Casas Bahia

Prahalad approvingly cites the case of Casas Bahia, which has become a large retailer of household appliances in Brazil by “converting the BOP into consumers. . . . Casas Bahia carries and sells top-quality brands: Sony, Toshiba, JVC, and Brastemp (Whirlpool). There is a misconception that because customers are poor they do not desire quality products.”25 In his discussion of Casas Bahia, Prahalad defines three economic segments that are considered to be the bottom of the pyramid, implying a poverty line of R$2,000, equivalent to $2,000 at PPP per family per month.26 However, later on the same page, he says that that the Casas Bahia customers individually have an “average monthly income twice the minimum wage (R$400),” which is equivalent to $800 per month. Either way, Casas Bahia customers (individually or as a family) fall well above the $2/day poverty line. Casas Bahia is a big, profitable retailer but has little to do with the BOP proposition if the poverty line is defined appropriately. The erroneous belief that Casas Bahia customers fall below the poverty line has helped to create the BOP fallacy that poor people buy top-quality products.

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