Ron Johnson's Mistake At The JC Penney Company

When JC Penney hired Ron Johnson as CEO in November 2011, the company was looking for “a dramatic creative transformation” (Sawyer, 2013). Ron Johnson, the retail superstar, was going to do his Apple magic on JC Penney. Or not. After nearly two years on the job, JC Penney fired Johnson and took back the previous CEO, Mike Ullman. Johnson made many mistakes as the new CEO but perhaps the most important one was that he didn’t understand what JC Penney’s customers want. Also, he forced an Apple culture into the old retail chain and that didn’t go well with the employees either.
At first, the arrival of Johnson as the new CEO of JC Penney was viewed as a terrific idea by investors. Share prices went up when, in a bold move, Johnson announced his

The mistake that Johnson did was that he misread what shoppers want. This was a huge mistake because it is key in marketing to understand the marketplace and customer needs and wants in order to create value for customers and build customer relationships. “Johnson thought it made sense to cut to the chase by listing realistic prices from the get-go and foregoing nonstop sales. It does make logical sense, after all. But shoppers aren’t purely logical creatures. They’re often drawn to stores not by the promise of fair pricing, but by the lure of hunting for deals via coupons and price markdowns. It’s all a game […] but it’s a game that shoppers are accustomed to playing, and that many – consciously or not – like playing, with the “How Much You Saved” line at the bottom of the receipt serving as a score” (Tuttle, 2013). His “simple pricing policy” ended up confusing customers even more. Customers started wondering what happened to their beloved coupons and grew frustrated by their

In retrospect, Johnson and JC Penney seem like a horrible match. “What’s more, Johnson seemed to have a disdain for JC Penney’s traditional customer base. When shoppers weren’t reacting positively to the disappearance of coupons and sales, Johnson didn’t blame the new policies. Instead, he offered the arrogant assessment that customers needed to be ‘educated’ as to how the new pricing strategy worked. He also likened the coupons beloved by so many core shoppers as drugs that customers needed to be weaned off” (Tuttle, 2013). JC Penney’s longtime employees also felt judged by the new hires from Apple or “felt that they weren’t smart. Apple references were constant” (Glazer, Lublin, & Mattioli,