JC Penney, Retail Management Project

jcpenneyREFRESH Consulting GroupAriel RiosChristina TranEvelyn ShaoJessica HendrawidjajaStephanie Whitman

To fully capture the young men’s apparel market share in the United

States

GOAL

JCP Challenge Analysis Product Line Strategies Financials

JCPENNEY

Challenge Analysis Product Line Strategies Financials

Young Target

Market

Creative Clothing

Line

Exclusive Branding

Effective Marketing

Innovative Advertising

ANALYSIS

JCPENNEY

To execute a strategic Long Range Plan that involves customers, associates, and shareholders

CORE COMPETENCY : JCPENNEY BRAND

CURRENT ISSUE

MISSION: WINNING TOGETHER Principle

• Capturing the young men target market

• Product awareness• Competitions

POTENTIALS

• Innovative advertising

• Creative product line• Exclusive branding


TARGET MARKET PROFILE

BRYAN SMITH• 33, Finance Manager at

Microsoft, WA• USD 87,750/year• Loyal subscriber of GQ

Magazines and Auto• Interest: sports, car,

business and political topics


BEHAVIOR

43% don’t look for clothes, but buy what they stumble across that suits them

72% says “Style is important, I want them to fit what I consider to be my style

41% thinks Italy has the best-dressed men


BEHAVIOR

CAR (58%)

FITNESS (60%)

GADGET (70%)


TREND ANALYSIS

Less demand for conspicuous logo

More long-lasting & everyday staple pieces


RE-INVENTED MARKET

Men of Generation Y

Classic to Modern

Work to Casual


SIGNATURE ITEM

“COMPLEMENT” SPORT COAT


PRODUCT LINE

• Color Swatch Embellishment• Material to fit lifestyle of our man• Pop of Color

• Versatile/Easily Mixed and Matched

• Vintage Buttons


RE-INVENTED

Exclusive line

Mid-price positioning

Modern, stylish, contemporary


STRATEGY

‘RE-INVENTED’ realizes that our brand is the source of a promise to our consumer

BRANDING

• Deliver message clearly• Confirm our credibility• Connect with our target prospects emotionally• Motivate the buyer• Increase User Loyalty

Main Branding Objectives


RE-INVENTED BRANDING


Gain recognition in Men’s publications: generate buzz• Facebook & QR Code Application

Expand current market by capturing a new target market • Generation Y & Men, 25-35 years old

Leverage customer experience

Increase sales

• Convert prospect to loyal clients

VISUAL MERCHANDISING

• Placement: Inside main entrance in corner

• Adjacencies: Levis and Dockers

• One Stop Shop environment

• Giant QR Code on every display• Matching ideas• Color options


SOCIAL MEDIA

Less demand for conspicuous logo


MOBILE QR CODE

JCP Challenge Analysis Product Line Strategies Financials

MAGAZINESMEDIA ADS

• Ideal audience profile- Age Group- Annual Income- Behavior/Interest


• 3 platforms of advertisement: Magazine, Website, Mobile

FINANCIALS

PRICING


• Signature Sport Coat: $69.99• Jacket: $69.99• Sweaters: $39.99

STRATEGY: MARKET PRICE

PRODUCT PRICES

• T-Shirts: $19.99• Briefcase: $59.99

“COMPLEMENT” Sport Coat

JCP Profit AnalysisTest Production


Test Production . Sales at Full Price $ 41,994.00 Sales at Discount Price $ 13,438.08 Total Gross Sales 55,432.08 COGS 25,840.60 Gross Margin $ 29,591.48

JCP Profit AnalysisFull Production


Full ProductionSales at Full Price 3,499,500.00$ Sales at Discount Price 1,119,840.00 Total Gross Sales 4,619,340.00 COGS 2,153,383.04 Gross Margin 2,465,956.96$

SPI Profit AnalysisTest and Full Production


“Complement” Sport Coat.Test Production $ 8,518.88

Full Production $ 709,906.50

ALTERNATIVE SCENARIOS


Best Case

Best CaseSales at Full Price 4,899,300.00$ Sales at Discount Price 559,920.00 Total Gross Sales 5,459,220.00 COGS 2,461,009.18 Contribution 2,998,210.82$


Worst Case

Worst CaseSales at Full Price 2,099,700.00$ Sales at Discount Price 1,679,760.00 Total Gross Sales 3,779,460.00 COGS 1,845,756.89 Contribution 1,933,703.11$


Break-Even Analysis

Full Production .Break Even Units 43,953 Break Even Point 3,076,261.48$

CONCLUSIONS

JCPENNEYYoung Target

Market

Creative Clothing

Line

Exclusive Branding

Effective Marketing

Innovative Advertising

thankyou questions?

APPENDIXPresentationsGoalJCPenney ChallengeAnalysisJCPenney AnalysisTarget Market ProfileTarget Market BehaviorTarget Market Behavior(cont.)Trend AnalysisRE-INVENTEDMARKETSignature ItemProduct LineRE-INVENTEDStrategiesBrandingRE-INVENTED BRANDINGVisual MerchandisingSocial MediaQR CodeMedia Ads

FinancialsPricingFinancial - Sport CoatAlternative Scenarios

Appendix

AnalysisMarket SegmentationMarket Segmentation ProfileMarket Segmentation Geographic

FinancialsEntire LineAlternative Scenarios - Full Line

MARKET SEGMENTATIONRetail Industry

MARKET SEGMENTATIONRetail Industry

Consumer aged under 25 This market segment holds 20% of the overall market share which is valued as $38.34 billion.

Customer Profile Teenagers or young adults Income Limited disposable income Shopping Behavior More likely to shop in smaller niche stores that offer the latest fashion

products Consumers aged 25 to 40

This market segment holds 35% of the overall market share which is valued as $67.095 billion. Customer Profile Employed individuals, sometimes with children Income Steady income Shopping Behavior Has the ability to shop for a range of goods under one store

Those with children are also able to purchase goods at competitive price The quality of the good is more important to consumers as opposed to its

label Consumers aged 41 to 65

This market segment holds 30% of the overall market share which is valued as $57.51 billion. Customer Profile Key buyers of department store merchandise Income Higher disposable income Shopping Behavior Buy for their grandchildren as they have generally accumulated sufficient

goods for themselves Tends to purchase higher-tier merchandise for themselves and their

family Consumers aged over 65

This market segment holds 15% of the overall market share which is valued as $28.76 billion. Customer Profile Retiree Income Reduced disposable income stream Shopping Behavior Reduced demand for goods sold by the industry

MARKET SEGMENTATION GEOGRAPHICS

RE-INVENTEDLINE DETAILS

ENTIRE LINE

JCP Profit AnalysisTest Production


Test Production .Sales at Full Price 170,961.50$ Sales at Discount Price 54,707.68 Total Gross Sales 225,669.18 COGS 97,184.60 Gross Margin 128,484.58$

JCP Profit AnalysisFull Production


Full ProductionSales at Full Price 14,496,750.00$ Sales at Discount Price 4,638,960.00 Total Gross Sales 19,135,710.00 COGS 8,250,383.04 Gross Margin 10,885,326.96$

SPI Profit AnalysisTest and Full Production


Entire Line. .Test Production $ 32,038.88

Full Production $ 2,719,906.50

ALTERNATIVE SCENARIOS

FULL LINE


Best Case

Entire LineBest Case Sales at Full Price $ 20,295,450.00 Sales at Discount Price 2,319,480.00 Total Gross Sales 22,614,930.00 COGS 9,429,009.18 Contribution $ 13,185,920.82


Worst Case

Worst CaseSales at Full Price 8,698,050.00$ Sales at Discount Price 6,958,440.00 Total Gross Sales 15,656,490.00 COGS 7,071,756.89 Contribution 8,584,733.11$


Break-Even Analysis

Style # Item Units Bought Cost Total Cost Break Even Units # of stores Avg Units

per Store

RO5-SCC Sport Coat 100,000 $ 30.76 $ 3,076,261.48 43,953 1,108 90

RO5-JKK Outerwear Jacket 100,000 26.00 2,600,000.00 37,148 1,108 90

RO5-SSI Sweater 100,000 15.60 1,560,000.00 39,010 1,108 90

RO5-CGS Cardigan 100,000 19.50 1,950,000.00 48,762 1,108 90

RO5-TSS T-Shirt 1 100,000 6.50

650,000.00 32,516 1,108 90

RO5-TSG T-Shirt 2 100,000 6.50

650,000.00 32,516 1,108 90

RO5-BCA Briefcase 50,000 26.00 1,300,000.00 21,670 1,108 45

JC Penney, Retail Management Project

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