In what ways did World War II end the problems of World War I Essay Example for Free

In what ways did World War II end the problems of World War I Essay In the days prior to World War Two, the First World War was referred to as â€Å"the War to end all Wars†. (Devine, 14) Despite this name, only twenty-odd years had passed before the nations of the world once again engaged in armed conflict. The treaty of Versailles and the conditions in Europe precipitated a second large-scale conflict in Europe. (Devine, 16) The conclusion of WWII ended the problems that derived from WWI by ending the Fascist dictatorships of Europe, ending European and Asian imperialism, and shifting military power out of Europe. The Treaty of Versailles created tremendous pressure on Germany, Austria-Hungary, and other nations who bore the blame for the conflict. (Morgan, 18) The economic depression in these nations that resulted from their attempts to pay reparations led to a political climate ripe for the rise of Fascism. (Morgan, 27) The people of nations such as Italy, Germany and Spain were willing to embrace this hyper-nationalist form of government, giving up their freedoms in exchange for the promise of better economic conditions and a return of their respective nations to international prominence. Morgan, 30) The rise of hyper-nationalism in Fascist Germany and Italy was one of the precipitating causes of the Second World War in Europe. Hitler’s Germany began to militarize and â€Å"reclaim† areas of Europe that Hitler declared to be part of the rightful German empire. (Morgan, 108) These regions included all of Austria, and part of the nation of Czechoslovakia, referred to by Hitler a s the Sudetenland (southland). When Germany invaded Poland to return the land to Germany, France and Britain declared war. The results of WWII ended the reign of fascism in Europe. ( Morgan, 117) The personalities around whom the fascist governments were built, Hitler in Germany, and Mussolini in Italy, were killed in the war effort, and their philosophies discredited when the atrocities they committed became public knowledge. (Morgan, 197) Of the Fascists of Europe, only Francisco Franco of Spain, which had remained neutral in the war, survived. (Morgan, 201) After WWII, Germany was divided into a Soviet-controlled Eastern half, and a Republican western half. Nationalist efforts were turned to reunification, rather than conquest. (Morgan, 203) The destruction of the German War machine was absolute, eliminating them as a future threat to stability in Europe. (Morgan, 205) Italy and Japan were similarly disarmed at the conclusion of WWII, making future threats to world stability from these powers unlikely in the extreme. (Morgan, 206) The end of WWII also marked the end of the naked Imperialism that characterized all the major European nations since WWI. Betts, 113) Britain, France, Germany, Japan and other nations granted independence, or protectorate status to their imperial holdings, making self-sovereignty the â€Å"new† goal of international foreign policy. (Betts, 127) Japan was forced to give up the Pacific Islands they had occupied, and withdraw their invasion of China. (Betts, 128) Germany similarly ceded their occupied territories and permitted free choice for the subsequent governments. Betts, 133) One of the world powers that emerged from WWII, the United States, embraced self-determination as the ideal for nations of the world, and began to fight against efforts to engage in imperialist activities on the parts of other nations. (Betts, 144) The conclusion of WWII marked a shift in the dynamic of world conflict. (Levering, 18) During WWI and WWII, dominance on the seas determined a large part of military control. After WWII, nations who had access to weapons of mass destruction became the powers of the World. Levering, 22) For the first time in modern history, the central conflict of the world was not between Britain and Germany or France, but between the United States and the Soviet Union. European powers became pawns in a worldwide power struggle between opposing ideologies. (Levering, 27) The United States used war reconstruction money as a lure to the nations of Europe to shun Communism in favor of republican government. (Levering, 34) After WWII, armed conflict was limited to third-party wars w here one side or the other effectively acted as a proxy for one of the Superpowers. Levering, 46) This was managed to avoid direct conflict between the Superpowers, which could have led to destruction of the entire world through nuclear annihilation. (Levering, 55) As a result, dozens of minor conflicts and a handful of major wars were fought after WWII by indigenous people with military and economic support from the USSR and the United States. (Levering, 58) This scenario played out in countries such as China, Korea, Vietnam, Nicaragua, Cuba, Afghanistan, and many others. (Levering, 75) It is clear that the effects of WWII resolved many of the issues that resulted from WWI. WWII ended European Fascism, eliminated European and Asian imperialism, and permanently shifted the balance of World Power away from Europe. The Treaty of Versailles produced conditions in Europe that made Fascism an attractive and popular option, which played a great role in precipitating WWII. As a result of the unresolved issues of WWI, WWII became the latest â€Å"war to end all wars†. It is hoped by the nations of the world that conflict on the scale of WWII never be repeated in the history of mankind.

The New England Colonial Period

The New England Colonial Period Tony Calloway Discussion Question 1. According to the article, With All the Grace of the Sex, were women active participants in colonial trade? How and why? Women had to be active participants in a colonial trade. I mean most of these women, displayed a matter of filling empty holes in their lives. There were widowed spouses or empty professions within the community. The With All The Grace of Sex article addresses of all practice of manual trade being performed by women because not all wanted to sew or cook. Some had no choice but to do the labor of a profession those others saw as a mans job. Those are jobs typically family responsibilities with everyone playing some duty within the trade. Many of the women did not need men to run the businesses. A lot of the women grew to be champions of these professions out of necessity. The only way there was clear evidence that women did work in these occupations, were the occasional discovery of documentation that has been maintained showing these evidence. Furthermore, within this literature, we would notice how frequently women were becoming apprentices and masters of trades alongside their male counterparts. Granted; the manual labor associated with various occupations, it was a wonder the existence of women apprentice and masters that were in questioned. Men that use forges, hammers and leather working tools had put some the best men to the test. To have the stamina and physical courage these women needed to prove themselves was very impressive. Like my dad use to say do not put tomorrow what can be done today. After reading the article, it would seem that women had to do what they had to do. However, that is the binary of the way women have been for a since the beginning of time. Lesson 3 1. The article, Deaths Head, Cherub, Urn and Willow and the images of the early American grave art give us insight to life during the New England colonial period. How had the views of religion and death changed over the time period, 1720 to 1820? How were these changes reflected on the gravestones? What specifically can historians learn about the Puritan from these stones Jim Deetz Edwin Dethlefsen (1960s-70s) Are two archeologicalist that studied on New England gravestones Identification of 3 main motifs in period 1680-1820. These were the Winged Deaths Head 1680-1780, the Winged Cherub 1760-1800, and Urn Willow 1770-1820. In the 17th and 18th century gravestones in Massachusetts were decorated with a traditional set of designs that have distinctive spatial and temporal limits. The pioneering gravestones in Bostons burying grounds were simple, roughly cut greenstone markers. Individual headstones bared short or no beautifying carving and often had little inscriptions, which ordinarily had a person name, and theyre the date of death. The writings interruptive punctuation, were like a encrypted carving style with a characterized raised period separating the word. Treating them as if they were archaeological phenomena, one can demonstrate and test methods of inferring diffusion, dedication and the culture that carved it. The Early popularity of Death s head design displayed the Puritans attitudes, and Urn Motifs indicated the breakdown of these values. While cherubs appear most premature among an urban innovation society in Cambridge, They remain a nearly insignificant type in this central area but are rapidly being embraced in outer districts further removed from the center of influence. Imperfect reproduction of distinct design gives rise to distinctive local styles of other districts. The delivery of these local forms in time and space presents further insights regarding the religious difference in the Colonial period, including a clear indication of how this change progressed in different geographical areas at different times. The appearance that draws archeologists the most when it comes to Puritan headstones is the uniform appearance of the three types (Deaths Head, Cherub, Urn, and Willow). The Deaths Head representation was very common early on through the 17th century. It was a type that Puritans used to emphasize the mortality of man moreover. However, after the Great Awakening and the spread of the belief in an immortal soul, the Cherub became the more popular type. The Cherub image symbolized resurrection. During the 18th and 19th centuries, right after the revival of the Greek in America, the Urn and Willow grew to be a regularly used motif on tombstones. The quality of the monument was dependent upon two factors, the skill of the stonecutter and the budget of the family. In Boston, stonecutters were also masons, woodcarvers, bricklayers and even farmers carved gravestones as another way of sustaining their families. On numerous occasions, to save money and to deliver a high-quality headstone with fine art and speed, many of the Stonecutters made prefabricated headstones. This way all they would do was insert the name and date of the deceased upon placement of order. It wouldnt take much to seek out this fantastic artwork that can be found in many places in New England to include Copps Hill in Boston the old Freedom Trail, and another favorite spot to Bostonians the Old Burying Point in Salem Massachusetts. Grave markers and the burial grounds in which they are found have become identified as having historical importance, and they have familiarized their topics for research. The traditional cultures, a grave marker serves partly a function of commemoration as well as an indicator of status. To an archeologist, these markers serve as original recordings linking to the departed individuals living as well as, a more comprehensive sense, to the society in which the individual lived and ultimately died. New Jersey can also provide some eighteenth-century grave markers like the ones in Monmouth County. These stones can give some insights into the developmental years of the colony. Although Monmouth County does share the timeline within many similarities of the colonial New England gravestone carving tradition, it also displays significant differences. Hereabouts, the choice of the gravestone in Monmouth County held related to personal inclinations within the broader trends before classified i n New England. However, with the more inquisitive minds; studying gravestones can easily part into disciplines like a historical archaeology, or even like this class art history, even a genealogist when the training is more focused on the individual family. Particular scientific archaeological studies of colonial gravestones were sparked into motion by the outstanding research by James Deetz and Edwin Dethlefsen as before mentioned, who studied within the Boston Massachusetts area. Their conclusions presented a temporally linear course of iconographic designs used in the local carving tradition; starting with stark mortality symbols such as deaths heads, with more hopeful cherubs in the early eighteenth century, and then forming the more profane, neoclassical urn and willow tree designs. Another type of style was the motif, which was used on Bostons seventeenth-century grave markers dubbed the deaths head. Deaths head, often including wings and crossed bones, is a stylized skull that is used by todays motorcycle gangs and gothic. Although folks were thinking that winged skulls been designed to symbolize physical death and spiritual regeneration this was not the case. It is essential to note that Boston-based Puritans were not advocates of using holy symbols, like cherubs, crosses in the place of meeting, of silver, or on their headstones. Puritans were adamantly opposed to connecting the human form to spiritual beings such as God, angels, or spirits. The deaths head, which in its right, is a non-religious symbol and was the first description applied to gravestone carving. Additional decorative motifs following the deaths head were the hourglass with wings symbolizing the concept time flies, elaborately carved on the side panels along with florets, finials, foliage, fruit, and imp-and-dragon figures. The seventeenth and eighteenth-century headstones had solemn inscriptions that inspired passers-by to contemplate mortality and the temporary nature of life on earth. There must have a broad range of the deaths head motif. The features and arrangement of the image depended uniquely on the preferred style of the carver. Those creating their style of carving like silversmiths, tanners, carpenters, and other artisans, gravestone carvers had specific techniques and skills. The style was almost like a calling card for some. Through inquiry research, newspaper and ads, announcements, signed or initialed stones, ledger books, and other original reference materials, twentieth-century historians were able to recognize many of these makers. As the immigrants began to reach a more stable lifestyle and acquire wealth, they were better able to afford more extravagant personal items whichever could serve as representations of their socioeconomic status. Individual belongings could have extended from a broader, more pretentious house; a cabinet full of silver plates imported from China to large lavishly engraved gravestones. Lesson 3 Discussion Question 1. How did the Northern demography differ from that of the Southern colonies? Compare and contrast the social, economic, gender, and racial hierarchy of the New England and Southern Colonies. During the mid-1700s, there was an influx of immigrants migrating to America. During this time there was an abundance of food to go around, and that allowed for a generally good health of the majority of the colonist. By which it would allow more women to reproduce and share a low mortality rate, with the help ladies having several or more children during their life. With this expansion became the love of social class and hierarchy. The North school system celebrated and embraced social mobility, and the entrance of newly prosperous planters, commercial farmers, and retailers into the upper ranks was not only likely but also common. (Faragher 2012) While there was a well-established upper class in the Northern Colonies, there was also the scant and poverty-stricken lower class as well. It was composed of slaves, bound servants, and the poor laborers. This group made little less than half of the Northern colonies population, and their standard of living was just above minimum subsiste nce. While both the Northern and the Southern colonies each had their hierarchy system, and they were similar in ways yet different in others. In Southern colonies, the standards needed for social status was racial purity. These ethnic pure Spanish colonists held the top of the social ladder. Spanish of mixed ancestry were in the middle and Indians, and African slaves were placed at the bottom. Though there was strife for nonwhites in the north, the separation of lines was obscured. The colonist had possibilities to move up or down the ladder at their will. Biracial Northern colonist experienced much more opportunity compared to their Southern counterparts. The Northern upper class was typically made up of landowners, merchants, and prosperous professionals. These upper class Northerners were living a much more lavish and extravagant life than the upper class Southern colonist. References Deetz, J., Dethlefsen, E. S. (2007). Deaths Head, Cherub, Urn and Willow. Retrieved from http://www.histarch.illinois.edu/plymouth/deathshead.html Faragher, J. M., Buhle, M. J., Czitrom, D., Armitage, S. H. (2012). Out Of Many A History of the American People (6th ed.). New Jersey: Pearson. Howe, J. (1998). Greek Revival. Retrieved from http://www.bc.edu/bc_org/avp/cas/fnart/fa267/greekrev.html Revolutionary Windsor. (n.d.). https://sites.google.com/a/windsorct.org/revolutionary_windsor/home/gravestones-puritanism Wooodard, D. D., Doody, D. (). With All the Grace of the Sex. Retrieved from http://www.history.org/Foundation/journal/Spring04/women.cfm

The Effect of Divorce on Children

The Effect of Divorce on Children Divorce and their effect on children Introduction: One of the prime feature of the modern age happens to be the rising index of performance pressure and market competition. Immaterial of the genre, competition happens to be the order of the day in the current times. Quite naturally we see that the pressure, tension and the anxiety quotient in the current times is on an ever increase. The people in this age always happen to on the edge of everything and are running an inevitable race for their retribution. Everything I seems depends on the results or the outcome of this race, the survival of the fittest has become the order of the day. Quite naturally we see that the modern men and women always happen to be in a frenzy regarding the quality of their output or performance. It seems that being on the top is what that matters the most at the of the day. Hence this almost barbaric pressure at work often takes a toll on the personal health and the personal lives of the current age men and women. Family life in the course of events takes ab ack seat and relationships often becomes a second priority. Hence one hand if professional excellence marks the era, on the other hand dilapidation of the institution of relationships is also a quintessential feature of the reigning times. Quite naturally the unfortunate event of breaking down of relationships, an often example of which is found in the divorce settlements of married couples happens to be a regular feature in the current times. The research in its discourse tries to analyze the hidden effects of these divorces on the unfortunate and innocent children of these couples who happens to face the worse brunt of these divorce cases. Problem Statement: As mentioned in the earlier segment although divorce is a settlement that happens between two individuals the brunt is often born by more people than just the man and the woman who decides to part their ways. It has been observed that although divorce is an unfortunate event and is disliked by people and societies all over the world but there are certain more orthodox societies to whom the implications of such an event happens to be all the more grave and perilous. In such societies breaking down of marriages are seen as the worst social dishonor that can be brought down to the families of the man and woman involved in the decision. The situation happens to be all the more grave and disturbing if children are involved. As clearly stated earlier although the decision of parting ways happens to be that of the man and the woman who are living as husband and wife, the total effect of the situation is worst on that of the psyche of the children of the couples. Every research has a statement that happens to be the protagonist idea or concern of the discussion, investigation of which adds further significant dimensions to the discussion. The statement in this case happens to be the facet of the effects of the process of divorce between a couple that can be observed on the psyche of their children. On the pivot of this statement the research delves deeper into the psychological problems that has often been found to develop in the personalities of the children from the broken homes and the consequences of the same that has been recorded pertaining to the society and their own families that gets build up in the future. The problem statement reflects and revolves around the effects of divorce that has been observed on the children especially against the traditional backdrop of UAE society. Research Question: Every research has a few questions stated clearly within the scope of their discussion. I fact it can be said that the course of the research proceeds with the answers that are found in the investigation of the said questions. These questions happens to elucidate the basic points of concern that happens to be the protagonist ideas of the research. In this context it can be said that there is a popular belief that every research is to have as single question answering which will be the sole aim of the research discourse. However in this reference it can be said that a said research can have more than a single question as the central attention of the scope of research. Along with the main or the protagonist question new cans ay that there can be a number of other tributary and distributary questions answering which can be also within the scope of the research. In fact the answers to these tributary and distributary questions might add new dimensions to the research. In the case of our research the main question happens to be is to evaluate the effects of divorce that can be observed on the children of the broken home. The research happens to be set against the particular backdrop of UAE. However in addition to the main question there will be certain other allied questions that will also have to be answered in the course of the research. Following are the other questions that also has to be answered in the course of the discussion: What can be the consequences of the effects of divorce in the future? How does the society gets effected by these children from broken homes in the coming future. What are ways that society can help rebuild the personality and the future of these children. What are the steps that the parents can take to comfort and support their children as parents to their children and jot as a couple after their separation. How to treat such children Research Objectives: The objectives of a research often happens to be to bring about certain effects or to influence the filed in which the research is being conducted or regarding which investigations are being made. The objective for all researches happens to create a difference in the future and to alter the way things are being done in the present. The objective in short of all researches is to make a positive contribution in the filed of research so that the society can see a better tomorrow. Our research happens to be no different. The investigation that we are making into the effects of divorce that has been observed in the children from the broken homes also has its main objective of giving these children a better future by suggesting means and methods to them, their families and the society in general regarding the kind of help that they can extend to these little hearts and minds in the times of some very grave challenges. Following are the objectives that can be listed of our said research: Finding ways and means through which the friends and families can support and comfort children facing the trauma. Make the parents realize the difficulty that they have put their children into and hence the support that they can extend. Creating awareness in the society regarding the responsible and sensitive behavior that the children should be getting from their immediate society. To create an awareness and realization amongst the mature generation, regarding the problems that they throw in the ways of their little ones due to the brash and irresponsible behaviors of theirs’. Conclusions: On a concluding note it can be said that divorce is probably the last resort that is left as an option to the couples. In case the couple also happens to be parents, their decision regarding the future must take in to account their responsibility as a father and a mother and must be in alignment with the task of giving their children a promising and stable future.

Logging the Rainforest :: science

Logging the Rainforest A recipe for local and global disaster Industrial logging is the main cause of forest loss throughout the tropics. It is the starting point of a process leading to the forests' final destruction and substitution by agricultural crops, cattle raising or monoculture tree plantations. These are well known facts supported by more than sufficient evidence. Even more importantly, industrial logging destroys the livelihoods of forest and forest-dependent peoples who, deprived of the resources they depend on, become poor. Contrary to the official discourse, logging does not lead to development; it results in impoverishment and social disintegration. Women are disproportionately affected by logging activities, which provide them with no employment opportunities while depleting the resources they traditionally use and manage. In tropical countries, the process begins with the violation of the territorial rights of indigenous peoples and other traditional communities, who are the righteous owners of the forest. As most people confronted with such situation would, they frequently resist the entry of logging companies to their territories, which in turn usually results in state repression to protect the companies' legal "rights". Forest destruction, human rights abuses, poverty creation is the local part of the equation. On the other side there is wealth creation for transnationals and local elites and an abundant supply of cheap --though very valuable-- raw material to provide rich consumers with elegant toilet seats, sumptuous coffins and other equally "important" symbols of wealth. Some actors are crucial to make logging and end-consumers meet, among which the World Bank, the Inter American, African and Asian Development Banks and the International Monetary Fund. The banks provide the necessary funding for the road infrastructure needed to access the forest, while the IMF --as well as the banks-- force tropical countries into increasing natural resources' exports in order to ensure external debt payments. Being forests one of the main resources available, they are at the front line of exports and are later substituted by other export oriented crops grown in place of the forest. Another very powerful player has now been added to ensure that transnational corporations make wood flow to the consumer markets: the World Trade Organization. The whole process leading to forest destruction is clearly at odds with the international community's commitments to protect biodiversity and to counter climate change and desertification, agreed upon in three legally-binding conventions. At the same time, it also violates human rights commitments, including the protection of indigenous peoples' rights, and the commitments agreed upon at the 1995 Social Summit and the 1995 Conference on Women.

Compare the two poems, Presents from my aunts in Pakistan and Essay exa

Compare the two poems, Presents from my aunts in Pakistan and Search for my tongue. Both poems shows people thinking about their roots and how each poem conveys their thoughts and feelings. In this essay I will be evaluating two poems from different cultures and traditions. Both poems 'Search for my tongue' and 'presents from my aunts in Pakistan' are about true identity and searching for your roots. 'Presents from my aunts in Pakistan' is mainly about a girl who is of mixed race and how she describes the gifts of clothes and jewellery sent to her in England by her Pakistani relatives. There is no rhyme scheme and the poem is written in free verse. Free verse simply means that the phrases are arranged loosely across the page. It is divided into stanzas of varying length. The girl contrasts the beautiful clothes and jewellery of India with English clothing. She describes how it feels like wearing the 'salwar kameez' and how she longed for denim and corduroy. She's drawn to the loveliness of the gifts but feels awkward wearing them because she is more comfortable in English clothes. The poem is full of associated, sometimes contrasting images. An example of a contrasting image is ' of no fixed nationality staring through fretwork in the Shalimar gardens.' Fretwork is basically decorative carving and the Shalimar gardens is an ornamental ark in Lahore, her hometown. The girl describes how life in England differs from life in Pakistan. She talks about the salwar kameez as 'alien' but wanting cardigans from Marks and Spencer's. The way the women live is somewhat different from that of England. For example her aunts were in shaded rooms, screened from male visitors whereas the women in England go o... ... left with. The speaker imagines herself there in Lahore - somewhere she has been only in her thoughts. However she is of no fixed nationality. This sounds a slightly threatening phrase. After thoroughly reading the poems, I have arrived at two main conclusions. Firstly it is important to know where one comes from, which is perhaps what the girl in the poem was lacking as a child and it is also important to know what has gone into one's making, even quite far back, I think it gives you a sense perhaps of richness. Secondly it is sometimes very difficult knowing two languages but having to neglect the one that belongs to you. One's mother tongue is an important link to your family and your childhood. Last but not least I agree deeply with the statement and I quote ' that's the deepest layer of my identity' which was said by Sujati Bhatt, the writer.

The Role of Media in Society

In the world of today, media has become almost as necessary as food and clothing. It is true that media is playing an outstanding role in strengthening the society. It helps us to know current situations around the world. The media has a strong social and cultural impact upon society. Because of its inherent ability to reach large number of public, it is widely used to convey messages to build public opinion and awareness, its duty is to inform, educate and entertain the people.One of the major duties of media today is to inform the people about the latest happening around them and the world. They cover all the aspects of our interest like weather, politics, war, health, finance, science, fashion, music, etc. The need for more and more news has evolved into creation of dedicated TV & radio channels and magazines. People can listen, watch and read latest news whenever and wherever they want. Media people from television and print takes the risk of their lives to inform us about import ant news.The original idea behind the media was certainly to entertain masses. Media connects us through several mediums. Especially internet has become a need almost for every single individual both for our work and to connect with our friends. Facebook, is a global website where everyone can sign up and have an account. Since 2004 facebook has impacted the world. 80 percent of social media users prefer to connect with brands through Facebook because of its popularity.Roughly, near of 163,071,460 of americans have a facebook account. This is more than the half of the population of the United States Of America. To conclude, media plays a big important role in our society. Though it can cause annoyance for some people, it actually informs us about what it is going on through different mediums. We shouldn? t blame the media because I can assure we all have been involved with it at least once in our life.

J.C. Penney’s “Fair and Square” Pricing Strategy Essay

Retailing is hard, and that’s what Steve [Jobs] said to me when we started stores at Apple. — Ron Johnson, CEO, J.C. Penney1 It was August 2012 and the release of second quarter earnings was looming for Ron Johnson, the chief executive officer of J.C. Penney, one of America’s first department stores. Johnson, HBS ’84, had intimated to Wall Street that the retailer’s second quarter results were likely to miss expectations again, following dismal first quarter results that had sent the company’s stock price careening to less than half of its February 2012 value of $43 a share. The Q1 news released in May was grim: a $163 million loss, same store revenue down 19%, and the number of customers shopping in J.C. Penney stores down 10%. These results were particularly disheartening given the company’s radical repositioning of its business model and its brand in February 2012. The centerpiece of the repositioning initiative was a switch from J.C. Penney’s existing high-low pricing strategy, in which the retailer ran frequent sales to offer customers deep discounts off of it s higher list prices, to a new strategy the company dubbed â€Å"Fair and Square† pricing. â€Å"Fair and Square† pricing was meant to simplify J.C. Penney’s pricing structure and make it more straightforward for customers to shop. It offered great prices every day, with less frequent price promotions. The company touted its new pricing strategy as offering â€Å"no games, no gimmicks† and invited consumers to â€Å"do the math† to see how it offered them cheaper prices on a regular basis with less hassle. Moving away from high-low pricing was a massive shift for J.C. Penney. In 2011, the retailer spent $1.2 billion to execute 590 different sales events and promotions2 and generated 72% of its $17.3 billion in annual revenue from products sold at steep discounts of more than 50% off of the initial list price.3 Wall Street was initially  supportive of the company’s plans for change. Investors, who sent J.C. Penney’s stock soaring up 24% following the announcement of the new pricing plan, viewed it as a way for J.C. Penney to escape the ruthless downward spiral of escalating price promotions that gripped America’s retailers struggling to survive the economic recession. But by mid-summer 2012, customers and shareholders appeared to be voting with their feet, leaving the retailer in droves. Was Johnson’s new pricing strategy misguided or was it just a matter of time before customers fully embraced it? Johnson was under enormous pressure to turn things around quickly as the all-important back-to-school and holiday shopping seasons were imminent. Many voices were calling on him to consider changing the pricing strategy again. ________________________________________________________________________________________________________________ HBS Professor Elie Ofek and Professor Jill Avery (Simmons School of Management) prepared this case. This case was developed from published sources. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright  © 2012, 2013 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only by Jack Cherewatti in MKTG MGMT taught by S. Adam Brasel Boston College from November 2014 to May 2015. For the exclusive use of J. Cherewatti 513-036 J.C. Penney’s â€Å"Fair and Square† Pricing Strategy Company Background Johnson was at the helm of what at one time was considered America’s most  venerated department store. Once the largest department store chain in the country with over 2,000 stores, as of 2012, the 110 year old retailer operated 1,100 stores, claiming to serve more than half of America’s households with 41 million square feet of retail space. Founded by James Cash Penney in 1902, the company’s first outlet was opened in a Wyoming mining town under the name â€Å"The Golden Rule,† that signified its philosophy of treating customers the way Penney himself wished to be treated. Johnson believed that his â€Å"Fair and Square† pricing plan corresponded to the founder’s beliefs, â€Å"Now if you go back to the founding of this company, James Cash Penney believed in everyday fair prices. He said, ‘We don’t mark goods up just to mark them down. We don’t believe in sales.’†4 The company enjoyed years of rapid growt h and expansion. By its 50th anniversary, annual sales exceeded $1 billion. It initially offered consumers one stop shopping as a mass merchandiser, selling soft goods, such as clothing, as well as hard goods, such as appliances, hardware, electronics, and sporting goods. Its retail business was joined by a mail order catalog in 1963 and an ecommerce website in 1998. However, following tough times in the 1980’s, the company reorganized, phasing out its hard goods lines and refocusing on its soft goods to become a fashion oriented department store. But by its 100th anniversary, the company appeared to be running out of steam. Price-oriented mass merchandisers, such as Walmart and Target, had garnered the lower end of the market, while higher end department stores, such as Macy’s and Nordstrom’s, were catering to the upwardly mobile middle class. Although the economic recession of 2008 was difficult for all retailers due to consumers’ increasing frugality, middle market retailers, like J.C. Penney and Sears, were hit the hardest. By 2011, J.C. Penney’s stores were old, often disorganized, and faded, and the brand and its merchandise were starting to feel dated. About 400 of its stores were located in small towns, such as Alpena, Michigan with a population of a little over 10,000. In such towns, there were often only few, if any, other department stores. The remaining 700 or so stores were located in major metropolitan areas, often in suburban malls, such as the Northshore Mall in Peabody, Massachusetts (15 miles north of Boston). Following years of store closings, sales malaise, declining market share,  slumping earnings, and weak stock market performance, activist investor and hedge fund manager, William Ackman (HBS ’92) obtained an 18% majority shareholder position in the company in 2010–2011. He was determined to turn J.C Penney around and extract its value, much of which was locked up in its vast real estate holdings that were estimated to be worth $11 billion.5 J.C. Penney owned 400 of its retail stores and paid low rents (an average of less than $5 per square foot) for the remainder. Specialty stores like Gap paid much higher rents (around $40 per square foot) for their retail space.6 Looking to shake up the company, Ackman was instrumental in luring Johnson to take the CEO position. Johnson was a big catch. In the 1990s, he was vice president of merchandising at Target where he helped transform the mass merchandiser into a hot retail brand selling stylish yet affordable products. During his time there, Johnson negotiated a contract with designer Michael Graves, beginning Target’s profitable partnerships with high end designers, which enhanced its brand image as a chic, fashion-forward retailer. Starting in 2000, he worked with Steve Jobs to develop the wildly successful Apple retail stores. Johnson was the brainchild behind the â€Å"Genius Bars† concept, a free technical help and support area staffed by knowledgeable customer service representatives, widely touted as one of the most innovative retail concepts of the last decade. Johnson was regarded by many as creative and determined; according to a friend, â€Å"What people loved more about him than his talent was his persistence. He was just relentless.†7 Johnson’s deep retail experience combined with his wholesome charisma and boyish enthusiasm made him the perfect change agent. The media dubbed him the â€Å"Steve Jobs of the retail industry† and on the day his appointment was announced J.C. Penney’s stock jumped 18%. An Industry under Pressure J.C. Penney’s 2011 sales were lower than they were in the 1990s and the retail landscape was getting more competitive. Department stores, in particular, were under increased pressure. New retail formats, such as big box retailers like Walmart that operated free standing supercenters selling mass merchandise and small specialty stores like Gap and J. Crew that were located in shopping malls and offered specialized merchandise, were squeezing department stores out of the market (see Exhibit 2). An emerging challenge came from large international clothing retailers, such as H&M and ZARA, that were aggressively entering the U.S. market. These retailers relied on shorter product life cycles and partnerships with top designers to offer fast-fashion merchandise at relatively low prices. Johnson explained the challenge as he stepped into his new role: Over the past 30 years the department store has become a less relevant part of the retail infrastructure, largely because of decisions the stores have made. As America exploded with big box and specialty stores and new shopping formats, department stores abdicated their unique role instead of engaging the competition. They retreated from categories and assortments that made them distinctive. Department stores were once the most popular places for Americans to shop, offering distinctive merchandise in elegant settings that provided special services, such as tearooms, salons, and on-site tailoring, and served as social hubs. Johnson reminisced, â€Å"In the golden age of department stores, America’s families came for more than just to shop. They were able to have fun experiences and were offered a range of useful services. . . . If we want to transform the department store, we have to understand what happened. These stores were a pillar of the community.†9 Johnson, unlike others, believed that department stores could be revived. â€Å"There’s no reason department stores can’t flourish. They can be people’s favorite place to shop. They’ve got all these strategic advantages—the lowest cost of real estate, exceptional access to merchandise, scale to create enormous marketing power, colocation with specialty stores. And people like stores  with huge assortments and one-stop shopping.†10 J.C. Penney’s performance had been lackluster for quite some time, and the retailer was losing market share even within the shrinking department store channel (see Exhibits 3 and 4). Competitors Macy’s and Kohl’s were nipping at J.C. Penney’s business from both the high and low end. The average J.C. Penney customer only visited a store four times per year and sales per square foot ($156) were low compared to those of its competitors and the specialty stores Johnson hoped to emulate (Gap $30011, Apple $5,626 in sales per square foot). 12 Department stores and big box stores had increased their promotional budgets since the outbreak of the Great Recession in 2007 and most used blockbuster sales, coupons, and frequent price promotion to drive purchases. According to consulting firm A.T. Kearney, more than 40% of the items Americans bought in 2011 were bought on sale, up from 10% in 1990.13 Many retailers were eager to wean shoppers off of the big discounts that had become commonplace. Competition was also increasing from online retailing. Yet Johnson believed brick and mortar stores were still relevant, â€Å"Physical stores are still the primary way people acquire merchandise and I think that will be true 50 years from now. . . . A store has got to be much more than a place to acquire merchandise. It’s got to help people enrich their lives. If the store just fulfills a specific product need, it’s not creating new types of value for the consumer. It’s transacting. Any website can do that.†14 Many of J.C. Penney’s largest competitors, such as Macy’s, seemed to have a different  view and were investing heavily in their e-commerce operations and in catering to what they called the â€Å"omnichannel† consumer, who accessed the retailer through the web, on mobile devices or in physical stores (often as part of the same purchase decision). Although it had been a pioneer in multi-channel commerce, with 2001 combined cata log and web sales of nearly $3.4 billion, J.C. Penney’s ecommerce sales had stagnated over the last three years while those of Macy’s and Kohl’s had grown substantially during the same time frame.15 (See Exhibit 5 for E-commerce sales growth). J.C. Penney’s Radical Makeover Following his appointment in November 2011, Johnson determined that nothing short of a complete overhaul would solve J.C. Penney’s problems. Just two months after taking the helm, Johnson and his newly recruited leadership team, culled largely from Apple and Target, announced a radical repositioning of the J.C. Penney business model and brand. Following the announcement, Forbes magazine dubbed J.C. Penney the most interesting retail story of the year, proclaiming, â€Å"This week, Johnson took a sledgehammer to the J.C. Penney way of doing business. It’s the most exciting thing I’ve seen in retail since Apple opened stores, again with Johnson at the helm.†16 The turnaround plan evoked J.C. Penney’s founding spirit, and Johnson declared it a reclamation of the company’s heritage. J.C. Penney’s website announced, â€Å"Over 100 years ago, James Cash Penney founded his company on the principle of treating customers the way he wanted to b e treated himself: fair and square. Today, rooted in its rich heritage, J.C. Penney Company, Inc. is re-imagining every aspect of its business in order to reclaim its birthright and become America’s favorite store. . . . At every visit, customers will discover straightforward Fair and Square Pricing.†17 The four-year plan involved several distinct, yet integrated elements that touched every part of the business and were designed to recreate a golden age department store that appealed to all Americans, across age, income, and geographic demographics. As Johnson explained, â€Å"We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America’s favorite store. Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated—fair and square.†18 New Logo J.C. Penney had been tinkering with its brand logo, changing it three times in three years. In 2011, the company asked the public for help in redesigning the logo in a crowd-sourcing experiment. The winning design was submitted by a University of Cincinnati student and was unveiled with much fanfare via social media. In 2012, Johnson scrapped this design and hired an agency to redesign the logo once again. The new logo evoked the American flag with red, white, and blue colors and the letters â€Å"jcp† in lower case font within a square that represented the new â€Å"Fair and Square† mantra. J.C. Penney, which many affectionately called â€Å"Penney’s† would now be known as â€Å"jcp.† (See Exhibit 6 for the new logo.) New Brand Spokesperson One of the most exciting and controversial developments of the plan was the announcement of comedian and talk show host Ellen DeGeneres as the new brand spokesperson. DeGeneres, who once worked at a J.C. Penney store as a teenager in Louisiana, appeared in television advertising, developed J.C. Penney themed skits for her popular talk show, and tweeted about the company on Twitter. Johnson proclaimed DeGeneres to be â€Å"one of the most fun and vibrant people in entertainment today, with great warmth and a down-to-earth attitude. . . . Importantly, we share the same fundamental values as Ellen.†19 Shortly after DeGeneres’ advertising debut, the conservative Christian group One Million Moms took offense, citing DeGeneres’ homosexuality as  problematic for the brand’s image and its traditional family shopper demographic. The group asked its members to boycott J.C. Penney and to call their local store manager to ask for DeGeneres’ removal as spokesperson. DeGeneres went on the offensive to defend her personal values and to reassert her relationship with her fans and with J.C. Penney, producing a witty, yet heartfelt response delivered on her talk show that quickly went viral on the social web. A firestorm erupted and played out on J.C. Penney’s Facebook page, where both pro- and anti-gay posters pledged their support for and/or rejection of the retailer. J.C. Penney survived the controversy by standing firmly behind its choice of spokesperson. The protest event generated significant positive press for the company and Facebook feedback was more positive than negative. Riding the wave of publicity, J.C. Penney went on to feature two gay dads in a widely touted Father’s Day advertising campaign. New Store Design While the new logo and spokesperson were short-term fixes that could be executed quickly, Johnson knew from his experience at Apple that, to really make a difference, he had to make significant changes to the product offering, a longer term proposition. He embarked on a multi-year plan to re-energize and redesign J.C. Penney’s product offering and its merchandising at retail. He began by forging new supplier relationships with top brands like Martha Stewart and hot designers like Nanette Lepore to create J.C. Penney-specific merchandise lines, a strategy reminiscent of Target. He then went to work to improve the quality of J.C. Penney’s sagging and dated private label brands, Worthington, St. John’s Bay, The Original Arizona Jeans Co, and Stafford, to reinvigorate them and restore their brand integrity. These efforts could also build on J.C. Penney’s recent purchase of the Liz Claiborne brands (which, among others, included Liz Claiborne branded apparel, L ucky Jeans, Kate Spade and Juicy Couture) and the ongoing opening of about 300 Sephora locations inside J.C. Penney stores, which offered a select set of Sephora beauty care products. 20 He envisioned the in-store retail environment as a series of interactive specialty â€Å"Shops,† along a visually engaging and vibrant â€Å"Street,† with a central â€Å"Square† that would serve as the social hub of the store. J.C. Penney’s vast array of  merchandise, currently hung on crowded racks and shelves, would be regrouped and merchandised in 80-100 â€Å"stores-within-a-store,† each meant to simulate the buying experience of a specialty shop. The first shop to appear was devoted to jeans and featured a denim bar, trained fit specialists, and Levi’s innovative Curve ID program that helped women find the right jeans for their body type (see Exhibit 7). Plans for future shops included Joe Fresh and Mango. The company planned to install two to three new shops each month, beginning in August 2012, over a four year period. Many of the shops were designed to pull in younger shoppers, a deficit in J.C. Penney’s current customer base. The â€Å"Street† would consist of wider aisles with a fresh, clean look, more streamlined with less signage and bold, colorful, upscale graphics featuring the square from the new logo (see Exhibit 8). Each month would have its own unique personality and color-coded signage that changed the look of the store to freshen its appeal. Ten thousand square feet at the center of the store would be designated for the â€Å"Town Square.† In this area, J.C. Penney planned to offer complimentary services, such as gift wrapping, and special promotional events to create fun and excitement. During the summer of 2012, the company offered free hot dogs and ice cream, free â€Å"Go USA† Olympic t-shirts during the Summer Olympics, and free back-to-school haircuts for school children. Johnson summarized his vision for the new environment, â€Å"We are going to make the store a place people love to come-just to come. We’ll transform the buying experience not unlike what we did at Apple.†21 New Sales Structure To support the new retail environment, Johnson needed to re-energize J.C. Penney’s sales force. His goal was to create a team of specialists who were product experts, much like Apple’s Geniuses. J.C. Penney sales clerks had always been paid commissions based on how much they sold. This system encouraged sales clerks to sell aggressively to customers. Johnson felt that this aggressive sales culture did not fit with the new â€Å"Fair and Square† positioning and set out to change it by eliminating all sales commissions. It was a controversial decision, especially among the sales employees, many of whom had just been through a wave of layoffs and were nervous about keeping their jobs. Johnson explained his rationale for the change, â€Å"A lot of great retailers don’t use commissions. We never used them at Apple. . . . And I think it’s a better thing to do to pay people in advance for what you want them to do and let them look in the customers’ hearts and try to help them. . . . We think we’ve got a great way to do business for the middle class, where we really put a big bear hug around the middle class and help them look better and live better every day.† 22 But some employees expressed dissatisfaction, â€Å"I must take offense at Ron Johnson’s reason for eliminating commission. Ron Johnson should remember that J.C. Penney is not Target, we are better. When people come into our store they expect to be greeted, they expect someone to be available to help, they expect good service,† said a sales associate. Another associate claimed, â€Å"I lost about $250 per pay period and Mr. Johnson thinks this is FAIR and SQUARE. From all of J.C. Penney’s little workers, this stinks.† Another lamented, â€Å"We long-term employees are heartbroken at what we see around us. Ron Johnson may have a grand plan, and it may work, but we feel like he is destroying ‘us’ in the process of implementation. It has become an awful place to work, short-staffed to the point that we struggle to properly service what customers we do have.†23 But without a doubt, the cornerstone of the change program was a new pricing scheme that many believed to be the riskiest part of the strategy. The New Pricing Strategy Looking at the numbers, Johnson believed that he needed to address the existing high-low pricing structure that had gotten out of control. J.C.  Penney’s customers had become hooked on the deals; over the past ten years, the average discount to get customers to buy went from 38% to 60%24. â€Å"At some point you, as a brand, just look desperate. J.C. Penney spent over $1 billion [on price promotion], and the customer didn’t even pay attention,† he agonized.25 In his first report to shareholders, he spoke about the detrimental long term effects of excessive price promotions, â€Å"Plagued by the ‘games’ of the industry over the last several decades, retailers-including J.C. Penneybarraged customers with a constant stream of promotions that proved to be ineffective. Each time we participated in this pricing war, we were discounting our brand and eroding the trust and loyalty of our customers.† The company announced its â€Å"Fair and Square† pricing plan in January 2012. The plan had three pricing tiers. First, the company reduced prices by an average of 40% to offer consumers an â€Å"Every Day Fair and Square† price. Second, every month the company ran a â€Å"Month Long Values Event† with special pricing on seasonal items, marked down an additional 20-29%, meant to coincide with events such as Back-to-School and Father’s Day. Third, every first and third Friday of each month (paydays for many working Americans) were designated â€Å"Best Price Fridays,† where J.C. Penney would offer special deals on items it was looking to liquidate, about 20% of the store’s stock, at deals of about 1/3 off of the every day price. Each price point was supported by unique signage at retail, (see Exhibit 9). J.C. Penney eliminated its famous â€Å"Doorbuster† sales, such as those that it traditionally held on Black Friday, the day after Tha nksgiving and the busiest shopping day of the year, that featured outrageously low prices on  over 500 items from 4:00 a.m. to 1:00 p.m. Exhibit 10 shows an example of the different price tiers. Importantly, J.C. Penney avoided using the words â€Å"sale† and â€Å"clearance† in its messaging of the new program to consumers. Said Johnson, â€Å"Sale is not in our vocabulary. . . . Every item in the store is priced to be its best price every day.†27 The â€Å"Fair and Square† price was the only price listed on the price tag, moving J.C. Penney away from the practice of listing the manufacturer’s suggested retail price (MSRP) and the sale price, which was intended to show customers how much they were saving relative to somewhat fictitious list price. In the highly competitive world of retailing, nearly no one priced goods at the MSRP. Breaking with another retailing best-practice, J.C. Penney ended all of its â€Å"Fair and Square† prices with .00 instead of .99, rounding up to the nearest dollar. Johnson also instituted a no restrictions â€Å"Happy Returns† return policy, designed to take the hassle out of returning items, eve n without a receipt. In effect, the new plan combined elements of two traditional pricing strategies. The â€Å"Every Day Fair and Square† prices represented an everyday-low-price (EDLP) strategy, while the â€Å"Month Long Values† and â€Å"Best Price Fridays† maintained some emphasis on high-low pricing. High-low pricing strategies are intended to allow retailers to use price discrimination to maximize the average price paid by customers who differ in their willingness to pay. Customers who are highly price sensitive wait for sale days to purchase, use coupons and rebates, scour the crowded clearance racks to find a bargain, and take advantage of retailer’s door buster specials on big shopping days like Black Friday. Customers who are less price sensitive buy when it is convenient for them, tend not to use coupons and rebates due to the time it takes to clip and organize them, and rarely join in on door buster specials or clearance sales. Thus, the retailer reaps higher non-sale prices from many of their purchases. However, given the predominance of high-low pricing strategies across retailers in today’s marketplace, even less price-sensitive consumers had become savvy about waiting for sales to buy or comparing across retailers to find the store offering the best prices that week. Instantaneous price comparisons were  getting easier, given the rise of mobile applications that allowed a consumer to scan a bar code on a product and find the lowest price for it at online retailers and nearby stores. Kohl’s was an aggressive high-low retailer, featuring small electronic signs on shelves throughout the store that displayed original prices and discounted prices. These signs allowed Kohl’s the flexibility to change prices instantly, to facilitate frequent, short-term sales. Marketing consultant Jonathan Salem Baskin offered his thoughts on the high-low practice retailers engage in, â€Å"When no price is ‘the’ price for an item, it means that instead retailers engage customers in a constant cat-andmouse game in pursuit of the truth. No individual store can own sale pricing; each simply participates in a round-robin of discounted offers that its competitors have and/or will again match.†28 Johnson felt that today’s retail customer was savvy, â€Å"The customer knows the right price. To think you can fool a customer is kind of crazy.†2 EDLP pricing strategies, such as that offered by Walmart, promise consumers that they will pay the same, low price every day. This frees customers from waiting for sale periods to purchase, and eliminates the need for retailers to offer coupons to drive purchase or to engage in constant advertising of price promotions via weekly newspaper circulars. EDLP is designed to make customers feel comfortable purchasing at the retailer without worrying that they could be getting a better deal somewhere else or at another time. In general, most department store retailers used high/low pricing strategies. Macy’s and Sears had flirted with EDLP pricing in the past; but both had largely abandoned it once they realized how addicted department store customers were to sales, coupons, and other discount programs. Although  Macy’s still offered a limited set of items at an â€Å"everyday value† price, it heavily supplemented this practice with aggressive coupons and frequent sales events for the majority of the goods it carried. Macy’s customer Marietta Landon summarized the promotion addicted retail climate, â€Å"Especially Macy’s—they make every weekend a sale with saving passes and advertising galore.†30 The new pricing strategy was a big shift for J.C. Penney, a company known and loved for its JCP Cash coupons distributed to customers via direct mail and email, its RedZone Clearance aisles, and its weekly circulars advertising that week’s price specials. The â€Å"Fair and Square† pricing program would eliminate all coupons and weekly circulars; instead the company would distribute a high quality, editorial content-heavy glossy magazine each month to highlight its Monthly Values. The 96page magazine was as much a branding vehicle as it was a promotional one. $80 million in promotional funding would support each Monthly Value event. J.C. Penney now promised its customers that they would not have to â€Å"jump through hoops to get a good price†. Johnson hailed the strategy for its simplicity and transparency and the way it respected customers, â€Å"People are disgusted with the lack of integrity on pricing,†31 adding that â€Å"We want shoppers to shop on their terms, not ours.† Johnson intimated that â€Å"By setting our store monthly and maintaining our best prices for an entire month, we feel confident that customers will love shopping when it is convenient for them, rather than when it is expedient for us.†32 Michael Francis, J.C. Penney’s new president, was excited about the new pricing moves, â€Å"We are redefining the J.C. Penney brand so we become a store for all Americans, by offering an experience they cannot get anywhere else. This will start by freeing consumers from the barrage of promotions and undifferentiated shopping experiences they have become used to and replacing it with something entirely fresh and new that is evident in every aspect of our store.†33 He added, â€Å"It will be a breath of much-needed fresh air and give [customers] reasons to visit J.C. Penney more often than ever before. Our objective is to make our customers love to shop again.†34 Francis was recruited by Johnson from Target and offered a signing bonus of $12 million  and a total compensation package worth $44.7 million. He was charged with managing the marketing and merchandising efforts. Reactions to â€Å"Fair and Square† Pricing  Industry observers could not contain their strong opinions on the new pricing strategy. Some called the move â€Å"refreshing, daring and probably exactly what the retailer needs,† noting that â€Å"it’s a shocking move for any retailer, let alone a department store where high-low pricing and promotions have long been the norm.†35 But others were far more skeptical. Pricing consultant Rafi Mohammed proclaimed, â€Å"J.C. Penney lacks the differentiation to make this pricing strategy successful. . . . When selling a relatively undifferentiated product, the only lever to generate higher sales is discounts. Even worse, if competitors drop prices on comparable products, J.C. Penney’s hands are tied-it is a sitting duck that can’t respond.†36 Mohammed also noted, â€Å"J.C. Penney’s Every Day prices will not be as low as the biggest discounts that it once offered. Instead, its pitch to customers is why play the â€Å"wait for the rock-bottom price† game when Penney offers â€Å"pretty good† prices every day?†37 Ignoring the skeptics, Johnson was committed to his new pricing plan, rolling it out across all stores on February 1st, after deciding not to conduct market research to test its appeal with customers, â€Å"We debated whether there was a way to test. . . . We would have needed everyone to run the old business model and would have had to add new people to run a test in 10 percent of our stores. . . . We knew the customer would love the new strategy. We decided to get on with our future.†38 Based on his experience at Apple, Johnson also believed that  customers didn’t always know what they wanted; it was up to companies to lead the way, â€Å"You can’t follow the customer. You’ve got to lead your customers—anticipate their needs and meet those needs, even before they know what they want.†39 A lot was riding on the decision. COO Mike Kramer explained, â€Å"We are fundamentally reimagining every aspect of our business and we fully expect the bold and strategic changes we are making to our operations will result in improved profitability. This should enable us to fund the transformation of J.C. Penney’s store experience, while at the same time returning value to shareholders with steady earnings growth.†40 Communicating â€Å"Fair and Square† DeGeneres was featured in a new advertising campaign to usher in the new â€Å"Fair and Square† positioning. Bearing the tagline â€Å"Enough. Is. Enough,† the campaign encouraged consumers to revolt against complex pricing structures, never-ending sales, an overabundance of direct mail circulars and coupons cluttering their mailboxes, and the hassles of returning unwanted products without a receipt. In the ads, DeGeneres travels back in time to ancient Rome, Edwardian England, and the Wild West to learn if today’s confusing price environment was always the norm. She encourages customers to reject the crazy price environment. The creative campaign was witty and contemporary; many found it reminiscent of Target’s award-winning advertising. It was quite a departure from J.C. Penney’s previous campaigns that were more typical of department store messaging. Launched during the Academy Awards broadcast, the ads appeared to be a hit with consumers. Ace Metrix reported that the ads scored well above average on persuasion and watchability metrics and achieved a personal best score for J.C. Penney.41 Initial Results In the first three months following the launch, 67% of products sold at J.C. Penney were purchased at the â€Å"Fair and Square† price, the highest price the retailer listed. Johnson could not hold back his satisfaction, â€Å"This is profound. People are now buying at the first price, [the] right price. That’s the dream of every retailer.†42 However, trouble was looming on the horizon. Through mid-March, mothers, a critically important target market for most department stores, steadily scored J.C. Penney lower on valueperception scores. These women, suddenly not receiving coupons and not seeing the weekly price promotions in the circulars, were downgrading their opinion of whether J.C. Penney offered good value for the money.43 This was despite the fact that J.C. Penney’s prices during the time period were actually quite competitive. A Deutsche Bank analyst report showed that for a random basket of 50 identical items, J.C. Penney was 9% cheaper than Macy’s, and 26% cheaper than Kohl’s. Consumer research firm BIGInsight reported negativity among adults 18+ for whether J.C. Penney’s advertising campaign was â€Å"Hot or Not?† and showed Macy’s gaining ground on J.C. Penney in women’s apparel shopping trips following the launch (See Exhibit 11). Morgan Stanley’s Michelle Clark reported consumer survey results revealing that â€Å"Shoppers think that the J.C. Penney of old actually offered better value than the â€Å"fair and square† model introduced a few months ago. Of the consumers who had been inside a J.C. Penney store since February, more cited higher prices (rather than lower) at the department store. In fact, only 16% of shoppers associated â€Å"Best Prices† with JCP. Furthermore, customers cited that bargains were harder to find and fewer aisles with deals were evident (see Exhibit 12).45 Loyal J.C. Penney customers were moving away from the retailer. One shopper, Wendy Ruud, complained that she was no longer receiving coupons from J.C. Penney and was shopping more frequently at Target and Walmart, â€Å"The closest J.C. Penney is about a half hour away from me. If I don’t get a special  discount, it’s not worth the trip,† she said.46 Another shopper e-mailed the Huffington Post saying, â€Å"They are catering to the younger shopper, and it isn’t the younger shopper that kept them afloat.†47 A third who considered herself â€Å"frumpy and proud,† commented, â€Å"He’s working hard to ‘de-frump’ the store without considering that many if not most of its customers might have shopped there precisely because they like the more conservative frumpy look.† 48 These early indicators played out in J.C. Penney’s first earnings report following the launch of the new plan. Johnson had to announce a significant earnings loss ($163 million) based on plummeting sales revenues (-19% overall, with e-commerce sales dropping 28%), gross margin compression (from 40.5% to 37.6%), and decreasing customer conversion. Johnson asked investors to be patient, calling the first quarter sales drop â€Å"the price we’re paying to get integrity back.†49 He held fast to his convictions, â€Å"We had to make the bold step. It’s one big year we have to go through. It’s really hard but we’ll get through it.†50 Investors showed no patience, sending the company’s stock down 20%, the biggest single day drop in over four decades.51 The critics did not waste time to pile on Johnson. Time columnist Brad Tuttle wrote, JC Penney’s message seems to be one that some shoppers don’t want to hear. They like playing games and hunting for deals, and the markdown from the original price is how they keep score. By eliminating coupons and most â€Å"sales,† JC Penney has been saying it doesn’t want to play games anymore. That sounds wonderful, but among certain shoppers, it’s the equivalent of grabbing the ball and taking it home. No more games, no more fun-and not much reason to visit JC Penney on a regular basis anymore. If, for the most part, a store’s prices are going to remain the same tomorrow, and next week, and the month after that, there’s not much incentive to browse the aisles for special deals today.52 A Forbes columnist concurred, â€Å"By taking away the weekly sales customers loved, Johnson abandoned his core JCP shopping enthusiasts. In effect, signaling to the core JCP enthusiastsshoppers who have sustained J.C. Penney through its years of retail muddling, that they no longer mattered. He confused them, and he pissed them off.†53 The Motley Fool sarcastically  quipped, â€Å"The silver lining in J.C. Penney’s awful report is that Sears [struggling with its own dismal results] has someone it can laugh at now.†54 Macy’s CFO Karen Hoguet was crowing that her company was benefiting from J.C. Penney’s missteps, reporting that sales in Macy’s stores that shared a mall with J.C. Penney were up significantly since the changes.55 And J.C. Penney’s apparel suppliers were becoming anxious, as their sales dropped precipitously, some as much as 70% over the prior year. One prominent supplier indicated that he was increasing his business with Kohl’s to make up for the shortfalls at J.C. Penney.56 These developments were sobering for Johnson yet he remained unfazed, â€Å"It’s been tougher than we anticipated†¦You know, we expected to be down. We are down a little more than we thought, but not enough to change the strategy†¦We’re treating this company as a startup†¦We’re inventing a whole new model to do business†¦It is a one year transition that’s part of a multi-year transformation. But once we get to one year of de-promoting or repurchasing our integrity, I fully expect us to grow. And so we’ve just got to get through that year. And we’ll get through it.†57 Speaking at Fortune magazine’s Brainstorm Tech conference in July, Johnson reiterated his support for the new pricing strategy, claiming that his board was â€Å"totally supportive†. When asked if he had a contingency plan whereby the company would revert back to high/low pricing, Johnson swore it was not in the cards, â€Å"It won’t happen while I’m here because I know it’s not the right thing to do. And I know this is what connects completely with our own unique heritage. And every longstanding company has a DNA in its core that  typically goes back to its founder. And when you reconnect with that, that’s when good things happen. That’s what Wal-Mart has had to do. And it’s really led to great success. That’s what Apple had to do when Steve came back. That’s what we’re going to do.†58 Making Some Adjustments As J.C. Penney management tried to decipher the disappointing results, much of the blame was put on the marketing execution and on customers’ stubborn reliance on price promotions. Mike Kramer, J.C. Penney’s new chief operating officer expressed his frustration, â€Å"Coupons, that drug. We did not realize how deep some of our customers were into this. . . . We have got to wean them off this and educate our consumers.†59 Johnson blamed the marketing execution, claiming that it failed to clearly communicate the new pricing strategy, â€Å"Our execution wasn’t what we needed. Our pricing is kind of confusing. Our marketing kind of overreached [Now] the most important thing is to educate consumers on the price changes and make sure the core customer understands J.C. Penney still has products they love, at exceptional value, every day.†60 Francis took the fall for the poor earnings, abruptly leaving the company a mere eight months after he started as pr esident. Following Francis’ departure, Johnson took responsibility for marketing and merchandising, believing that customers just didn’t understand the story behind â€Å"Fair and Square.† He tweaked the marketing plan, adding five additional â€Å"Best Price Fridays† to the calendar, including the important Fridays anchoring Memorial Day Weekend and Black Friday. The advertising creative was changed to incorporate a harder-hitting â€Å"Do the Math† positioning (See Exhibit 13 for an example). In June, J.C. Penney reintroduced the â€Å"S† word â€Å"sale† into its advertising to help clarify that its Best Price Friday deals actually extended through the weekend until all inventory was sold. Under pressure, Johnson speculated what his old mentor, Steve Jobs, who passed away in October 2011, would have advised, â€Å"I think Steve’s advice would be don’t worry about what others say. Trust your instincts. Do the right thing†¦Stay the course. But he would also say the essence is in the simplicity. And so he would have liked where we are going on pricing, but he would have said ‘You’ve got to clean it up. You’ve got to be more direct’.†61 Johnson buckled down, â€Å"What you can’t do is chicken out.  If you had looked at the data on the Genius Bar after a year and a half, we should have taken it out of the store. But it was something I believed in with every bone in my body.†62 He continued, â€Å"The world moves by innovators and innovators have to have the courage to imagine something that hasn’t been done before and the conviction to see it through†¦It is really hard. It takes a lot of courage. You’ve got to be able to have a few arrows shot in your back.