Casas bahia

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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
  • Casas bahia

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

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