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    Casas Bahia : Marketing To The Poor

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    sudipsaint
    Casas Bahia is the largest retail chain in Brazil founded in 1958. It serves low-income consumers by providing flexible credit options allowing customers to purchase electronics, appliances, and furniture. Casas Bahia analyzes customers' creditworthiness and income within one minute to determine financing. It maintains emotional relationships with customers to achieve low default rates. While critics argue Casas Bahia exploits the poor, others note it increases purchasing power and economic growth by making products accessible through innovative financing.

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    Casas Bahia : Marketing To The Poor

    Uploaded by

    sudipsaint
    35 views11 pages
    Casas Bahia is the largest retail chain in Brazil founded in 1958. It serves low-income consumers by providing flexible credit options allowing customers to purchase electronics, appliances, and furniture. Casas Bahia analyzes customers' creditworthiness and income within one minute to determine financing. It maintains emotional relationships with customers to achieve low default rates. While critics argue Casas Bahia exploits the poor, others note it increases purchasing power and economic growth by making products accessible through innovative financing.

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    Casas Bahia is the largest retail chain in Brazil founded in 1958. It serves low-income consumers by providing flexible credit options allowing customers to purchase electronics, appliances, and furniture. Casas Bahia analyzes customers' creditworthiness and income within one minute to determine financing. It maintains emotional relationships with customers to achieve low default rates. While critics argue Casas Bahia exploits the poor, others note it increases purchasing power and economic growth by making products accessible through innovative financing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    35 views11 pages

    Casas Bahia : Marketing To The Poor

    Uploaded by

    sudipsaint
    Casas Bahia is the largest retail chain in Brazil founded in 1958. It serves low-income consumers by providing flexible credit options allowing customers to purchase electronics, appliances, and furniture. Casas Bahia analyzes customers' creditworthiness and income within one minute to determine financing. It maintains emotional relationships with customers to achieve low default rates. While critics argue Casas Bahia exploits the poor, others note it increases purchasing power and economic growth by making products accessible through innovative financing.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    CASAS BAHIA

    …MARKETING TO THE POOR


    BACKGROUND OF THE COMPANY
    • Founded by Samuel Klein in 1958,it is the largest
    retail chain in Brazil which sells electronics,home
    appliances and furnitures.
    • Casas Bahia,named after home state Bahia,maintains
    the philosophy of “total dedication to you”,i.e. the
    customers.
    • As of January 2005,it has 30000 employees,800 call
    centres agents,394 stores in 8 states,11 million
    customers(approx),more than 7000 items to offer to
    its customers.
    SERVING THE URBAN POOR
    • They realized the hidden strength of the
    consumers in low income group, put together.
    • 70% of the Casas Bahia’s consumers has no
    regular income.
    • Developed a sustainable business model
    focussing entirely on consumers constituting
    lower-income group.
    • Provided flexible and easy credit to them.
    THE BUSINESS MODEL
    • Credit financing formed the core of Casas
    Bahia’s business model.
    • Prospective customers are to submit
    themselves to an SPC(Service of credit
    Protection)system of credit check.
    • If price of merchandise is more than $600 USD, then Casas
    Bahia uses their computer evaluation system to determine
    the credit limit based on total income, all done within 1
    minute
    • Credit analysts are trained to work with customers. If the
    computer evaluation system rejects a customer, they can ask
    the right questions to decide if the customer is sincere and
    able to make the necessary payments.
    • If customer is still rejected, analysts are trained to reject in a
    manner that ensures a long-lasting relationship with
    customers so that they will return when their circumstances
    improve.
    • They maintained the information of purchase history and
    credit score and even personality traits of every customer
    visiting their store for future reference.
    • Used later to evaluate credit worthiness of its
    clients,potential to purchase new items etc.
    • Salespeople at Casas Bahia develop a rapport with
    customers that guarantees an emotional endorsement to
    the payment plans.
    • By establishing an emotional relationship rather than
    asking for proof of income, Casa Bahia achieves very low
    default rates.
    • Casas Bahia is the 4th most recognized brand in Brazil and it has used
    its own brand as an endorser for new product categories. Casas Bahia
    advertises heavily and spends 3% of total revenues on advertising.
    • Main advertising venue is Television which reaches over 90% of all
    Brazilian households and conveys the emotional “dreams come true”
    proposition very effectively.
    • Advertising is simple and features everyday people talking about how
    they got their dream products at Casas Bahia
    • Pricing is based on capacity to pay,so the strategy of them is
    based upon- what can the customer afford and what payment
    schedule can be designed to fit that customer? Thus, “making
    their dreams come true.”
    • There is a misconception that because the customers are poor,
    they do not desire quality products—the only difference is that
    customers at the BOP can’t afford to pay immediately for these
    products.
    • Consumers at the BOP are brand-conscious but not
    necessarily product-conscious.
    CRITICISM
    • It exploited the poor by alluring them with
    branded products in easy Installment.
    • They took advantage of their vulnerabilities
    and yearning for expensive consumer goods.
    • They are forcing the poor to overlook their
    own basic needs.
    CONCLUSION
    • Casas Bahia kept consumer spending active even when Brazil
    economy was volatile.
    • Innovative credit financing schemes strategy were seen as a
    revolutionary step applicable in all developing countries in terms
    of increment of purchasing power of masses,growth of economy.
    • Consumers are aware they are paying high interest rates but do not
    feel that they are being taken advantage of for various reasons :
    • They don’t have any other options in terms of getting the financing.
    • Without the financing options, they and their friends would not have the
    opportunity to purchase TVs, fridges, and other appliances that they
    now see in each others’ homes.
    THANK YOU

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