Scroll To Top

By Dick Maggiore and Mark Vandegrift

JCP Struggle with Brand Meaning

Brand Meaning: Can a Brand Change Its Spots?

Famed Apple Stores leader and Silicon Valley wunderkind Ron Johnson thought so. He swept in as JC Penney's new CEO with celebratory bravado. He promised to change the stodgy brand meaning to a younger, hipper and more upscale image.

Seventeen months later, JC Penney's board fired him. The retailer was in unprecedented peril. Sales were in free fall, down by 25%, stock tumbled by almost 70% and losses topped nearly $1 billion as JC Penney burned cash at a stunning rate. It may be the worst performance ever encountered in retail -- there's nothing to even compare this against.

What happened?

Once brand meaning is strongly established in the mind, it's extremely difficult -- if not impossible -- to change. Kodak is a good case study. Refining, adjusting, and honing brand meaning is acceptable.

That's not what Mr. Johnson did.

He did an about-face. He disenfranchised JC Penney's regular customers by taking away the discounts and promotions they had come to expect. They found someplace else to shop. Further, he wasn't able to build enough younger, newer customers who also have plenty of other places to shop.

Instead of focusing on what the JC Penney customer wanted, Johnson seemed intent on teaching the JC Penney customer what she should want. The coupon-clipping JC Penney customer didn't appreciate the "everyday low-pricing" lesson. Johnson actually told a packed audience, "All it takes is courage. We can change a brand overnight." He was blinded by hubris. He set out to change the meaning of the brand.

Some may argue the execution was faulty. However, even flawless execution can't fix bad strategy. Note: The execution was far from flawless. JC Penney is where our grandfather buys his Sunday clothes. Johnson ordered merchandising executives to move away from old-line categories like maternity wear and toward slim-fit polos and European-cut suits -- despite the fact that many shoppers went to JC Penney for figure-forgiving basics.

JC Penney might look to rival Kohl's, which stands for the opposite of everything Johnson had done as JC Penney's CEO. Kohl's gluts customers' inboxes with coupons. It serves the shoppers it has rather than searching for new ones. Aiming for continual progress instead of leaping in the wrong directions, Kohl's is the tortoise to Johnson's faltering hare.

Back in 2005, Walmart tried a similar strategy. It attempted to redefine its brand meaning to upscale. They advertised in Vogue magazine with an eight-page high-fashion advertisement. They even opened an office in Manhattan's Fashion District and presented a fashion show in New York City. It failed miserably. Walmart went back to its low-price strategy. A brand can only stand for one idea.

In this wrenching panic, JC Penney brought in legendary Coca-Cola marketer Sergio Zyman. Zyman is responsible for what many consider marketing's greatest blunder of all time: New Coke. Oh my!

JC Penney is reversing Johnson's strategy of reducing discounts and put coupon advertising in newspapers again. The jury is out. Winning back customers lost is a bit like trying to win back a girlfriend: Occasionally it works; more often it ends in heartbreak. JC Penney's future is in doubt. They may follow Montgomery Ward to retail purgatory. The lesson? Redefining your brand meaning is a very slippery slope!

Dick Maggiore is Innis Maggiore's President & CEO.