What can marketers learn from JC Penney’s attempt to eliminate sales and promotions?

Question

Responses

Coupons are losing popularity in the 21st century.

Price is the biggest factor when consumers are making purchases.

There is a decreasing market for discount clothing retailers.

Consumers prefer the perception of great deals to overall low prices.

Answer 1

Marketers can learn several important lessons from JC Penney's attempt to eliminate sales and promotions:

1. Consumers Prefer the Perception of Great Deals: JC Penney's strategy to shift to everyday low pricing (EDLP) was met with resistance from consumers who were accustomed to sales and discounts. This indicates that many shoppers enjoy the thrill of a bargain and feel better about their purchases when they perceive they are getting a great deal, even if the everyday prices are comparable.

2. Price Sensitivity Matters: JC Penney’s experience underscores that price remains a critical factor in consumer purchasing decisions. While the objective of simplifying pricing may seem reasonable, neglecting the psychological appeal of perceived savings can alienate customers.

3. Understanding Brand Identity and Customer Expectations: Customers often associate certain brands with specific shopping experiences; JC Penney’s identity as a discount clothing retailer was tied to sales and promotions. Changes that conflict with established brand expectations can lead to customer dissatisfaction.

4. The Importance of Market Research: The failure of JC Penney's initiative points to the necessity of understanding consumer behavior through detailed market research. It's crucial to know what drives target customers’ purchasing decisions before implementing significant changes in pricing strategies.

In summary, JC Penney's experience highlights the importance of aligning pricing strategies with consumer expectations and the psychological aspects of shopping, which can often be pivotal in influencing purchasing behavior.