When does re-branding make sense?

 

Americans love our brands. We can picture the logos, the products, and the tag lines. We also don’t like change. Remember what happened a few years ago when Gap changed their logo? They quickly changed it back when customers complained loudly about the change – they liked the old logo and the brand promise they got from Gap. Will the results be different for another iconic American brand of J.C. Penney?

In the case of J.C. Penney, the change is about more than just a brand logo; it carries over into the product selection, and perhaps most importantly to cash-strapped consumers, the change carries into pricing. The company recently announced that it will significantly cut both inventory and prices – doing away with confusing sales and coupons, and simplifying the product lines. Instead of confusing sale days and discounts, the company will have three tiers of pricing: “fair and square” pricing (general everyday), “monthly value discounts”, and “best price” (clearance on the first and third Fridays of the month.

Wait – is this really simpler? Is it a significant change? I’m still confused.

 

Group Activities and Discussion Questions:

  1. Ask students if they have shopped at J. C. Penney? Why or why not?
  2. Have students view the J. C. Penney ads on their YouTube channel – http://www.youtube.com/user/jcpenney?blend=1&ob=0
  3. What is the key message from the company?
  4. Have students compare one or two items (i.e., blue jeans) at several retailers:
    • Wal-Mart, Sears, J.C. Penney, and Target
    • What are the differences in prices? Promotions?
  5. What market segment does J. C. Penney target? Are they alone in targeting this segment?
  6. How does the new pricing change the brand and perception?
  7. What are the various pricing models being used by J.C. Penney?

 

Sources: Advertising Age, Brandchannel, NY Times, Minneapolis Star Tribune

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