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  • His terms were comparatively generous Doing business with poor means more riskRole of sales personnel – selling a product which fits into budgetHe refused to be labelled – no compromise with the quality

Transcript

  • 1. Industry - Retail, Location - Brazil, Head Quarter- Sao Paulo
    Casas Bahia
    Slogan-Total Dedication to You
  • 2. Introduction – Casas Bahia
    • Largest non-food retail chain in Brazil
    • 3. Promoting luxury goods among lower income groups
    • 4. Innovative installment scheme – unlocked purchasing power
    • 5. Services providing :
    • 6. Credit
    • 7. Delivery &
    • 8. Installation of goods
  • Background
    • 1952 – Samuel started earning by selling blankets, bed linen and bath towels to migrants (directional marketing)
    • 9. Samuel Klein came up with an idea of selling to BoP (1958)
    • 10. Opened his first clothing and furniture store and named it -CasasBahia (Bahia houses)
    • 11. Empire grew further in 1994 (Real plan by Brazilian Govt.)
    • 12. Real plan :
    • 13. Boost to purchasing power of poor
    • 14. Helped Casas Bahia store to spread his business
  • Facts
    • Sales increased by 500% in six months (Real Plan)
    • 15. Stores kept on increasing at an average of 20 p.a. by 2002
    • 16. 2002 – CB recorded annual sales worth R$ 410
    • 17. 2004 – sales reached R$ 9b (50% growth as compared to 2003)
    • 18. 2005:
    • 19. 30,000 employees
    • 20. 800 credit analysts
    • 21. 394 stores in eight states
    • 22. 11 million customers
  • Q & A
    Q. Unique features of Business Model and Reasons of Success ?
    A. Credit financing - core of CB Business Model
    • Service of credit protection – credit bureau of Brazil->credit history customer
    • 23. CB - Credit Analysts evaluate customers
    • 24. Series of Questions are being asked to assess clients’ creditworthiness
    • 25. Centralized customer information
    • 26. Concept of passbook – Cross selling
    • 27. Comparatively low Default rate
  • Marketing Strategy
    Strategies
    • Strong relationships
    • 28. Area specific
    • 29. Target - lower income group
    • 30. Visual Merchandising
    • 31. Credit financing
    • 32. Aggressive Marketing
    • 33. CB’s Yellow Card (automatic credit, symbol of status among working class)
    • 34. Identified the desire of luxury brands among the poor
    • 35. Pardoned debts of million customers
    • 36. Introduced “unemployment Insurance” (forgo first six installments)
  • Criticism leveled against Casas Bahia
    Critics say:
    • Exploiting the poor by selling the branded products
    • 37. CB was luring Brazil’s poor towards luxury items
    • 38. Playing with poor people’s psychology
    • 39. Prices of goods are being inflated
    • 40. Interest – free programmers were business tactics
    • 41. Squeezed money by hiking actual price of goods
  • Answer
    Casas Bahia’s view
    Samuel says:
    • His terms were comparatively generous
    • 42. Doing business with poor means more risk
    • 43. Role of sales personnel – selling a product which fits into budget
    • 44. He refused to be labeled as “low baller” – no compromise with the quality
    Analysts say:
    • CB kept consumer spending active during recession
    • 45. CB sets fine example for developing countries in terms of empowering poor
    • 46. Innovative credit financing schemes in developing countries
    • 47. To boost purchasing power and growth of economy
  • Casas Bahia- Sustaining Success
    • By 2010, more than 500 stores in eleven states
    • 48. More than 55,000 employees
    • 49. Revenue 2007 6Bn $
    • 50. Brazil’s top advertiser in 2005.
    • 51. Among 250 largest Retail companies in the world-Current Position 131
    • 52. 3062 trucks to stock the store and deliver the merchandise to the client
    • 53. Launched online store –Feb 2009 http://www.casasbahia.com.br
  • Continued..
    • More than 22 million active customers
    • 54. 80% of sales are from returning customers
    • 55. 3.5 Millions Transactions Per Hour
    • 56. An open platform helped the company avoid US $8 million cost of proprietary solution
  • Bottom of Pyramid
    The poor of India - source of innovation
    ITC-E-Choupal
    Bangladesh-Micro Credit Market
  • 57. Win -Win Situation
  • 58. Thank You
    Alok, Amit, Mandeep, Nikhil