The JC Penney rebranding strategy of "Fair and Square Pricing"

by | Jun 17, 2012 | Brand Relevancy, Differentiating Your Brand, The Next Wave in Business

JCPenney LogoThere is a difference between selling Apple products and clothes. Ron Johnson, formerly Apple’s retail chief and the new CEO of JC Penney is finding that out quickly. Critics of his move from constant sales to an always fair pricing strategy are having a field day with a Forbes article calling it an “Epic Rebranding Fail”

But nevertheless they launched “Fair and Square Pricing” whereby promotions and sales would be a thing of the past, for the most part, and in their stead would be everyday prices, “best prices” which would be available to consumers on the first and third Friday of each month, plus they would mix in some month-long values, too.

The new tagline ”Enough. Is. Enough.” would speak to the belief that consumers were inundated with promos, coupons and sales and what they really wanted was just plain, old-fashioned, everyday low prices.

No sizzle, just the steak.

via JC Penney’s Epic Rebranding Fail - Forbes.

It’s easy to armchair quarterback these bold moves, many (including this author) thought when Apple decided to open bricks and mortar stores it was a move in the wrong direction. Gateway had failed miserably doing the same thing- and yet, Apple is now considered the most profitable retailer on the planet.

However, there is a big difference between JC Penney and Apple- JC Penney is more of a curator of retail while Apple is the owner of the product. Yes, I can get Apple products elsewhere, but at an Apple store I’m dealing direct. At JC Penney, I can get the products elsewhere and anywhere- there is no exclusivity to what JC Penney sells- or what the brand stands for.

JC Penney Doesn’t Pass the Hand test

The Hand Test- From "The Brand Gap" by Marty Neumeier

Put your hand over the logo and you still know what company made the product and the ad.

In Marty Neumeir’s classic book, “The Brand Gap” he uses Apple as the example when introducing “The Hand Test.” If you cover up the logo of the product in the ad- will you know what the product is? Apple passes with flying colors. JC Penney can’t ever do this. Their products, the brands they sell, their brand itself isn’t able to stand on it’s own. By their very nature, the department store model is nothing other than the supermarket of shopping in comparison to the convenience store. Same products, different experience in selection and purchase. There is nothing exclusive to JC Penney products and once you buy them, they belong to you- not to JC Penney. Compare that to Apple. Once you have an iPhone or a MacBook Air- the brand cachet is still there and there is a connection between you and the brand.

Pricing isn’t a strategy- it’s a tactic

This seems to be the part that Mr. Johnson missed in Marketing 301. Price alone isn’t why people buy- it’s perceived value that is critical. What does JC Penney add in value to the products they sell? Well, nothing really. Do we have any reason to trust JC Penney as a qualified curator of value? Nope. They’ve been through three rebrandings in as many years- and even before that, it’s been a long time since JC Penney held any kind of unique position in the eye of the consumer- if ever. For most consumers the JC Penney brand could go away tomorrow and they wouldn’t miss it. We’ve seen it before as Macy’s has gobbled up other regional department stores, rebranded them and customers barely skipped a beat. The brand name of most department stores stands for nothing- possible exceptions being Neiman Marcus which once stood for exclusivity and expensive, Nordstrom which built a reputation on amazing customer service and Sears which had brands like Craftsman, Kenmore and Die Hard that stood for solid American values.

JC Penney is a brand without a position. And since brands aren’t controlled by the marketer, but by the consumer, the way they introduced their new positioning of the brand has been way off target. Pointing out that consumers are tired of being assaulted with ads promising values based on inflated initial pricing is true. Focusing on the competition isn’t usually the best way to spend your advertising dollar. Yes, consumers know that MSRP is a joke, and from diamonds to donuts, everyone wants to pay less- but, are always willing to pay a little more for perceived value. Where is the value proposition for JC Penney?

The Value of “Fair and Square Pricing”

We believe in fair honest prices. When gasoline is sold for dollars per gallon, it’s insane that we still see $3.59.99 prices, especially when the penny, the 1cent piece, is on the verge of being done away with.  The old psychology of .95 or .99 cent pricing to erase perceptions of whole dollar prices being more may still work with the geriatric set, but younger consumers are less likely to be swayed by it. The value of JC Penney not manipulating prices up and down is great- but, when buying fashion, the brand needs to stand for something. We’ve seen denim jeans elevated from durable work clothes to designer label with outrageous price tags- yet, say the word JC Penney and what emotional trigger do they hit?

Our friend Sally Hogshead lists seven triggers in her book Fascinate: Passion. Mystique. Alarm. Prestige. Power. Rebellion. Trust (well, actually, she changed Lust to Passion and Vice to Rebellion just to be absolutely correct). You can find out more about the seven triggers here: The Fascinate System If JC Penney is going to rebrand and be relevant to the consumer, they need to at least score highly on one or two of the triggers. right now, they don’t. Is “Rebellion” against sales and manipulation enough? Hardly, Walmart and Target have been promising some sort of everyday low prices for years.

The “Enough. is. Enough.” line is more about the mendacity of marketing than about the value to the consumer. The TV spot introducing the new pricing is enough to instantly annoy a viewer who already views TV commercials an intrusion to their entertainment.

It will take JC Penney more than a few quarters to transform themselves into a value retailer, which many consumers may find attractive as they grow to understand it. Think about how most department stores are deployed- in a mall with several other competitors. Shoppers go to the mall to find fashion, after looking in Macy’s, Sears, and the other two anchor stores, as well as places like The Gap, Hollister, Abercrombie & Fitch, Aeropostal etc Penney’s may win over converts if they can get consumers to come through their doors to compare. Changing the experience of shopping can take time and while the pundits are quick to write this concept off, once JC Penney finds its new voice and can trip one or two more emotional triggers, they may find the success they are seeking.

Knowing what your brand stands for in the consumers head is the first step to making the sale. Since the consumer controls your brand, changing those perceptions isn’t an overnight or several quarter effort. We believe that Mr. Johnson has the right tactic but needs to find the strategy to convince customers that the value of “Fair and Square Pricing” is more than just saving a few bucks- it’s a statement above fashion about fashion.

Yes, consumers are tired of being lied to, but, they still want the mirage of an oasis beyond the doors to your store.

When wearing clothes from JCPenney becomes a fashion statement (I have the common sense not to be gullible), JC Penney will win.

 

David Ogilvy: “I am a lousy copywriter” and how do you pick a good one?

by | Mar 17, 2012 | Careers in Advertising, Creativity, How To Select An Ad Agency

As I sit at home, writing this post (too many interruptions at the office) I realize that when clients are choosing an ad agency, many have no clue on what they are really choosing. In most cases, the overworked and under-recognized copywriters aren’t given a whole lot of thought. One of the first questions for the creative director/CEO/President/Chief Creative officer is to find out where they started in the agency business? The answers should tell you a lot about the agency- if it’s a former copywriter or art director the agency focus will probably be on great creative, if it’s an account planner- strategy may be their lead strength, if it’s a finance person- run, and if it’s a account executive/bag man/sales professional- I’m sure the presentation will be charming.

When it comes to the giants of advertising- and the guy you would want running your ad agency, David Ogilvy belongs on the  top of the list. Even though the book is dated, I required all employees to read “Ogilvy on Advertising” for the first 20 years of The Next Wave. I still recommend it- but instead want them to read the excellent “Hey Whipple, Squeze this” by my friend Luke Sullivan first. Ogilvy was a brilliant writer and a consummate ad guy. He understood that you had to eat, sleep and breathe your product in order to do it justice. One of the requirements for working at Crispin Porter + Bogusky according to their employee handbook is that you are an ad person. Ad people are tuned into everything about the business- what accounts are where- and who is doing great work. If you aren’t an ad person you have a job- if you are one- you have a career.

When I stumbled upon this letter from David Ogilvy I knew things hadn’t changed much in the world of advertising. Great ads comes from people who immerse themselves in the work. It may be your most important indicator of what kind of agency you are about to hire:

Source: The Unpublished David Ogilvy: A Selection of His Writings from the Files of His Partners;

April 19, 1955

Dear Mr. Calt:

On March 22nd you wrote to me asking for some notes on my work habits as a copywriter. They are appalling, as you are about to see:

  1. I have never written an advertisement in the office. Too many interruptions. I do all my writing at home.
  2. I spend a long time studying the precedents. I look at every advertisement which has appeared for competing products during the past 20 years.
  3. I am helpless without research material—and the more “motivational” the better.
  4. I write out a definition of the problem and a statement of the purpose which I wish the campaign to achieve. Then I go no further until the statement and its principles have been accepted by the client.
  5. Before actually writing the copy, I write down ever conceivable fact and selling idea. Then I get them organized and relate them to research and the copy platform.
  6. Then I write the headline. As a matter of fact I try to write 20 alternative headlines for every advertisement. And I never select the final headline without asking the opinion of other people in the agency. In some cases I seek the help of the research department and get them to do a split-run on a battery of headlines.
  7. At this point I can no longer postpone the actual copy. So I go home and sit down at my desk. I find myself entirely without ideas. I get bad-tempered. If my wife comes into the room I growl at her. This has gotten worse since I gave up smoking.
  8. I am terrified of producing a lousy advertisement. This causes me to throw away the first 20 attempts.
  9. If all else fails, I drink half a bottle of rum and play a Handel oratorio on the gramophone. This generally produces an uncontrollable gush of copy.
  10. The next morning I get up early and edit the gush.
  11. Then I take the train to New York and my secretary types a draft. I cannot type, which is very inconvenient.
  12. I am a lousy copywriter, but I am a good editor. So I go to work editing my own draft. After four or five editings, it looks good enough to show to the client. If the client changes the copy, I get angry—because I took a lot of trouble writing it, and what I wrote I wrote on purpose.

Altogether it is a slow and laborious business. I understand that some copywriters have much greater facility.

Yours sincerely, D.O.

via Letters of Note: I am a lousy copywriter.

The humility of Ogilvy’s letter is quaint. I’ve met other great copywriters and they’ve run the gamut in personality traits, but generally everyone of them is fascinating and perfectly capable of doing many different things. However, I’d beware of those who are really frustrated authors- because if you are writing ads to pay the freight while working on the “great American novel” you probably aren’t really an ad person.

If you are an aspiring copywriter, see number 6 and realize 20 is a low number these days. Another great copywriter who I’ve had the pleasure of working with, Sally Hogshead once wrote 800 headlines for her client, BMW Motorcycles. So get writing.

The other key is to write daily. The day you run out of ideas is the day you die if you are a real copywriter. Blogs make it much easier than it was in David Ogilvy’s day to test your writing chops and get feedback. Real copywriters can’t stop writing- which may explain why I’m sitting at home, writing this post on a Saturday afternoon.

Lessons for students of advertising

by | Jun 26, 2008 | Careers in Advertising, The Craft Of Advertising

It’s summer, which means we get assaulted with e-mails from students who want to intern at The Next Wave. Generally, they start out telling us how great our work is, and then tell us all about their skill set. Usually, their cover letter, and or resume are both too long. I’ve seen students pad out “experience” to be longer than what I’ve seen from 20 year veterans with international awards under their belts.

The funny thing is, we get very few candidates who actually attempt to market themselves the way they would sell any product or service for a client. You want to be in advertising? What would an ad for you look like?

There are a couple of things in reviewing portfolios online or in person that always bug me:

If the work isn’t able to explain itself, other than what media it was in, where or when it ran- or the budget, you shouldn’t be showing it. In a PDF portfolio- only include the briefest description (ala Luezers Archive)

The second is that just because your professor gave it an “A”- or the client ran it, doesn’t necessarily mean it’s done, finished, the idea is over. If you’re looking for work, you should be constantly improving your work, updating it, fixing the things that you weren’t quite satisfied with.

Ira Glass talks about this in this great little video about good taste and perfecting the craft- watch the whole thing (thanks Angela for posting about this gem)

2017- the video has been removed: https://youtu.be/loxJ3FtCJJA

This may be it:

This ties back to Sally Hogshead’s famous post on doing 800 headlines for BMW Motorcycles to get the right one. Or Chiat/Day’s mantra- “Good Enough, isn’t Good Enough.”

There are no excuses for a portfolio- if it’s got flaws, or your resume has holes, it’s up to you to fix or fill them. If you want to be in this business, there is no excuse good enough for a client who just blew a hundred million on your experiment.

So, before you think you’ve got it all covered after a few years in school, just take another listen to Ira playing back his work after 8 years in the field, and realize, you’ve still got a long way to go before you’ll you before you should start your cover letter praising our work. We keep our awards in the bathroom, our heads still fit through standard doors- and we’re working as hard as we can to get better too.

We want you to show us how you can be a part of improving our work- and just tell us the basics. We know good work when we see it (and we’re even happier when it’s ours!).

Best of luck.