Economics Changing Strategies and the Essay

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The customers want to watch out the promotional offers, and a recent survey showed that in many cases it would take discounts of up to 50% to persuade customers to make a purchase (Business Insider, 2012). Therefore, rather than appreciating the more consistent everyday low prices, the JC Penney customers have seen the move as taking away their opportunity to purchase goods on promotional offers. The result has been significant, in the first quarter alone the company saw revenue drop by 20%, with the firm losing 10% of their customers (Bickle, 2012). The strategies continue to struggle, with the 2012 revenues amounting $17,260 million, compared to $17,759 million in 2011, the result of 2012 was the lowest revenue in the last five years (Morning Star, 2013). This has had an undeniable negative impact on the company stock, following an initial gain of the strategy was announced, the firm has struggled, and the share price has shown an almost continual fall with a few peaks and troughs, as seen in figure 1

Figure 1; Stock price for JC Penney

(Morning Star, 2013)

If the company had wished to introduce more consistent pricing, in maybe argued that a better strategy would have been a gradual implementation, applying the everyday fair pricing to a limited range of products in order to desensitize the customers and allowances benefit of the low pricing, moving gradually over towards a new strategy, rather than simply implementing a blanket strategy which caused a type of shock in the customer base.

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