1. I think the customer value-based pricing best describes JCPenney’s “Fair and Square”
pricing strategy comparing to cost-based pricing and competition-based pricing. Within the
pricing strategy, JCPenney applied the good-value pricing, it offered just the right
combination of quality and good service at a fair price. JCPenney increased the number of
brands products in the stores, I think it could increase the image of JCPenney that
JCPenney provides better quality products for customers. At the saJCPenney also got rid of
deep discounts and coupons, and decreased the prices of products by 40% to offer a fair
price everyday and close to the value the customers received.me time, JCPenney created a
center called “Town Square” to provide featuring services to increase customers’ shopping
experiences in JCPenney. Also JCPenney did not charge the lowest price as the biggest
discounts it once offered, so I think the “Town Square” service is a kind of value-added
pricing strategy. “Town Square” was the value-added features and services to differentiate
JCPenney’s offers and charging higher prices.
2. The advantage of JCPenney’s former traditional approach is the customers could expect
to receive the coupons and the lowest prices for some specific products every time they
came into the store. I think it is a kind of approach to attract customers to come into the
stores, the customers always wait for the discounted day to go to JCPenney. The
disadvantage of the former approach is the JCPenney could not build the customer loyalty
to the company, the customers came into the stores because of the lowest prices. If the
other company can offer the lower price than JCPenney, the customers would switch to the
other company instead of staying in the JCPenney. Then another disadvantage of the
former approach is most of the customers went into JCPenney only buy the discounted
products and very few people would like to buy the products with full price.
The advantage of “Fair and Square” pricing strategy is the store provide low price
everyday for every product, the customer do not need to wait for the specific discounted
day. They can just come into the store when they want something with low price. Also it
provides the “Town Square” featuring services to increase the customers’ shopping
experiences. The disadvantage of the new pricing strategy is there is no price comparison
on the price tag, so that the customers cannot directly know they have the lower price from
the tag. Also the previous customers who expected to have coupons and discounted
