If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and

value-conscious consumers, a whole new world of opportunity will open up By C.K.Prahalad

Casas Bahia
Prepared by: Gurleen Awal Neeraj Nagpal Nidhi Manchanda Nidhi Verma

Introduction
Casas Bahia is the largest retail chain in Brazil, selling electronics, furniture and appliances. The company owns more than 500 stores across the country, employs 60,000 people, and serves more than 31 million customers. Annual revenues of 13 billion real (US $7 billion). The number of stores kept on increasing at an average of 20 per year. The company has developed an innovative financing model to service the lower-income segment of Brazils population.

Chronology
1958: Samuel Klein purchases his first Casas Bahia
store.

1970 to 1990:
Purchase of a stake in a consumer-loan company enables Klein to self-finance his stores. Purchase of a furniture manufacturer gives the chain a reliable source of merchandise. The Casas Bahia chain has grown to 56 stores with two million registered customers. A 100-store chain, Casas Bahia brings in $874 million in sales.

 1996 to 2004:
With 250 stores in six states, Casas Bahia has become Brazil's largest nonfood retailer. The chain's too-rapid expansion results in its first recorded loss, about $7 million. A return to profitability and a sale of debentures restore the chain to financial health. The 400-odd Casas Bahia stores have estimated sales of BRL 9 billion (about $3 billion).

 2005 to 2010: Launched its online store, pressed by an increasing number of online sales in Brazil. More than 500 stores in eleven states

Unique Features Of Business Model

Credit Financing SPC: - Scoring Process. - Personal Rapport (creditworthiness). - Centralization Of Information. - Records Based On Personality Traits. Carne System (the passbook). Art Of Vender (selling). Informal Way Of Treating Customers.

Reasons For Casas Bahias Success

Focused on untapped market Innovative installments sales schemes Mass marketing Companys low default rate Cross selling of latest products Changing the finance terms and timely special promotion Strategic location of stores

Marketing to the poor

Targeting BoP Easy & Flexible credit schemes Strong customer relationship Strategic store locations Competitive pricing of renowned branded products Unemployment Insurance scheme Aggressive advertising through Television etc. Cont.

 Yellow preferred-Client card to the punctual payers Revamping its pricing strategy Testimonials of satisfied clients

Criticism
Play with Peoples Psychology

Win-Win situation

BoP Market
Bottom Of the Pyramid (BOP) customers are the poorest section of the society. According to the World Bank, about 2.8 billion (which is about 50%) of the Worlds total population has an income lesser than or equal to $2 per day. With stagnant growth in the developed market, companies are eyeing on the bottom of the pyramid consumers, whose disposable income multiplied billion times indicates a substantial purchasing power.

Importance of MNCs in BoP markets

Multinationals are now focusing on designing products to cater to the needs and ability of the BOP customers. They have realized that this segment is a highly profitable one and worth considering. The sachet concept, refilling options and free offers provide economic purchase options to the BOP consumers. Multinationals followed all such methods to woe the BOP consumers. Companies have continually carried market research to comprehend the gap between spending pattern, needs and requirements of this segment.

These companies are designing new price schemes, packaging schemes and others on the existing brands and products. This is to retain the brand equity of the existing product. The strategies are mainly applied in providing a low cost product with high quality. Also bottom of the pyramid marketers aims at raising the standards of living of the consumer. The growth of micro finance industry is the indicative of the fact that newer schemes and offerings are being designed now-a-days to suit the requisition of the BOP customers.

Current status
- Amount of stores in Brazil: 565 stores. - Operations: 10 States of Brazil, in a ray of 1700 km far from So Paulo. - Invoicing Foreseen for the year of 2007: R$ 12.5 billion of Real. - Amount of store in the city of So Paulo: 94 stores. - Biggest store area (Super Casas Bahia): 151600 square meters in the Anhembi (So Paulo). - Net profits: R$ 250 million of Real. - Amount of employees: 57518 employees, being 16800 salesmen. - Amount of customers registered in the system of Casas Bahia: 26.3 million.

- Profile of the customers: 50% pay with stub-book and 40% with credit cards. - Proper Fleet of distribution: 2254 trucks. - Average Amount of monthly deliveries: 908000 deliveries per month. - Products more traded in 2007 (January to November): 918,000 furniture for kitchens 657,000 cellular telephones 500,000 furniture for room 410,000 beds 345000 Television Sets Source:www.shvoong.com

4Ps of Casas Bahia

Product
Durable items like furniture, home appliances etc

Place
Own Retail stores

Price
Competitive pricing

Promotion
Television advertisement. , Word-of-mouth, Cross selling

Recommendations
Diversification in their product-line.

Micro-financing facilities.

THANKYOU