J. C. Penney Firm’s Every Day Low Price Strategy

Everyday Low Price (ELP) strategy brings many benefits for entrepreneurs when applied in the right setting. It functions as a free marketing mechanism that provides constant discounts, as they always attract customers by triggering their attention with favorable price tags. It is also a time-saving pricing policy as it gives customers the convenience of searching and buying the cheap products they want.

Nevertheless, many business experts still consider the ELP strategy a precarious one. This approach to pricing has significant drawbacks when not implemented correctly, and the case of J.C. Penney proves it. For example, moving away from the strategy of deep discounts makes competitors who practice sale events more attractive to customers. Moreover, the policy of constant low prices puts at risk the achievability of the enterprise’s expected or even minimal profit margins. Most likely, it was a combination of better offers from competitors and consumer suspicion of the low quality of J.C. Penney products that led to the failure.

It would be better for J.C. Penney to use a bundle pricing strategy. Their customer base loves deep discounts, and replacing them with single-price bundles would keep them loyal. In addition, switching to this approach would also help J.C. Penney attract a new target audience. J.C. Penney’s ELP strategy would work well in conjunction with the point-of-purchase marketing tactic, as these two together would have a significant persuading effect on consumers in stores. Now, the most successful similar retail corporations are Walmart and Kroger. Their financial and media success proves that the pricing strategies and methods they use work better than those of their market rivals, including J.C. Penney. An ironic thing about that is that both of them use the EDLP approach discussed above.