By naming the pricing strategy “Fair and square”, JC Penney is assuming that customers believe that current prices are “unfair” and that JC Penney is coming to the rescue to give “fair” prices. There is no evidence to support that, in fact, customers are experts at navigating prices and discounts. It’s hard to believe customers perceive prices at department stores unfair, if 72% of what they buy has a deep discount.
One of the big assumptions, stated by the CEO himself, is they knew that “customers would love the new strategy”. That is a big assumption because he had no evidence, it was just what a small group of people (most of them had just joined JC Penney) that believed in the idea and where sure customer will love it. I don’t disagree with the fact that customer would love it, the question is, would JC Penney’s customers love the strategy. They had no evidence, because Johnson refused to do any type of testing on customer he knew nothing about and based on untested assumptions.
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In reality, customers are not rational and they are guided by emotions, they want to feel that they are saving money, even if in reality they’re paying more money. This is the only way to explain why customers buy a product that has a discount tag, even if the price is not actually discounted. This is a basic fact about customers that JC Penney ignored, your advertisement and communication can’t try to appeal to “logic”; it has to appeal to emotions