply chain, and visual presentation. The EVP of accounting and
control reports to the CFO and the EVPs of merchandising, handbags and shoes, the men’s division,
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women’s apparel, merchandising and marketing, and Sephora inside JCPenney all report to the
merchant.
A better representation of JCPenney’s organizational structure is shown in Figure 1.
Figure 1. Chart shows the organizational structure of JCPenney. From “JCPenney,” 2013, The Official
Board.
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Mission
JCPenney’s mission statement defines how the company expects to work and win together in
order to achieve superior performance. They outline eight “Winning Together Principles” that are the
mission for their employees. Each principle is associated with a word. These words are Associates,
Integrity, Performance, Recognition, Teamwork, Quality, Innovation, and Community. Associates mean
that they value, develop and reward the contributions and talents of all associates. Integrity means that
they act only with the highest ethical standards. Performance means that they provide coaching and
feedback to perform at the highest level. Recognition means that they celebrate the achievements of
others. Teamwork means that they can win together through leadership, collaboration, open and honest
communication, and respect. Quality means that they strive for excellence in their work, products, and
services. Innovation means that they encourage creative thinking and intelligent risk taking. Community
means that they care about and are involved in their communities.
Organizational Philosophy
In regards to the company’s organizational philosophy, JCPenney is set towards being more
formal rather than informal. It is seen as formal and corporate because of the way the employers are set
up. There is the JCPenney Corporate Headquarters, which is located in Plano, TX. The headquarters
help oversee all of the other JCPenney stores located around the country. JCP has a CEO and board of
directors that help oversee the employers beneath them. The organizational structure of the company
shows that JCPenney is more formal and corporate because of the higher-powered people working for
JCPenney are at the top of the chart. Every employee below this has less and less power and has a
manager who is in charge of them and their work. This organizational structure helps show the
corporation functions of JCPenney.
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Financial Information
In the past year, JCPenney has borrowed more than $3 billion dollars to fund their company and
try to get their image back on track (Coleman-Lochner, Jinks, & Xu, 2013). JCPenney received a $2.25
billion loan from Goldman Sachs Group Inc. (2013). According to JCPenney’s CFO, Ken Hannah, this
loan was given to JCPenney in order to strengthen the company’s poor financial position (Rooney,
2013).
Another group that JCPenney has been working with is the CIT group. They have currently
loaned JCPenney $1.5 billion to fund the shipments that they make. The CIT group is considering
stopping their funding though, unless the company gives them a detailed financial report of their
earnings. Earlier in August, JCPenney denied the rumor and reassured the public that CIT will still be
funding their company (Sahagian, 2013).
Right now, JCPenney’s financial standing is very poor. Their income is negative $1.61 billion
and their sales growth is negative 24.8 percent (“J.C. Penney Co Inc.”, 2013).
Board of Directors
JCPenney’s board of directors is made up of 10 individuals, including the CEO and Chairman of the
Board. The board of directors and their professional affiliations are listed below.

Mike Ullman, CEO of JCPenney

Thomas Engibous, JCPenney Chairman of the Board, Retired Chairman of the Board for Ingram
Micro Inc.

Colleen Barrett, Director of the Board for JCPenney, President Emertus of Southwest Airlines
Co.

Geraldine Laybourne, Director of the Board for JCPenney, Founder and Former Chairman and
Chief Executive Officer of Oxygen Media
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Javier Teruel, Director of the Board for JCPenney, Retired Vice Chairman of Colgate-Palmolive
Company Partner, Spectron Desarrollo, SC

Ronald W. Tysoe, Director of the Board for JCPenney, Former Vice Chairman of Federated
Department Stores, Inc.

Kent Foster, Director of the Board for JCPenney, Retired Chairman of the Board for Ingram
Micro Inc.

Leonard Roberts, Director of the Board for JCPenney, Retired Chairman and Chief Executive
Officer of RadioShack Corporation

R. Gerald Turner, Director of the Board for JCPenney, President of Southern Methodist
University

Mary Beth West, Director of the Board for JCPenney, Executive Vice President and Chief
Category and Marketing Officer of Kraft Foods Inc.
Competition
JCPenney has several big competitors including Kohl’s, Target and Macy’s. If JCPenney
dissatisfies a customer, they are going to be more likely to shop around at these competitors. Customers
want high quality merchandise for a low price. Target has the “cheap-chic” image and Macy’s rolls out
the price promotions (Wei, 2013). These are ways that keep the customers coming back. Target has been
successful with keeping their trends up-to-date with affordable prices. Macy’s holds on to their image
with affordable price promotions and they decrease in price for customers who are looking to buy higher
quality products (2013). Target, Kohl’s, and Macy’s always keep up with what the public is looking for
from season to season. They have celebrities bring in their fame and launch new clothing lines.
JCPenney has to compete with many different retailers who are all trying to do the same thing, which is
getting more customers and keeping them around. The reason JCPenney is unsuccessful at being ahead
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of the competition is because of their merchandise quality. JCPenney also has to work against retailers
below their rank, such as T.J. Maxx, which are off price retailers. That is why JCPenney needs to focus
on their product quality along with its apparel offerings, so that they can prevent their customers from
turning to apparel offered by their cheap competitors. Another foundation of competition is Wal-Mart,
who has apparel makers from around the world. They sell comparable quality, with a competitive price
(2013). Instead of wasting money on their management team, JCPenney should be thinking of ways to
rebuild their image and customer base.
Media Coverage
JCPenney has been without their official marketing leader for over a year now. They have had a
hard time keeping a positive brand image in the media ever since their failed transformation plan by
their former CEO. JCPenney is having a hard time bouncing back from their problems and sales have
not been increasing as much as they would like. The retailer has been accused of alienating customers,
resulting in customers bashing JCPenney all over the internet. Recent media coverage shows that
JCPenney has been apologizing to the public about the changes in the company’s approach. Also, recent
coverage shows that the people who are trying to lead JCPenney are all not on the same page.
Organization Media
One of the main tools JCPenney uses to communicate with their external audiences is social
media. Although, the company’s social media team has been having a hard time keeping up with attacks
from customers on their social media sites. One way the company uses social media is by promoting
their ads on Twitter and Facebook. This has helped get their name out to the public, considering that
there are so many users on social networking sites today. The retailer has been using commercial ads to
promote their “back-to-school” campaign to students. The only problem with this ad is that parents
believe that it has promoted bullying (Velez, 2013). JCPenney’s standard website has also been used to
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communicate to internal and external audiences. The front page on the website offers deals such as free
shipping and special sales that are currently taking place. Some of the ads that you see on the webpage
are promoted through social media in order to get consumers to go to their website and make a purchase.
The internet has been JCPenney’s primary way to reach external audiences and carry out their campaign
messages.
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PROBLEM STATEMENT
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JCPenney has been faced with numerous issues over the past couple years. Their reputation has
diminished ever since the firing of two CEO’s and their marketing leader. The first CEO, Mike Ullman,
was fired in 2011 and the second CEO, Ron Johnson, was fired from JCPenney in 2013. Ever since their
marketing leader, Michael Francis, left over a year ago, their brand image has continued to spiral
downwards. JCPenney has been receiving a lot of bad press over the past year, which has resulted in a
loss of customers to the company.
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PUBLIC RELATIONS PLAN
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Mission Statement
JCPenney’s mission statement defines how the company expects to work and win together in
order to achieve superior performance. They outline eight “Winning Together Principles” that are the
mission for their employees. Each principle is associated with a word. These words are Associates,
Integrity, Performance, Recognition, Teamwork, Quality, Innovation, and Community. Associates mean
that they value, develop and reward the contributions and talents of all associates. Integrity means that
they act only with the highest ethical standards. Performance means that they provide coaching and
feedback to perform at the highest level. Recognition means that they celebrate the achievements of
others. Teamwork means that they can win together through leadership, collaboration, open and honest
communication, and respect. Quality means that they strive for excellence in their work, products, and
services. Innovation means that they encourage creative thinking and intelligent risk taking. Community
means that they care about and are involved in their communities.
Goal
Introduce JCPenney to the next generation.
Assumptions

A younger demographic will be attracted to our new line of clothing.

More customers will come and shop at JCPenney.

With the new line of clothing and more customers at JCPenney, overall sales will increase.
Research
Focus groups will be used to get the public’s opinion about what they expect to come out of
JCPenney’s new image. These focus groups will consist of men and women ranging from 16 to 30 years
old. It is important to get the customers’ feedback out of the research because the new collection will be
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targeting people in the same age range and JCPenney values their customer’s opinion. Also, focus
groups will be used to see how well they like the goal we are presenting.
Objective
Achieve a higher volume of customer traffic by rebuilding a new and improved image of
JCPenney stores nationwide to men and women 16-30 years old by 25% within the next 10 to 12 months
of the campaign.
Strategy

Utilize social media to demonstrate JCPenney is their place to go for clothing.

Communicate the new celebrity endorsed clothing line that JCPenney has developed to the target
audience.
Audience
For both of our strategies our audience will consist of the following:

Young adults ages 16-30

Low-to-middle class socio-economic status

Either in high school, college, or just entering the workforce with a lower paying job

Any religion

Any ethnicity

Any sexual orientation
Key Message(s)

JCPenney is the place to go to get the latest fashion trends.

The low prices will allow customers to get more for their money, without breaking the bank.

Wearing the new celebrity endorsed clothing line will make customers look and feel like they are
a celebrity too.
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Theme
It’s not a dime; it’s a Penney.
Tactics/Tools

Use social media for promoting special events, sales, contests, and new line of clothing.

Use press releases to gain publicity and inform the public about our new approach.

Send in-store promotional offers via text and e-mail to drive customer traffic to the store.

Create a unique shopping experience on their website to drive more traffic to the website.
Calendar/Timetable
Celebrity Approval
Fashion Creators
Press Releases
Start Date
End Date
Budget
New Website
Email Promotions
Texting Promotions
11/13
12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14
Budget

Celebrity – $50,000

Press Releases – $80 per hour the staff works on sending out press releases

Social Media – $80 per hour the staff works on updating social media pages

New Website – $80 per hour the staff works on creating new website
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Emailing Promotions – free of charge

Texting Promotions – $20,000 one time fee
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Evaluation
Social media usage will be measured on Twitter and Facebook. We will keep track on the
amount of likes, retweets, and hashtags used, as well as view comments from the public. Also, news
releases that are viewable online can be monitored back to “sharings” on Twitter and Facebook. Keeping
control of the amount promotions from the e-mails and texts that are used online and in the store will let
us know how much the customers use them. We will also compare sales from each month of the
campaign with the sales of that month during the previous year. In addition, traffic counters will be
installed and monitored in each store to measure the amount of customers going in and out on daily
basis. The information obtained from the traffic counters will be compared on a month-to-month basis in
order to evaluate whether or not customer traffic is increasing and ultimately the success of the
campaign.
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References
(2013). Board of directors. JCPenney. Retrieved September 28, 2013.
(2013). JC Penney. The Official Board. Retrieved September 28, 2013.
(2013). JC Penney: CIT supporting supplier deliveries. The Associated Press. Retrieved
September 17, 2013.
(2013). J.C. Penney Co Inc. MSN Money. Retrieved September 18, 2013.
(2013). J.C. Penney Corporation, Inc. – company profile, information, business description, history,
background information on J.C. Penney Company, Inc. Reference for Business. Retrieved
September 28, 2013.
Coleman, L., Jinks, B., & Xu, J. (2013) J.C. Penney Said in Talks to Raise More Money for Turnaround.
Bloomberg. Retrieved September 24, 2013.
FarFan B. (2013). JC Penney mission statement - winning together principles for superior service.
Retail Industry. Retrieved September 28, 2013.
Nolen J. (2010). J.C. Penney Corporation, Inc. Encyclopedia Britannica. Retrieved September 28, 2013.
Rooney, B. (2013). J.C. Penney scores $1.75 billion loan from Goldman Sachs. CNN Money. Retrieved
September 26, 2013.
Sahagian, J. (2013). J.C. Penney: CIT Group Still Funds Us. Wall St. Cheat Sheet. Retrieved
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September 25, 2013.
Stock, K. (2013). J.C. Penney’s shoppers are older, poorer than you thought. Bloomberg Businessweek.
Retrieved September 18, 2013.
Wei, J. (2013). How can J.C. Penney stack up to its competitors. The Motley Fool. Retrieved
September 25, 2013.
Velez, M. (2013). J.C. Penney back-to-school ad ‘promotes bullying,’ parents say. The Huffington Post.
Retrieved September 17, 2013.