The company that I chose to address is
JC penny. This is because the sales of the company have been on a decreasing
performance for the recent past years. Its everyday low pricing strategy meant
to draw customers closer has in turn turned them away. The main issue that the
company has not addressed is the fact that they have told the customers what
the strategy is all about. The strategy of low pricing has also been used by
companies like Wal-Mart Stores Inc. it is important to note that more than 60%
of the sales of JC Penny are apparel. This makes shoppers mostly middle class
to use coupons to shop. As much as there have been efforts to revive the power
in its sales for the past three years, the company has not yet been successful.
The matter has gotten out of control to an extent of worrying shareholders
(Talley, 2012). For instance, the company has lost more than a third of its
value since a disastrous earnings report in mid-May, when Penney's posted a
$163 million loss and said sales fell 20% in the first three months of its
fiscal year. This is a threat basing on the competition that is currently being
experienced in the marketing environment.
To effectively do a turn around and
perform as it is expected, JC Penny has to come up with a strategy that will
bring a positive impact as far as marketing is concerned. A strategy that I
would suggest for the company to adopt to adopt is the use of customer
awareness of the company’s products and services to their customers and
potential ones. It is important for the company to move closer to the customers
and understand one another deeply. This will provide an opportunity for the
company understanding the consumer behavior and preference. I also think that
the company will able to learn new things from the company, and hence better
products their services (Talley, 2012). The company should also be aware that
at the current marketing environment, it is important for it to conduct a
marketing advertisement. The company should use all available resources,
including the social tools in internet marketing, in reaching out to the target
audience.
Netflix has paid a huge price to get
itself at the present situation that the company is in at the moment. First, it
is important for me to discuss initial success of the company, and I can say
that the company enjoyed massive customer subscription due to their DVD
subscription service, their low prices, and no shipping fees (Gunelius, 2012).
The company would receive subscriptions each quarter, but in a single quarter
in 2007, it lost more than 55000 customers. Costs incurred in licensing are one
kind of a cost that increases competition, and because of this, Netflix knew
that it was heading for trouble, so it had to do something. The company made
its significant change in July when it increases the fees for subscription by
$6. The change enabled Netflix to separate streaming subscriptions from its
newly named “Qwikster” DVD-only subscriptions business. Customers who want both
subscriptions now must pay $16 per month rather than $10 per month (Gunelius,
2012).
“As a result of the price increases,
Netflix lost 600,000 customers between the July 12, 2011 price hike announcement
and the end of September 2011. The company had projected it would end the third
quarter of 2011 with 25 million customers (down from its actual 25.6 customers
in June). However, the company adjusted that number and now expects to have
just 24 million customers at the end of September.” While choosing a strategy,
it is important for a company to select a strategy that will be in the best
interest of all the major players. It is important for a company to make sure
that all employees are satisfied and understand the decisions made.
Reference
Gunelius, S. (2012) Netflix Price
Increase Is Top Reason Customers Are Fleeing Available at
<http://aytm.com/blog/research-junction/netflix-price-increase/>
[Accessed on December 3, 2012]
Talley, K. (2012) Sales Plunge Another
23% at Penney The Wall Street Journal Available at
http://online.wsj.com/article/SB10000872396390443537404577580710364597848.html
[Retrieved on December 3, 2012]
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