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J.C. Penney makeover includes new pricing plan


The following was broadcast on KDAF, CW33, on Feb. 4, 2012. Marketing Professor Dan Howard provided expertise for this story.


February 9, 2012

By Charles Bassett

Plano, Texas — By now you've seen the J.C. Penney commercial with consumers screaming over sales ads and coupons.

Penney’s is doing away with the mailers and coupons. They're now offering in-store bargains year round.

Terry Van Vliet is sold on the idea.

"I am a working mother, wife, the whole nine yards, daughter to take care of. I can't shop on the weekends and if you buy on Mondays you're getting ripped off. Now I don't have to wait until the weekends,” she said.

The deals will come on three levels.

Red tag items indicate the everyday price. Items marked blue tags will be the best price for as long as the item is in stock.

And then there are month long values.

But shopper Lenora Wallace is skeptical.

"I think it will take getting some used to because you really don't know if you're getting a bargain. If you can't see the price reduction on there you really don't know if it's a bargain or not unless you see it somewhere else," Wallace said.

Management says the prices you see already include the discount.

"Generally it's 40 to 60 percent off what it used to be before because that's where we found most customers decided to make a purchase," said J.C. Penney Store Manager Chris Macfee.

Penneys struggled last year posting $143 million in losses in November.

Now in comes former Apple and Target executive Ron Johnson to lead the company.

The makeover is expected to save the company $900 million over the next two years.

SMU marketing expert Daniel Howard says the company has struggled to find its footing when competing with other stores like Macy's or Dillards.

But this new approach my very well work.

"So what J.C. Penney wants is a perception of higher quality merchandise and fair everyday pricing. It puts them in the unique competitive position. They've simplified things and I think it's going to be a winner," Howard said.