Marketing Plan

Presenter: Jacquez Polk, Alejandra Lara, Cherie Barranco-Miller, and Erin Woodruff

JACE Marketing, Inc.

701 S. Nedderman Drive, Arlington, TX, 76019 P:817-272-2011 www.jacemktg.com

Table of Contents

1.0 Executive Summary ……………………………………………………………………..2

2.0 Situation Analysis ……………………………………………………………………..3

2.1 Market Description ……………………………………………………………………..3

2.2 Product Review ……………………………………………………………………..3

2.3 Competitive Review ……………………………………………………………………..3

2.4 Distribution Review ……………………………………………………………………..4

3.0 SWOT Analysis ……………………………………………………………………..4

3.1 Competition ……………………………………………………………………..7

3.2 Product Offering ……………………………………………………………………..8

3.3 Distribution ……………………………………………………………………..9

3.4 Objectives ……………………………………………………………………..9

4.0 Marketing Strategy ……………………………………………………………………..9

4.1 Marketing Research …………………………………………………………………….11

4.2 Marketing Organizations ……………………………………………………………………12

5.0 Action Program Metrics ……………………………………………………………………12

5.1 Sales Revenue Forecast ……………………………………………………………………13

5.2 Break-even Analysis ……………………………………………………………………14

5.3 Additional Controls …………………………………………………………………….14

6.0 Reference Page ……………………………………………………………………16

1.0 Executive Summary

We at JACE Marketing Inc. have been hired by JCPenney to create an effective marketing plan to increase customer loyalty and strengthen their weaknesses. The lack of online retailing and digital marketing has put JCPenney in danger of losing consumers during this epidemic, since most shopping is now done remotely. JCPenney has a broad range of products from home goods, jewelry, fashion, etc. and it is our job to create financial growth and exceed sales projections compared to our competitors.

2.0 Situation Analysis

JCPenney is a retail company that has been around for 119 years. During that time, it has gained nationwide customer loyalty because of its ability to provide basic needs. Although it has had over a century of success, it still has weaknesses like any other company, such as its presence in e-commerce. It has had a tough time promoting its brand on digital platforms, so it faces threats from companies like Kohl’s and Walmart that have a strong presence in online retailing. However, due to covid many consumers have been forced to shop online for their products, so this is an opportunity for JCPenney to meet the demands of its customers by strengthening its weakest attribute.

2.1 Market Description

JCPenney has targeted mostly lower- and middle-class families as its customers and set up mid-range department outlets. The company believes in everyday value and has implemented its pricing strategy on this. Most customers are women who are ages 55 years and older, less fashionable, and price conscious.

2.2 Product Review

JCPenney is a well-known retail outlet in America that sells conventional products in its stores. It has nearly one hundred individual boutiques that offers products for men, women, and children regardless of their age-group. It ranges from furniture, home decor, dining appliances, bed and bath products, footwear, jewelry, beauty products, and much more.

2.3 Competitive Review

JCPenney has many competitors, however what separates them from rival companies are their low everyday prices. JCPenney’s pricing strategy is referred to as “fair and square pricing.” JCPenney has tried to cut back the number of sales, and instead offered customers a flat rate that was considered best price for the product. This relied on the customer’s trust with the JCPenney brand since they were being given a fair price for their merchandise.

2.4 Distribution Review

JCPenney is an American company with its operations spread nationwide in 49 states and in Puerto Rico. Keeping with changing times, the brand started developing and relocating stores to places where consumer traffic was high; so, it is mostly based on shopping malls of suburban areas. Since 1998, it has also started internet retailing with a high success ratio.

3.0 SWOT Analysis

JCPenney has gained brand recognition among consumers throughout the 119 years it’s been in business, but the drawback to the company’s brand is that it’s known for providing basic needs to mid-level households. The company has made many attempts through the years trying to reinvent themselves with little to no success, drawing confusion to the brand’s identity. The major threat is as the company continues to struggle from years of failed strategies, others of the like, have slowly crept onto the scene stealing away market share.

Strengths

Strong brand recognition

James Cash Penney founded the Golden Rule store in 1902 with the simple philosophy of treating others as we would like to be treated, committing to high standards of everything they do. The company grew exponentially, and today has 650+ retail stores nationwide offering apparel, home furnishings, and services appealing to mid-level consumers who are budget conscious without sacrificing quality. This is supported by a “supply chain network of 11 facilities, which includes merchandise distribution centers, regional warehouses, jcp.com fulfillment centers and furniture distribution centers,” (jcp.com). Brand recognition isn’t enough to sustain. It needs the brand value it once had that drove people to buy there.

Private labels

JCPenney has a robust portfolio of private labels, not to mention celebrity brands. Partnerships with these brands benefit the company because it costs less to manufacture and distribute. The savings gained are then distributed to the customers at offered discounts. Private labels are already considered high quality alternatives vs the nationally known brands giving JCPenney good online price positioning as private labels continue to gain traction with consumers.

Weaknesses

Limited market share

JCPenney has been slowly hemorrhaging market share among companies with similar offerings, losing their sense of retail relevance. What’s more is even though they have ample presence across the states, they have limited global presence, which is another segment that can be captured through e-commerce.

Marketing – brand presence

JCPenney has had a weak presence in marketing strategies to effectively promote the brand and show its presence among the digital channels. When the pandemic hit, people were stuck at home and marketing missed the market and lost out on the surge of home essentials being bought on e-commerce sites where their home essentials house brand Loom + Forge should have made money.

Opportunity

Digital marketing

The COVID pandemic has changed the way consumers shop and how businesses were forced to innovate in ways to meet demands of their customers. Technology has become the lifeblood of every business operation and there’s no slowing down.

Disposable income

Income growth has shown a slight growth in developing countries around the world, especially in Asia and the U.S. With the effects of the COVID pandemic aside, the economy has steadily come back to full operations. Hence, the need for JCPenney to take advantage of the marketing strategies to appeal to the consumers with more disposable income.

Threats

Business conditions

Just when it couldn’t get any worse for JCPenney had a looming $5 billion debt and COVID was forced to file for Chapter 11 bankruptcy in May 2020. In December 2020 it was quickly bought out by Simon Property Group, Inc. and Brookfield Asset Management, Inc., for $1.75 billion and the remaining creditors had forgiven. Shareholders disillusioned, further devaluing its public perception. However, the conditions of this bankruptcy buyout could benefit JCPenney because The Authentic Brands Group who owns retail brands like Forever 21, Lucky Brand, Nine West, Brooks Brother, and Barneys will be contributing these brands to the JCPenney lineup.

Ecommerce

JCPenney was once an e-commerce leader as one of the first department stores to have an online catalog. However, the proverbial nail in the coffin happened in 2011 when Ron Johnson focused strategy on brick-and-mortar catering to higher end customers and abandoned its e-commerce site. Abandoning its core value proposition, loyal customers deserted JCPenney for Walmart or Kohl’s of the like. Johnson was asked to leave after seventeen months, but the effects of this had a lasting consequence. Present day, reeling from bankruptcy and the economy attempting to get back to normal from the pandemic, consumers' perception of online shopping has effectively changed and are very dependent on e-commerce for everyday needs and wants. Retail has been hit especially hard, and companies are vying for the exclusivity of your dollar. JCPenney must differentiate its offerings to re-capture its lost market share.

3.1 Competition

The retail industry is one of the most demanding fragmented segments to fulfill with so many to choose from. According to consumerdecisions.org, online shopping statistics were at $2.8 trillion in 2018 worldwide. JCPenney is in direct competition with Kohl’s, Macy’s, and Walmart.

· Kohl’s is a well-known retailer with one primary differentiation, location. Most are stand-alone stores located in every large city positioned off the highway or main roads that have high traffic. They have similar product offerings to JCPenney including their own lineup of private labels. The recent partnership with Amazon accepting returns was a good strategic move to help boost foot traffic which helped by 24% when first initiated.

· Macy’s is one of the oldest department store chains founded in 1858 and is iconic for their yearly Macy’s Thanksgiving Day Parade. The brand appeals to a high-level consumer that is willing to spend a little more for high end luxury goods through their Bloomingdale’s chain or bluemercury beauty store.

· Walmart's value proposition is to offer “everyday low prices.” They have an efficient supply chain and are successful with its house brand Great Value that is perceived to be just as good if not a better product at a much lower price point.

3.2 Product Offering

Subscription boxes are not a new concept these days. It’s a continuously growing niche that has taken over the online market to differentiate among competition, essentially a new way to sell existing products. The concept is simple yet effective drawing consumers to subscribe. Not only is it convenient with today’s fast paced environment, but also akin to the anticipation of opening a present on your birthday. JCPenney’s new concept store was designed to be more customer centric, which in part includes a styling expert at all women and men’s fitting rooms. To play off this concept, JCPenney will be offering a similar subscription box. Customers will be personally styled by JCPenney StyleMe. Take a quick quiz to let JCPenney stylists know a little bit about preferences and an algorithm will help identify the customer's personal style and taste through JCPenney brands in a wide array of styles and sizes that cater to the budget they set. Order a StyleMe kit, schedule them as little or as often as preferred. The membership will have a cost of $25 dollars a month, bimonthly or quarterly, in which the fee can be applied toward the kit purchase to reward members, with free shipping and returns. The client receives a kit containing $100 to $150 worth of clothing and accessories, try everything on at home, keep what you love, then send back the rest. Customers have the option of curbside or instore pickup, and the same with returns. The JCPenney StyleMe subscription is unique in the sense that customers have the option to pick up or return their kits and get assistance from an in-house stylist by appointment. Returns can be exchanged immediately without customers having to wait for new items in the mail and at the same time get a one-on-one personalized styling experience. While about 80% of companies believe they deliver outstanding customer service, only a small margin of customers believes otherwise and JCPenney wants to change that perception.

3.3 Distribution

JCPenney StyleMe kits will be available through a select few channels.

· JCPenney department store

· Online at jcpenney.com

· Social media site like Facebook, Instagram, and Pinterest

3.4 Objectives

The marketing objectives for JCPenney is as follows:

· Increase JCPenney’s revenue by 5% in 2022. This is the first step in the overall long-term goal of expanding into global markets.

· To attract and retain customers through its core value of fair and square pricing strategy.

· To capture, retain, and enhance customer loyalty to the brand through database marketing. Offering new programs that will differentiate among competitors will focus on customer centric methods.

4.0 Marketing Strategy

Positioning

JCPenney originally positioned itself as a store offering discounts, and low prices appealing to people of all ages, especially shoppers aged 55 and over, shortly after, they tried to target ages 18 to 30 by eliminating discounts and promotions but failed to recognize that the 55-year-old market was vital in their sales (Chloe, 2014). JCPenney should focus on the original market, a store for all ages. By expanding their clothing line to a wider age target market, it would gain a stronger hold on market share in the retail industry.

JCPenney has focused on the concept of "high quality, low price" and their strategy has been to introduce their products at a high price and then discount them at a low price to give the customer the appearance that they are getting a bargain. In order for JCPenney to attract all target markets, JCPenney should have unique strategies for each market, for example, maintaining coupons and discount strategies for the target market aged 40 and above, while the market aged 18 to 30-year-olds should use a low-price, fixed-price approach. In this way they could reach a wide variety of clients without compromising JCPenney's mission.

Product Strategy

JCPenney stores will be all about making the customer experience easier and more enjoyable upon entering. Paying will be easier by putting the cashiers in an area visible to the customer. New boutique style areas will be introduced as will new brands in a wider variety of sizes.

We will also be introducing a monthly membership, our new online membership will be able to offer a variety of styles tailored to the customer's needs. Thanks to an innovative algorithm that will help us identify the customer's needs and taste. With this new membership the client will be able to try the clothes and only buy the garment that they liked the most, returning the rest.

Membership payments will be automated with options to pause enrollment, move, or cancel membership. This will help retain customers who are not ready to buy.

Pricing Strategy

In-store discount purchases will be tailored mainly to elderly people while low fix-rated prices will be targeted to the young target market.

The online membership will have a cost of $25 dollars a month, bimonthly or quarterly. The client can receive a box containing $100 to $150 worth of brand clothing and only pay for what they keep. This method will be tailored mainly to the young internet users that are looking for a quick fashionable and trendy look or the busy customer that can’t go to the physical store.

Distribution Strategy

JCPenney will continue to have physical stores in select areas. However, JCPenney will increase its online presence to drive traffic to its website and its new membership program.

Communications Strategy

The JCPenney brand has many benefits as it is recognized worldwide and will have no difficulty communicating its strategy. In the past, JCPenney has failed to use social media to communicate to the public. The new communication strategy will be to use social media networks such as Tik Tok, Instagram, and commercials on YouTube to attract the attention of the young crowd. For example, reaching out to young influencers to promote membership on their social media or in the form of a 15-30 second commercial. This will help expose JCPenney's new membership strategy.

Also creating advertisements for local newspapers would help retain the older customer base since they tend to read newspapers and use coupons when they visit the store.

4.1 Marketing Research

In the past, our biggest consumers have been people over 55 with incomes of less than $ 35,000 a year (Chloe, 2014). We have decided to segment the market into three levels, the first level with ages 1 to 18 years old, since this segment is a great influence on the purchase decision in the household. The second tier is ages 19 to 30 year old as this market tends to be more price conscious with incomes under $ 30,000. This market is ideal for offering low, fixed prices. The third level are ages 31 year old and up who are more susceptible to in-store discount strategies and promotions, this level has an income of $ 35,000 and below.

4.2 Marketing Organization

We recommend following psychographic segmentation as part of our marketing organization strategy. This type of segmentation will help us to evaluate the consumer from a socio-economic point of view in order to provide branded clothing at a competitive and affordable price. By including this type of strategy, it will allow us to understand how consumers view our products, know what they really want and need, and how to communicate with the target audience. Also, it will allow us to conduct surveys such as open-ended questions, likert scale questions or semantic differential scale questions to better understand the consumer wants and needs.

5.0 Action Program

The first step in forming an action program is starting to know and understand our customers while building a customer profile. These things include getting to know our customers’ preferences and characteristics as well as understanding their interests and specific style. By building this customer profile, it allows JCPenney to know who their consumers are and allows JCPenney to make the JCP StyleMe subscription as personal as possible. This will allow us to know our competitors and understand our target market in the retail and subscription industry while being able to identify and evaluate the competition. Our action that we are going to focus on is both a digital action plan and a customer success plan. By incorporating both, it will not only let us focus on our customers, but it will also let us focus on revamping our brand digitally through a new form of customer service. JCPenney will then conduct targeted prospect research by using focus groups and online surveys to identify customer product and customer satisfaction as well as the dissatisfaction. This will help us understand which products are more popular than others.

JCPenney will use a more integrated marketing approach to announce our new personal subscription box, JCP StyleMe. Using this personal approach will be very effective because it will allow us to engage with our customers on a personal level. Before the launch, JCPenney will distribute the release of JCP StyleMe by incorporating stores, emails, commercials, social media and all other digital platforms to advertise. The company will also offer endorsements to influencers to be our spokesperson to gain insight and to help raise product awareness for the new release. We will then propose to all existing customers that already have and use JCPenney rewards as an incentive. When offering an incentive to JCPenney reward members, for example, offering a first-month free trial, free shipping and bonus items, it will definitely attract the right customers. This action program will ensure high sales and growth for the future of this company.

5.1 Sales Revenue Forecast

Over the next five years, the analysts that follow JCPenney predict earnings to grow at an average annual rate of 5%.

	2021	2022	2023	2024	2025	2026
Sales Growth		5%	5%	5%	5%	5%
Revenue	11.69 B	12.27 B	12.89 B	13. 53 B	14.21 B	14.92 B

JCPenney has forecasted to spend a total of 200 million in marketing expenses and promotion costs annually, and the action program strategy is projected to spend 162 million, therefore, JCPenney is projected to spend 1.1 billion in variable costs within the next five years.

5.2 Break-even Analysis

JCPenney would need to sell 15,083,333 units in order to cover fixed costs. If the anticipated 50,800,000 units are sold, then your profit/loss would be $857,200,000.

Total fixed costs= $362,000,000

Sales price per unit= $25

Anticipated unit sales= 5,080,000

Variable cost per unit= $1.00

5.3 Additional Controls

After the launch of this product, we will review our results over the next year to see if and what changes need to be made to the marketing plan. We will then look at the product sales, making sure we are on the right track of our annual growth rate. If we are not on the right track, this will determine when and if changes need to be made to the marketing plan.

Constantly monitoring customer feedback through polls and surveys will allow us to know when and if something needs to be adjusted to the plan according to the results of the research.

6.0 Reference

C. (2014, August 15). JCPenney’s Positioning Strategy. Chloé’s Portfolio. https://chloebhalley.wordpress.com/2014/02/17/jcpenneys-positioning-strategy/

Sestak, K. (2021, July 5). Lessons from the Failure of J.C. Penney’s New Pricing Strategy. Profitwell. https://www.priceintelligently.com/blog/bid/152018/lessons-from-the-failure-of-j-c-penney-s-new-pricing-strategy

JACE Marketing, Inc. 701 S. Nedderman Drive, Arlington, TX, 76019 P:817-272-2011 www.jacemktg.com

JACE Marketing, Inc. 701 S. Nedderman Drive, Arlington, TX, 76019 P:817-272-2011 www.jacemktg.com 1

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Marketing Plan

Acacia Brown, Ryan Lambe, Lucas Lambird, Consuelo Nava LARC Marketing, Inc.

701 S. Nedderman Dr. Arlington, Texas 76019 T 817. 654. 7890

Table of Contents

LARC Marketing, Inc. 701 S. Nedderman Dr. Arlington, Texas 76019 T 817. 654. 7890

LARC Marketing, Inc. 701 S. Nedderman Dr. Arlington, Texas 76019 T 817. 654. 7890 1

1.0 Executive Summary

3

2.0 Current Marketing Situation 4

2.2 Market Description 4

2.3 Product Review 5

2.4 Competitive Review 6

2.5 Distribution Review 6

2.6 SWOT Analysis 7

3.0 Objectives and Issues 8

3.1 Marketing Strategy 9

3.2 Action Programs Metrics 11

3.3 Pro Forma Budgets/Financials 13

3.4 Additional Controls 13

McKesson

1.0 Executive Summary

McKesson has done an excellent job at establishing themselves as a successful distributor of pharmaceutical, medical device technology, as well as health services. Focused on the blood glucose market, the company provides their customers with broad product line offerings available for purchase. However, as technology progresses and consumers step further into the preference of technology ease, McKesson needs to make some adjustments in order to keep up with the changing market desires. In order to gain more of a market share in the pharmaceutical and medical technology industry, the company needs to shift their focus from primarily offering self -monitoring glucose monitors to continuous glucose monitors, with paired technology of their mobile app available on Apple and Android smartphones. With foot traffic and pharmacy sales as high as they are in store, we recommend McKesson partners with CVS as well as boosting their own sales within the Health Mart Pharmacies, by creating incentives to customers buying their products online or in store.

2.0 Current Marketing Situation

Founded in 1833, McKesson has grown from a small pharmaceutical wholesale and distribution business into a global name, with bearings in pharmaceuticals, medical devices, and health care services. McKesson currently has a smartphone app compatible with Apple devices, to help aid in the process of refilling prescriptions, receiving, and paying for pharmacy services for customers through their Health Mart pharmacies.

McKesson has a diverse lineup of blood glucose supplies as well as a selection of their own glucose meters, in addition to plenty of other company monitors and tools McKesson sells and distributes.

In order to compete with competitors and utilize the technology McKesson has available to the fullest capacity, McKesson should partner with CVS pharmacies and offer an incentive program for customers who pair their glucose monitors bought online through McKesson or in store at one of their Health Mart or CVS pharmacies, with the Smartphone App. Through the app, customers will be able to make refill orders, initiate payments, track their blood sugar levels, get daily trend updates to their o

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