Reference no: EM133476496

It is common knowledge among consumers and retailers alike that apparel prices tend to be marked up artificially. Years of coupons and promotions have trained customers to wait for price reductions, only shopping at department stores when special sales are available. During the Great Recession, consumer confidence dropped and spending slowed dramatically. As the economy has improved, department stores such as Macy's and JCPenney have begun looking for ways to increase customer spending. Many department stores have once again turned to steep sales and special coupons, further encouraging the cycle of regular (lukewarm) business and sale-time frenzy.
Taking a different route, JCPenney moved to reduce the artificial markup so common to department store apparel. Borrowing Walmart's long-time "everyday low prices" strategy, JCPenney hoped to spur demand and reduce off-sale shopper apathy with basic contemporary apparel, promotions such as "Best Price Fridays," and special month-long values. Customers accustomed to receiving a coupon before shopping did not respond well to the new retail strategy, however, and JCPenney incurred substantial losses. The company launched an informative marketing campaign extolling the great values available without needing coupons or special sales, but the public remained unmoved. In April 2013, JCPenney ousted the man behind the change, Ron Johnson, as CEO and promised a return to coupon-based sales.
Dana Mattioli, "Penney to Tweak Message, but Not Its Strategy," Wall Street Journal, June 19, 2012,

Question 1. First, name the six retailing mix elements and state whether the organization dealt with placement errors.
Question 2. What did JCPenny fail to utilize in order to strengthen the company's presence in retail?
Question 3. What type of store is JCPenny? Explain your answer.
Question 4. How could JCPenny have used shopper marketing to avoid alienating its customers and losing sales?

Background

Jesse Parker sells for Mid-East Metals. He has been calling on Richmond Distributors for close to two years. Over the course of 15 calls, he has sold nothing to date. During an early call, Parker had Richmond's engineers in to look over and test the quality of his products. The tests and the engineer's responses were positive. He thinks that he is extremely close to getting an order. Parker knows that Richmond is happy with its present supplier, but he is aware that they have received some late deliveries. Terry Kitchel, Richmond's senior buyer, has given every indication that he likes Parker's products and Parker.During Parker's most recent call, Kitchel told him that he'd need a couple of weeks to go over Parker's proposal. Kitchelreally didn't have any major objections during the presentation. Parker knows his price, quality, and service are equal to or exceed Richmond's present supplier.

Question 1. Kitchel told Parker that he needed a couple of weeks to think about his proposal. How should Parker handle this?

Question 2. What should Parker have done during the sales presentation when Kitchel told him that he needed to think it over?