Failure to Re-Brand the Company

Failure to Re-Brand the Company

Introduction

Change in an organization can have enormous consequences when implemented without proper planning. Stakeholders in an organization need to be aware of  the change and be convinced that  it will benefit them. Resistance to change occurs when some or all the stakeholders fail to support the proposed change. In this research paper, the change to be discussed is the failed re-branding at JC Penney, a retailer in the United States.

Corporate Branding and Business Strategy

Corporate branding is usually part of a business strategy because branding creates a positive image for the business.  The senior management in an organization comes up with the idea of branding in the same way they formulate business strategies. Therefore, corporate branding is hardly separated from business strategy. The re-branding that failed at JC Penney was a business strategy because the retailer had been performing poorly for some time. The re-branding  at JC Penney involved changes in approaches to business processes with the aim of turning the retailer’s performance around. According to Melewar, Gotsi and Andriopoulos (2012), the success of corporate branding depends on senior management’s vision and the interplay with organizational culture. To  demonstrate the relationship between corporate branding and business strategy, Appel-Meulenbroek, et al. (2010)  argue that the characteristics that form an organization’s identity are industry identity and corporate strategy. From this relationship, it is clear that the failed re-branding at JC Penney was connected to business strategy.

Effective Corporate Branding Formation

The success of any corporate branding depends on the customers’ perception of that brand. According to Girod (2005), a corporate brand needs to align its vision and culture to create a positive external image. The external image will consequently influence how customers perceive the brand and may lead to customer loyalty. Therefore, an organization must ensure that customers perceive its brand image positively for it to be successful. Melewar, Gotsi and Andriopoulos (2012) assert that corporate branding requires an endorsement from the entire organization to achieve the expected results. Therefore, an organization planning to effect changes in its corporate brand must consider the views and perception of its internal and external stakeholders.

Reasons why JC Penney Failed to Re-Brand

The most crucial aspect of any change within an organization is to anticipate the reaction of various stakeholders to the changes. JC Penney failed to conduct a market research to determine the effects of re-branding. A market research would have provided the retailer with the probable outcomes of re-branding. Consequently, the retailer would have had time to reconsider the decision to re-brand.

The second reason for the failure to re-brand was changing the sales strategy (Hoffman, 2012). Before re-branding, the retailer operated through giving discounts to its customers. Customers placed great value on the discounting system, especially because of the prevailing economic conditions. Many of the customers who did their shopping at JC Penney were women. One of the retailer’s customers disclosed that women enjoyed a sale that resulted in saving some money through a discount. Such saving ensured that another commodity could be purchased without compromising that customer’s budget. According to Zhuang, et al. (2008), customers form attitudes about brands based on their cognitive understanding of the brands. Therefore, characteristics in the brand influence attitude formation. JC Penney’s customers had formed a positive attitude towards the retailer because of the discounting strategy. They became loyal to the business because they felt that the organization made decisions that resulted in positive outcomes for them. Delgado-Ballester and Munuera-Alema´n (2005)  assert that customers trust a brand because they believe that the brand will always consider them when making decisions. When the retailer changed its brand, customers felt cheated and deserted  JC Penney.

The re-branding failed because JC Penney had lost its uniqueness and was not different from other retailers (Harvard Business School, 2013). The loss of uniqueness was caused by its new store-within-a store concept. This concept introduced boutiques in  the retail stores. The boutiques did not want their brands diluted with discounts, which were a major reason for customers to visit JC Penney. According to Samuelsen and Olsen (2012), brand extension allows a business to use its existing brand name to sell and promote new products using different strategies. When the new products contradict the original strategy, the original brand is diluted.  JC Penney’s brand was diluted when it introduced the store-within-a store concept.

The square logo that was to accompany the re-branding could have had a negative effect on female customers. According to Wang, et al. (2012), the logo design is the corporate visual identity of an organization. Women are likely to be attracted to soft, curvy paths, which means that the sharp edged lines of the square could change their perception about JC Penney. Devlin and McKechnie (2008) argue that customers prefer familiar brands that are consistent. The re-branding could have made the customers feel uneasy because of the unfamiliar design.

Conclusion

The decision to re-brand by JC Penney was hasty and failed to consider its effects to the entire organization’s operations. Failure to consider the customers’ views alienated them from the organization. As a consequence of the changes, the retailer lost uniqueness that made customers loyal to it.

References

Appel-Meulenbroek, R., Havermans, D., Janssen, I., & Kempen, A. (2010). Corporate branding: an exploration of the influence of CRE. Journal of Corporate Real Estate, 12 (1), 47-59.

Delgado-Ballester, E., & Munuera-Alema´n, J.L. (2005). Does brand trust matter to brand equity? Journal of Product & Brand Management, 14 (3), 187–196.

Devlin, J.F., & McKechnie, S. (2008). Consumer perceptions of brand architecture in financial services. European Journal of Marketing, 42 (5), 654-666.

Girod, S.J.G. (2005). The human resource management practice of retail branding An ethnography within Oxfam Trading Division. International Journal of Retail & Distribution Management, 33 (7), 514-530.

Harvard Business School. (2013). What Went Wrong at J.C. Penney? Retrieved from http://hbswk.hbs.edu/item/7334.html

Hoffman, C. (2012). JC Penney makeover fails to spark a turnaround. Retrieved from http://www.cbsnews.com/news/jc-penney-makeover-fails-to-spark-turnaround/

Melewar, T.C., Gotsi, M., & Andriopoulos, C. (2012). Shaping the research agenda for corporate branding: avenues for future research. European Journal of Marketing, 46 (5), 600-608.

Samuelsen, M.B., & Olsen, L.E. (2012). The attitudinal response to alternative brand growth strategies. European Journal of Marketing, 46 (1), 177-191.

Wang, Y.J., Hernandez, M.D., Minor, M.S., & Wei, J. (2012). Branding not just a matter of luck: Making sure logos don’t fall foul of superstition. Strategic Direction, 28 (9), 9-11.

Zhuang, G., Wang, X., Zhou, L., & Zhou, N. (2008). Asymmetric effects of brand origin confusion: evidence from the emerging market of China. International Marketing Review, 25 (4), 441-457.

Last Completed Projects

Are you looking for a similar paper or any other quality academic essay? Then look no further. Our research paper writing service is what you require. Our team of experienced writers is on standby to deliver to you an original paper as per your specified instructions with zero plagiarism guaranteed. This is the perfect way you can prepare your own unique academic paper and score the grades you deserve.

Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.

[order_calculator]