Casas Bahia - Marketing to the Poor

The lower income groups represented significant purchasing power in Brazil's economic system (Refer Exhibit II for income distribution in Brazil). The high end product companies often did not target the lower income groups since they did not make enough money to consume their products.

Though the huge low-income population did not have enough money, it wanted all kinds of basic consumer goods like refrigerator, television and washing machines and the only way of acquiring these goods was through credit. There were usually two sources for the working class to obtain credit - financial institutions like banks and private money lending agencies...

Despite its reputation as the poor man's shopping paradise, Casas Bahia came under lot of criticism that it exploited the poor in the name of selling them branded products in easy instalments. Some analysts felt that Casas Bahia targeted the poor working class people by taking advantage of their vulnerabilities and yearning for expensive consumer goods. They observed that meeting basic needs was always the top priority of poor anywhere in the world. But, Casas Bahia was making Brazil's poor to go for luxury items like branded consumer electronics by compromising on basic needs...