JCPenney aims to capture market share in the young men's apparel market in the US. They plan to launch an innovative, creative clothing line targeting Generation Y men aged 25-35. The line will include signature items like a versatile sport coat as well as tees, sweaters and accessories. JCPenney will promote the line through social media, mobile apps, and magazine ads. Financial projections estimate over $10 million in annual profits at full production scale.

1. jcpenney
REFRESH Consulting Group
Ariel Rios
Christina Tran
Evelyn Shao
Jessica Hendrawidjaja
Stephanie Whitman

2. GOAL
To fully capture the young men’s
apparel market share in the United
States
JCP
Analysis Product Line Strategies Financials
Challenge

3. JCPENNEY
Young
Target
Market
Creative
Innovative
Clothing
Advertising
Line
Effective Exclusive
Marketing Branding
Challenge Analysis Product Line Strategies Financials

4. ANALYSIS

5. JCPENNEY
MISSION: WINNING TOGETHER Principle
To execute a strategic Long Range Plan that
involves customers, associates, and shareholders
CORE COMPETENCY : JCPENNEY BRAND
CURRENT ISSUE POTENTIALS
• Capturing the young men • Innovative
target market advertising
• Product awareness • Creative product line
• Competitions
• Exclusive branding
Challenge Analysis Product Line Strategies Financials

6. TARGET MARKET PROFILE
BRYAN SMITH
• 33, Finance Manager at
Microsoft, WA
• USD 87,750/year
• Loyal subscriber of GQ
Magazines and Auto
• Interest: sports, car,
business and political
topics
Challenge Analysis Product Line Strategies Financials

7. BEHAVIOR
43% don’t look for clothes, but buy what
they stumble across that suits them
72% says “Style is important, I want them
to fit what I consider to be my style
41% thinks Italy has the best-dressed
men
Challenge Analysis Product Line Strategies Financials

8. BEHAVIOR
CAR (58%)
FITNESS (60%)
GADGET (70%)
Challenge Analysis Product Line Strategies Financials

9. TREND ANALYSIS
Less demand for
conspicuous logo
More long-lasting
& everyday staple
pieces
Challenge Analysis Product Line Strategies Financials

10. RE-INVENTED MARKET
Men of Generation Y
Classic to Modern
Work to Casual
Challenge Analysis Product Line Strategies Financials

12. SIGNATURE ITEM
“COMPLEMENT” SPORT COAT
Challenge Analysis Product Line Strategies Financials

13. PRODUCT LINE
• Color Swatch Embellishment • Versatile/Easily Mixed and
• Material to fit lifestyle of our man Matched
• Pop of Color • Vintage Buttons
Challenge Analysis Product Line Strategies Financials

14. RE-INVENTED
Exclusive line
Mid-price positioning
Modern, stylish, contemporary
Challenge Analysis Product Line Strategies Financials

15. STRATEG
Y

16. BRANDING
‘RE-INVENTED’ realizes that our brand is
the source of a promise to our consumer
Main Branding Objectives
• Deliver message clearly
• Confirm our credibility
• Connect with our target prospects emotionally
• Motivate the buyer
• Increase User Loyalty
Challenge Analysis Product Line Strategies Financials

17. RE-INVENTED BRANDING
Gain recognition in Men’s
publications: generate buzz
• Facebook & QR Code Application
Expand current market by
capturing a new target market
• Generation Y & Men, 25-35 years old
Leverage customer experience
Increase sales
• Convert prospect to loyal clients
Challenge Analysis Product Line Strategies Financials

18. VISUAL MERCHANDISING
• Placement:
Inside main entrance in
corner
• Adjacencies:
Levis and Dockers
• One Stop Shop
environment
• Giant QR Code on every
display
• Matching ideas
• Color options
Challenge Analysis Product Line Strategies Financials

19. SOCIAL MEDIA
Less demand for
conspicuous logo
Challenge Analysis Product Line Strategies Financials

20. MOBILE QR CODE
JCP Challenge Analysis Product Line Strategies Financials

21. MEDIA ADS MAGAZINES
• Ideal audience • 3 platforms of
profile advertisement:
- Age Group Magazine, Website,
- Annual Income Mobile
- Behavior/Interest
Challenge Analysis Product Line Strategies Financials

22. FINANCIAL
S

23. PRICING
STRATEGY: MARKET PRICE
PRODUCT PRICES
• Signature Sport Coat: $69.99 • T-Shirts: $19.99
• Jacket: $69.99 • Briefcase: $59.99
• Sweaters: $39.99
Challenge Analysis Product Line Strategies Financials

24. “COMPLEMENT”
Sport Coat

25. JCP Profit Analysis
Test Production
Test Production .
Sales at Full Price $ 41,994.00
Sales at Discount Price $ 13,438.08
Total Gross Sales 55,432.08
COGS 25,840.60
Gross Margin $ 29,591.48
Challenge Analysis Product Line Strategies Financials

26. JCP Profit Analysis
Full Production
Full Production
Sales at Full Price $ 3,499,500.00
Sales at Discount Price 1,119,840.00
Total Gross Sales 4,619,340.00
COGS 2,153,383.04
Gross Margin $ 2,465,956.96
Challenge Analysis Product Line Strategies Financials

27. SPI Profit Analysis
Test and Full Production
“Complement” Sport Coat
.
Test Production $ 8,518.88
Full Production $ 709,906.50
Challenge Analysis Product Line Strategies Financials

28. ALTERNATIVE
SCENARIOS

29. Best Case
Complement Sport Coat
Best Case
Sales at Full Price $ 4,899,300.00
Sales at Discount Price 559,920.00
Total Gross Sales 5,459,220.00
COGS 2,461,009.18
Contribution $ 2,998,210.82
Challenge Analysis Product Line Strategies Financials

30. Worst Case
Complement Sport Coat
Worst Case
Sales at Full Price $ 2,099,700.00
Sales at Discount Price 1,679,760.00
Total Gross Sales 3,779,460.00
COGS 1,845,756.89
Contribution $ 1,933,703.11
Challenge Analysis Product Line Strategies Financials

31. Break-Even Analysis
Complement Sport Coat
Full Production .
Break Even Units 43,953
Break Even Point $ 3,076,261.48
Challenge Analysis Product Line Strategies Financials

32. CONCLUSION
S

33. JCPENNEY
Young
Target
Market
Creative
Innovative
Clothing
Advertising
Line
Effective Exclusive
Marketing Branding

34. thank you
questions?

35. APPENDIX
Presentations Financials
Pricing
Goal
Financial - Sport Coat
JCPenney Challenge
Alternative Scenarios
Analysis
JCPenney Analysis
Target Market Profile Appendix
Target Market Behavior
Target Market Behavior(cont.) Analysis
Trend Analysis Market Segmentation
RE-INVENTED Market Segmentation Profile
MARKET Market Segmentation Geographic
Signature Item
Product Line
RE-INVENTED Financials
Strategies Entire Line
Branding Alternative Scenarios - Full Line
RE-INVENTED BRANDING
Visual Merchandising
Social Media
QR Code
Media Ads

36. MARKET SEGMENTATION
Retail Industry

37. MARKET SEGMENTATION
Retail Industry
Consumer aged under 25
This market segment holds 20% of the overall market share which is valued as $38.34 billion.
Customer Profile Teenagers or young adults
Income Limited disposable income
Shopping Behavior More likely to shop in smaller niche stores that offer the latest fashion
products
Consumers aged 25 to 40
This market segment holds 35% of the overall market share which is valued as $67.095 billion.
Customer Profile Employed individuals, sometimes with children
Income Steady income
Shopping Behavior Has the ability to shop for a range of goods under one store
Those with children are also able to purchase goods at competitive price
The quality of the good is more important to consumers as opposed to its
label
Consumers aged 41 to 65
This market segment holds 30% of the overall market share which is valued as $57.51 billion.
Customer Profile Key buyers of department store merchandise
Income Higher disposable income
Shopping Behavior Buy for their grandchildren as they have generally accumulated sufficient
goods for themselves
Tends to purchase higher-tier merchandise for themselves and their
family
Consumers aged over 65
This market segment holds 15% of the overall market share which is valued as $28.76 billion.
Customer Profile Retiree
Income Reduced disposable income stream
Shopping Behavior Reduced demand for goods sold by the industry

38. MARKET SEGMENTATION
GEOGRAPHICS

39. RE-INVENTED
LINE DETAILS

40. ENTIRE LINE

41. JCP Profit Analysis
Test Production
Test Production .
Sales at Full Price $ 170,961.50
Sales at Discount Price 54,707.68
Total Gross Sales 225,669.18
COGS 97,184.60
Gross Margin $ 128,484.58
Challenge Analysis Product Line Strategies Financials

42. JCP Profit Analysis
Full Production
Full Production
Sales at Full Price $ 14,496,750.00
Sales at Discount Price 4,638,960.00
Total Gross Sales 19,135,710.00
COGS 8,250,383.04
Gross Margin $ 10,885,326.96
Challenge Analysis Product Line Strategies Financials

43. SPI Profit Analysis
Test and Full Production
Entire Line
. .
Test Production $ 32,038.88
Full Production $ 2,719,906.50
Challenge Analysis Product Line Strategies Financials

44. ALTERNATIVE
SCENARIOS
FULL LINE

45. Best Case
Entire Line
Best Case
Sales at Full Price $ 20,295,450.00
Sales at Discount Price 2,319,480.00
Total Gross Sales 22,614,930.00
COGS 9,429,009.18
Contribution $ 13,185,920.82
Challenge Analysis Product Line Strategies Financials

46. Worst Case
Worst Case
Sales at Full Price $ 8,698,050.00
Sales at Discount Price 6,958,440.00
Total Gross Sales 15,656,490.00
COGS 7,071,756.89
Contribution $ 8,584,733.11
Challenge Analysis Product Line Strategies Financials

47. Break-Even Analysis
Break Even Avg Units
Style # Item Units Bought Cost Total Cost # of stores
Units per Store
RO5-SCC Sport Coat 100,000 $ 30.76 $ 3,076,261.48 43,953 1,108 90
RO5-JKK Outerwear Jacket 100,000 26.00 2,600,000.00 37,148 1,108 90
RO5-SSI Sweater 100,000 15.60 1,560,000.00 39,010 1,108 90
RO5-CGS Cardigan 100,000 19.50 1,950,000.00 48,762 1,108 90
RO5-TSS T-Shirt 1 100,000 6.50 650,000.00 32,516 1,108 90
RO5-TSG T-Shirt 2 100,000 6.50 650,000.00 32,516 1,108 90
RO5-BCA Briefcase 50,000 26.00 1,300,000.00 21,670 1,108 45
Challenge Analysis Product Line Strategies Financials