Do The Math Case Summary

The first implicit assumption of the strategy is that a substantial proportion of JCP customer base go through and dislike the painful process of waiting for coupons and clearance to get the low price deals, knowing that about 72% of purchased items were bought on sales above 50%. Obviously this was not the case, as many shoppers enjoyed hunting for deals either by using the coupons they used to receive or by exploring stores for interesting deals. As such, after the introduction of the EDLP, customers probably did not feel compelled enough to visit stores. Even though JCP tried to educate customers through the advertising campaign that ask customers to “Do the Math”, the market seems to prefer the old coupons and discounts as their perceived value of the new price structure seemed lower. …show more content…
He considered that their customers were capable of figuring out the right prices of the products they are looking for, and this would make them perceive the merchandise offered at the EDLP as a good bargain. The assumption may be wrong and more investigation is required to understand the ability and willingness of customer to uncover the right price. I suppose that JCP customers don’t have enough time and maybe skills to do so, and because a substantial proportion of their visitors are traditional family shoppers as well as relatively old shoppers. Thus, the perceived value of a merchandise that used to cost a certain amount has less value because of the EDLP pricing, knowing that price is very often used as a proxy for quality and therefore value. As a consequence, clearance and sale used to represent good deals since consumers used to buy high value items at a low price, which is not the case anymore with the