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Eureka Forbes

  1. 1. 1INTRODUCTIONEureka Forbes Limited (EFL) is the leader in domestic and industrial water purification multi-product, multi-channel corporation-part of the Shapoorji Pallonji Group. Incepted in 1982, wehave put 28 years of consolidated efforts to become the undisputed leaders in domestic andindustrial Water Purification Systems, Vacuum Cleaners, Air Purifiers & Security Solutions.Being Asia‘s largest direct sales organization, our force of 7000 direct personnel touches 1.5million homes. This is one of the largest networks catering to more than 131 cities and 398 townsacross the country and also have a 10,000 strong dealer sales network and over 58 distributorstrong Industrial Sales Network.Dedicated to the cause of providing healthier living, today, The company have successfullyestablished ourselves as a business super-brand and dedicated team works around the clock tomake your lives healthier and more secure! The company has strive to provide the best after salesservice and to achieve the same we have over 1500 service centers and as many as 4500company trained technicians who visit over 20,000 Indian kitchens daily!EFL is the Leader in domestic and industrial Water Purification Systems, VacuumCleaners, and Air Purifiers & Security Solutions. EFL is the Pioneers in Direct selling - Asia‘sLargest Direct Sales Organization.EFL‘s mission is To Build sustainable relationship with customers as their •Friend for life‘ bysatisfying their evolving health, hygiene and life style need through.The Aquaguard brand owes its success to Eurochamps (Direct Selling representatives of EurekaForbes), who pioneered the Direct Selling concept in India. Today, over 105 laboratories acrossthe world certify Aquaguard.
  2. 2. 2Eureka Forbes –the StartEureka Forbes followed the globally `tried and tested direct selling route for marketing itsproducts in India, thus becoming one of the first direct selling companies in India. Vacuumcleaners and water purifiers were rather new concepts for Indian consumers, who had till thenfollowed only the traditional methods of cleaning and filtering. Therefore, Eureka Forbes had tofirst establish the concept of vacuum cleaners and water purifiers in India before it could sell`Eureka as a brand.The company believed that its core strength was its people. It employed dynamic, highlymotivated individuals, called `Eurochamps, who projected the image of `The friendly man fromEureka Forbes. Thus, for the average Indian consumer, Eureka Forbes became synonymous withthe smartly dressed salesman who came to their houses and cleaned up things in a jiffy orshowed how air/water purifiers were indispensable. Eurochamps initially targeted the metros butsoon began visiting smaller cities and towns also.Though the company posted profits initially, it suffered a setback in 1992-93, when profitsdeclined by 50% in comparison to the previous year. The following year, the company even hadto post its first-ever loss of Rs. 42.5 mn. However, gradually the companys products gainedacceptance in Indian markets and company sales picked up. The company began advertisingacross various media primarily to familiarize its target segment, housewives, with its productsand introduce it to its salesforce. These advertisements showed helpful salespersons who solvedthe problems of housewives. Television commercials typically featured models who appeared`friendly and trustworthy. The company also used actors from popular Hindi TV serials, such asNitish Bhardwaj and Amar Upadhyay, to enhance the friendly and trustworthy image of itssalespersons.
  3. 3. 3PRODUCTS OF EUREKA FORBESHOME PRODUCTS:Vacuum CleanersWater PurifiersAir PurifiersSecurity SystemsINSTITUTIONAL PRODUCTS:Institutional Water Purifiers:- the company has 16 types ofinstitutional water purifiersInstitutional Vacuum Cleaners:- the company has over 100 typesof institutional1. Water Purifiers:According to their catalogue, theyhave over 20 water purifiers ranging from Rs.2.000 to Rs.25,000.Their range of products treats the water with varying levels oftechnology. The main difference is that the expensive systemslike the Integra Hi-Life have larger water production capacity per hour. more waterstorage capacity, and use the Reverse Osmosis Technology (RO) to treat the water.Without getting too scientific, Reverse Osmosis water purifiers use a thick membrane toprovide a barrier for solute materials. All particles such as bacteria and viruses arestopped by the membrane while pure water is allowed to go through.types of water purifier‘s available:• Aquaguard Sensa• Aquaguard Total• Aquaguard Integra7• Aquaguard Nova• Aqua SureMarket Segmentation
  4. 4. 4Market segmentation can be conducted using a number of approaches including demographic,geographic, attitudinal, psychographic, and behavioral.Geographic VariablesRegional: Eureka Forbes has branches in almost all the metropolitan cities and it isavailable almost all over the country.Population density: It is targeted to Urban, Suburban and rural area in India.Demographic SegmentationAge: Eureka is targeted to different age groups like young and middle and old age groupas water is a necessity for all age groups.Gender: Eureka Forbes is targeted to both male and female.Income: Targeted to middle and high income groups of people.Occupation: It is targeted to all groups of occupation.Religion: It is targeted to all kind of religious people.Psychographic segmentationLifestyle – different people have different lifestyle patterns and our behaviour may change as wepass through different stages of life. Water Filter belongs to a better people with better lifestyle,hygiene and health conscious people.Behavioral segmentationBenefits sought :Eureka Forbes water has created an better image to the consumersthrough its quality and better serviceProduct usage: Eureka Forbes service is open to all type of customers.TargetingEureka Forbes in India has carved a niche as the leading company for water purifiers. RO is oneof the most effective processes of purifying water with high TDS content. Eureka Forbes is
  5. 5. 5setting up alternative and new retail channels to increase the penetration of water purificationdevices. Eureka Forbes have a range of non power using products under the Aqua sure brandwhich we are promoting through the new channels set up by the retail division. The purpose is totarget 60 million households in urban and rural residential areas which have never used waterpurifiers.PositioningEureka Forbes has positioned itself as a cost effective, customer centric organization servicingthe market need for purified water. It will leverage its competitive edge to achieve the desiredpositioning. Its competitive advantage is the ability to generate revenue streams for sellers of theproduct; this is virtue of network marketing system.Selling strategies1. Direct Selling- Door-to-Door SellingEureka Forbes has an approach to sales that is well-worn in the West but is not socommon in India. Unlike Procter & Gamble, which relies on closet-size, mom-and-pop stores tosell its products, Eureka Forbes cuts out the middleman and instead uses a team of youngsalespeople to give in-house product demonstrations and convince consumers of a need that theydidnt know they had. In its early days the company only sold vacuum cleaners. It has managedto persuade Indians to stop boiling their otherwise undrinkable tap water and instead use a now-ubiquitous water purifier better known as "Aquaguard".2. Product SegmentationEureka Forbes sells different water-purifiers on the basis of classifying their utility and priceaffordability. The water purifiers are classified as follows: AQUAGUARD-ECONOMY AQUAGUARD- TOTAL PROTECTION AQUAGUARD-SPECIAL USAGES AQUAGUARD- DIRECT ONE3. Making and Growing Relationships- An Irreplaceable Commodity
  6. 6. 6Whether people end up buying Aquaguard from a giant store or a door-to-door salesman, EFL‘screw tries to stay close to the customers. After each sale a Eureka Forbes plumber installs thewater purifier. Service technicians conduct periodic maintenance.Eureka Forbes Vacuum CleanerEureka Forbes (EFL) has come a long way. From being famous (orinfamous) for Pioneering the direct selling in India. The way EurekaForbes has pitched in to the market with its wide range of products hasallowed the users to select from the extensive choices available accordingto their preferences. Eureka Forbes is a joint venture between Forbes(India) and Electrolux from Sweden. Eureka Forbes first launched theVacuum cleaners in India.SegmentationGeographic VariablesRegional: Eureka Forbes has branches in almost all the metropolitan cities and it isavailable almost all over the country.Population density: It is targeted to Urban, Suburban and rural area in India.Demographic SegmentationAge: Eureka is targeted to age groups like middle and old age group as theyGender: Eureka Forbes is targeted to both male and female.Income: Targeted to middle and high income groups of people.Religion: It is targeted to all kind of religious people.Psychographic segmentationEureka Forbes had positioned their product as a prestigious product its of self esteem to usevacuum cleaner to clean the floor compared to the traditional methods. They had strike theattitude and perception of their people with their successful strategy.Behavioral segmentation
  7. 7. 7Benefits sought: Eureka Forbes Vacuum cleaner has created an better image to theconsumers through its quality and better service.Product usage: Eureka Forbes Vacuum cleaner service is open to all type of customers.TargetingThe objective behind the move is to offer complete cleaning solutions at value-for-money pricingstrategy and develop the specialized cleaning chemical market. . Aqua guard water purifiertargeted at the top of SEC households, this brand has effectively positioned itself as a one stopshop for pure water. This brand connects very well with the concern of mothers about the purityof the water at home. The route adopted was not the conventional one of distribution, supportedby advertising. Instead the company created ‗the friendly man from Eureka Forbes‘ and sent himto homes to fight dirt and germs.POSITIONING:The way Eureka Forbes has pitched in to the market with its wide range of products has allowedthe users to select from the extensive choices available according to their preferences. Two majorcategories in Eureka Forbes were studied, and it was amazing to see the number of sub-productsunder them. Each had distinct features varying from each other in terms of price, function, usage,etc. In this way, Eureka Forbes has been able to position themselves according to the usersneeds, whatever it may be- price, style, functions and so on. Multipurpose Daily Use VacuumCleaner, Suction & Blower Functions, Shoulder Strap were designed for easy usage and in aconvenient hand held position. In such ways, each product is positioned with its exclusivebenefits in the minds of the customers.Strategies Adopted by Eureka Forbes Vacuum Cleaner1. Low interest rate: Because of the low interest and since the product benefits needs to bedemonstrated to the customers, conventional distribution was not viable. Hence EFL chose theless travelled Direct Selling route.2. Professional Sales ApproachThe Eureka Forbes sales man was called Euro champ. It was a tough job for these
  8. 8. 8Salesmen who had to go through the "cold calls" to get a sale. At one point of time,Because of the aggressive nature of these sales persons, people became scared even to listen tothese sales persons.1. Eureka Forbes has also tried to position their sales persons as problem solvers rather thansales officers. The campaigns tried to build the image of a Euro champ as a Friend ratherthan one that is after the money.2. Benefit Positioning As seen in the above segment, Eureka Forbes has introduced a newproduct with added benefits at regular intervals in the market. Each product comes with aspecific benefit, apart from the normal features. For e.g.: FORBES products are for Dailycleaning purpose and EUROCLEAN are for deep cleaning purpose.Air PurifiersIn addition to the Water Purifiers and the Vacuum Cleaners. Eureka Forbesalso provides Comprehensive Air Purification System to clean indoor air of allcommon pollutants, creating a clean, healthy & pleasant environment. EurekaForbes offers its products through dealers and institutional sales network.According to their catalogue, they have over 2 Air purifiers ranging fromRs.6400 to Rs.9.900. Their range of products treats the Indoor Air withvarying levels of technology. The main difference is that the expensivesystems like the Euro Air Genious have the ability to gauge the level and anykind of pollution in the house before purifying it.Security SolutionsEurovigil from Eureka Forbes provides complete safety for living & business.Solutions customized for homes, institutions & corporates, each solution fromEurovigil is tailor-made for unique requirement. An array of products - intrusiondetection, access control, surveillance & (ire detection. the Eurovigil solutions arestate-of-the-art security solutions providing total safety. The strategic tie-ups withworld‘s leading companies in security solutions like Notifier, Honeywell, Bosch andmany others make the Eurovigil systems the ideal solution for homes and business.
  9. 9. 9Security Solutions from Eureka Forbes include 24-hour door watch systems that enable people to see andspeak to their visitors, before granting them access to their your homes.EUREKA FORBES - SECURITY SOLUTIONSAccording to their catalogue, they have over 9 Security Solutions. The products are as follows:I. Video Door Phone2. I-See3. I-Link BlOO4. I-Link BW 2005. H 1006. HW 2007. OMNE 4008. VISTA 20P9. LYNX REN
  10. 10. 10CORPORATE SOCIAL RESPONSIBILITYTo be successful in this competitive business world, balance sheets and growth rates are no more the onlyparameters to be considered upon. Days have changed when Customers brought money and boughtproducts. Of course, provided the amount of online facilities available, purchase can be made at any timethrough any mode. But that is not the crux of this discussion. This is the age where people have startedseeing companies and organizations with a much broader vision. The service they provide to the societyand humanity has become a vital factor of the company‘s brand image. In a word, it is the popular word―CORPORATE SOCIAL RESPONSIBILTY‖. Eureka Forbes has been instrumental in performingvarious social activities which has embedded a good image of it in the customers‘ hearts. A few of themany CSR activities are as follows:1) Opening of Nana Nani parks for Aged persons2)Cleanliness & Hygiene campaigns launched in association with reputed NGO‘s3)Facilitates Pollution watch information4)Safe drinking water to Earth Quake victims in Bhuj5)Aids to Cyclone victims in Andhra Pradesh6)Hosts various religious festivals7)It does not matter in to what activity they are catering in to; ultimately they have created a good willand an image of trust in the mind & hearts of the customers.METHODS OF SELLINGSTRATEGIES ADOPTED THAT HAVE MADE EUREKA FORBES A POPULAR BRANDNAMETELEMARKETINGSALES FROMINTERNETMAIL ORDERSALELARGESCALE FIXEDSHOPRETAILERWHOLESALERANDRETAILERDIRECTSELLINGMARKETINTERMEDIARIES
  11. 11. 11DIRECT SELLING:EFL was the first to introduce water purifiers and vacuum systems into the Indian homes. Asthese products were unknown to the Indian market, therefore advertising campaigns wereimpossible. Hence EFL chose the less traveled direct selling route. Direct method is a methodthat aims at establishing a direct connection with the potential customers and cultivates a lastingrelationship. EFL was the first company to venture into the same and now is Asia‘s largest directselling organization.Direct Marketing is a method which helps to create a direct connection with thepotential consumer to obtain an immediate response and cultivate lasting consumerrelationship. The motto of direct marketing is “MAKING THINGS HAPPEN!”Electrolux brought the Eureka brand to India in 1981 through Eureka Forbes, a joint venture withFGL. While Electrolux held 40% of the stake, the rest 60% was held by FGL. FGL was a 60:40joint venture between the construction major Shapoorji Pallonji Group and one of Indias largestbusiness houses, the Tata Group of companies. Eureka Forbes launched its first range of vacuumcleaners, `Euroclean, in 1982, and established its direct sales division in the same year. Thecompanys subsidiary for manufacturing water purifiers, Aquamall Water Solutions Ltd., wasalso established in 1982.The company began operations from a single office in Delhi, with just 10 field representatives.Two years later, it launched the Aquaguard range of water purifiers. As business started pickingup, Eureka Forbes established its dealer sales division in 1985, its industrial sales division in1986, and its exports division in 1989. During the mid-1990s, the company diversified intoproducts like mixers and irons. However, as the quality of these products was reportedly verypoor, Eureka Forbes had to discontinue them. In 1994, the company entered the air purifierssegment. In 1995, Eureka Forbes launched the `Tornado range of vacuum cleaners and the`Aquaflo range of water purifiers, exclusively for marketing through the dealer route.In 1997, Eureka Forbes diversified into electronic security solutions under the brand name `Eurovigil. The company established manufacturing facilities at Bhimtal (Uttar Pradesh, nowUttaranchal), Hyderabad (Andhra Pradesh) and Banglore (Karnataka). Eureka Forbes also had aResearch and Development center at Bangalore.
  12. 12. 12Advantages of Direct Selling Easy, Convenient and Private Goods at lower prices Close relation between Company & Consumer It saves the valuable time Provides more choiceDisadvantages of Direct Marketing Cannot see and inspect the product Chances of misleading and Deceiving The scope of expansion is limited. Irritation to the consumer Higher per person cost.AFTER SALES SERVICEThe companys direct marketing thrust did not end with the conversion of orders into sales.Eureka Forbes started a customer care network that took care of after-sales services offered bythe company. The companys customer service network comprised over 400 CRC (CustomerResponse Centers), covering over 98 towns with more than 4000 sales personnel working underit. These centers offered a plethora of options to its customers in order to enhance theirsatisfaction with their purchases. Some of these options were:• An `Annual Maintenance Contract, which the customer could enter into after the warrantyperiod was over.• Free maintenance for its equipment at medical establishments on a yearly basis—This schemewas called `Operation Red Zone.
  13. 13. 13• A mobile service van facility for New Delhi and Mumbai customers.• `Water Labs for customers who wanted to reassure themselves about the quality of waterpurified by Aquaguard. Representatives from these labs visited customer premises, collectedwater samples, and provided test reports to the concerned customer. This service was available inMumbai, New Delhi, Kolkata Chennai, Bangalore and Ahmedabad.• The `Euroclean home contest gave owners of Euroclean vacuum cleaners the opportunity toentertain celebrities in their homes, on the basis of a cleanliness contest conducted by thecompany. The `Gift a Smile scheme was introduced to encourage sales personnel to keep inconstant touch with the customers.• In an attempt to forge closer ties with its customers and push its new products, Eureka Forbeslaunched a scheme that gave existing customers the option of getting a new water purifier againsttheir old model at a discounted price.• Customers in New Delhi, Chennai and Bangalore could access the central CRC round-the-clock. Service call-back was guaranteed within 48 hours, since most service personnel wereaccessible through pagersIMPROVING DIRECT SELLINGEnhancing business efficiency: To enhance the efficiency of its direct marketing efforts,Eureka Forbes implemented various e-biz strategies called B2E (Business to Employee)exercises.Periodic reviewTo reduce the time between the occurrence of an event and the receipt ofinformation regarding that event, Eureka Forbes asked its salespeople to report saleslevels to the head office on a weekly instead of a monthly basis. On the basis of thisinformation, the head office was able to reduce inventories accordingly. To further fine-tune its salesforces performance, the company began ranking salesmen according to theirperformance. This information was put on the Internet for other sales representatives tosee and improve their own performances.Providing information to suppliers: Eureka Forbes regularly provided its suppliers withinformation that helped them better plan their production. The company also provided
  14. 14. 14suppliers with their own e-mail identities. An online model was built through whichEureka Forbes could directly interact with customers over the Internet. In addition, thecompany utilized the Internet to enable its six water-testing labs across the country to bein touch with each other.Online training sessions: To reduce the costs associated with training new salesrepresentatives, the companys product managers held online training sessions. Thesemanagers conducted chat sessions with new sales representatives over the companysnetwork. The transcripts of the chat were also made available in a printed form later on.No more direct marketingIn 1999, Eureka Forbes Ltd. (Eureka Forbes), the leading vacuum cleaner and water/air purifierequipment company, announced a major policy change that came as a surprise to the Indiancorporate world. The company, regarded as the pioneer of direct marketing in India, wasplanning to focus more on the retailing business in the future. Commenting on this decision. Thismov was in accordance with the companys plans to increase the visibility of its products. Thecompany planned to make its products available in retail outlets through its dealer network,spread across 2,600 dealers. With this move, Eureka Forbes also planned to increase the salesrevenue generated by the retail division. Eureka Forbes Senior Vice-President, Sales andMarketing, Palekar, explained, "While the dealer channel contributes 10% to the overall salesturnover of the company, the direct sales route contributes 75%."The same year, in another major departure from the business practices adopted since it beganbusiness in India, Eureka Forbes announced its decision to enter the bottled water market. Thecompany wanted to position itself as a one-stop shop for products related to providing pure
  15. 15. 15water. Industry watchers questioned this decision, observing that most manufacturers of bottledwater were regional players and very few brands had an all-India presence. Parles Bislerimineral water brand, the only national level player at that point of time, was expected to posestiff competition to Eureka Forbes.The fact that these developments came at a time when the partners in the Eureka Forbes jointventure, Forbes Gokak Ltd. (FGL) and Electrolux AB (Electrolux), were engaged in a bitterboardroom battle, added to the air of uncertainty surrounding the company. The tiff had startedin early 1999, when Electrolux announced its decision to walk out of the direct sales businessworld over and, consequently, sell off its 40% stake in Eureka Forbes.Company observers stated that Eureka Forbes could find it difficult to succeed in the retailbusiness without Electroluxs financial support and marketing expertise. The decisions to shiftfrom direct selling to retailing and to enter the bottled water segment were being eyed withsuspicion by analysts. Commenting on these decisions, analysts said that since Eureka Forbeswas a relatively new player in the retail business and did not have much experience, it could havea tough future ahead.Marketing MixPRODUCTa) Easily available nation wide.b) Easy to handle.c) Multiple products launched for each product type.PROMOTIONa) Active subscription immediately,b) Right time installation of products.
  16. 16. 16c) Properly repair services against paid AMC‘s.PRICEa) Product price range divided into four segments to target different audiences.b) Low cost of maintenance and consumable.c) Best prices offered when compared to other competitors.PLACEa) Urban educated India that cares for their family.b) Areas prone to diseases.c) Strategically chosen locations for