Applied Strategy--Current Event-J.C. Penney takes Stake in Martha
Stewart Living
Martha Stewart has joined in a partnership with JC Penney
stores to make her products more readily available to a wider variety of
customers. Martha Stewart Living
products were originally sold in Macy’s stores and still are at this point. But she was recently allowed to serve on the
Board of Directors of her company after being banned from serving for five
years. She has now joined her Board of
Directors again and although she isn’t taking a lead role she is very active in
the decision making process and the development of marketing strategies. Now she has decided to make some strategic
moves to boost her sales by entering in a multi-million dollar deal with JC
Penney stores. JC Penney has agreed to
this deal as well, as a positioning strategy to make their store an American
favorite in the line of retailers. This
is a ten year deal between the two that they are hoping will reignite their
brand that recently had been experiencing a slump in sales.
Martha Stewart as well as JC Penney’s has hired well-known
top executives to serve on the Board of Directors and help run their companies
and oversee the partnership between the two.
Her products should begin selling in February 2013 with JC Penney’s
installing mini-stores within their own stores so that customers can easily
access her products. Her products will
also be sold on her website. Martha Stewart will still remain marketing her
products in her other stores as well. JC
Penney’s will hold 12 percent of the shares in her company. JC Penney’s has previously made a similar
move by housing Sephora stores within their stores and that was a successful
move for them. So they plan to have a
similar success with the partnership with Martha Stewart.
Martha Stewart seems to be determined to make her brand a
household name with her products being marketed and sold in Target, Home Depot,
Macy’s, PetSmart and now JC Penney’s. JC
Penney’s is also making strides to bring high sales and more customers back to
their stores by bringing in a brand that people are already familiar with. There is one risk and that is that Macy’s
stores that have been carrying her products for quite some time isn’t too happy
with her recent partnering with JC Penney and is looking into whether or not
they will continue carrying her products.
So there was a risk in making the new partnership decision. But with careful marketing and having good
strong executives brainstorming the strategies, whether or not Macy’s decides
to carry on won’t hurt the sales volume or profits of Martha Stewart’s line.
The implications of the outcome of this is to bring two
familiar brands together that will play off of each other popularity to boost
the sales for both companies. Practicing
managers should watch the positioning and applied strategy that is going on and
learn from the benefits as well as the mistakes in this deal.
I think that there might be some conflict between JcPenney and Macys. I personally dont shop at JcPenney. Macy's always has great deals and I am a devoted to Macys. I do buy all my housewares from them. I guess Martha Stewart will miss out if Macys decides not to sell their products anymore. I also believe that there are more people like myself who do not like change. I like Macys and will stay by Macys side and the products they sell.
ReplyDeleteThis could be a bad move for Martha Stewart, especially if Macy's decides to drop her line. Some people may have associated Martha Stewart's line as a more upscale line because only Macy's sold it. Now that JC Penney's will sell the line, people may begin to associate the product as cheap and not as exclusive. I don't think people who shop at Macy's will shop at JC Penney's for Martha's line. Both companies target different customers and Martha may lose revenues by moving her line into a brand associated with being cheap. Only time will tell, but I think the move will not be successful.
ReplyDeleteWell actually I am opposite from you Rebeca, I don't shop Macy's and am a devoted customer to JC Penney's. I love their deals. I agree though that people don't like changes. I never could adjust to the fact that Foley's changed over to Macy's. I was a die-hard fan of Foley's all my life and when they changed over to Macy's I just couldn't adjust and I never shop there. I think though that in the case of Martha Stewart, people will be okay witht he changes because she markets her products in may different stores, not just Macy's so I think that the consumer will just look at it as an addition of broader access to her products. I used to buy her linen products at Kmart many years ago when I was just starting out on my own because they were affordable there. I recently saw her line in Home Depot for storage products. So many consumers are seeing her products in various stores so they will probably not view it as change. If Macy's drops her line then that may create a bit of a problem. But I am sure that she is business savvy enough to have thought that potential loss through before making the decision to market her products in JC Penny's. I guess we will soon see what it to happen. Actully I was in JC Penney's on Wednesday and I can see the construction are closed off where I am thinking her ministore will be. It doesn't have the name posted but that is probably where it will be. JC Penney's has done well with the Sephora ministore within their store. I sometimes go there just to shop at Sephora because it is sometimes easier to access than going in a mall.
ReplyDeleteI agree with Allen. Macy is known for carrying more upscale products and JC Penney carries more affordable items. This will undoubtedly affect Martha Stweart seeing that Macy's is now debating on dropping her products. Macy's has been a very well known and successful department store for many years. Sometimes being scarce can help your sales more than having your product everywhere.
ReplyDeleteI personally don't prefer either department store over the other. I shop based on convience and who is having sales. Ideally it will be best for Martha Stweart if Macy's doesn't drop her items and I personally don't see it happening. I think Macy's will lose out if they drop her. JC Penney's made a very smart marketing move and needed to make some changes to boost sales.
ReplyDeleteI completely agree with Kimberly. I prefer Macy's over JC Penny because to me, they have more of the brand name items that I prefer. This partnership has the potential to have a negative affect on sales for the Martha Stewart Living line of products. It obviously would be in the lines best interest to be sold at both JC Penny and Macy's.
ReplyDelete