INTRODUCTION

Eureka 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, we have put 28 years of consolidated efforts to become the undisputed leaders in domestic and industrial Water Purification Systems, Vacuum Cleaners, Air Purifiers & Security Solutions. Being Asia’s largest direct sales organization, our force of 7000 direct personnel touches 1.5 million homes. This is one of the largest networks catering to more than 131 cities and 398 towns across the country and also have a 10,000 strong dealer sales network and over 58 distributor strong Industrial Sales Network.

Dedicated to the cause of providing healthier living, today, The company have successfully established ourselves as a business super-brand and dedicated team works around the clock to make your lives healthier and more secure! The company has strive to provide the best after sales service and to achieve the same we have over 1500 service centers and as many as 4500 company trained technicians who visit over 20,000 Indian kitchens daily!

EFL is the Leader in domestic and industrial Water Purification Systems, Vacuum Cleaners, and Air Purifiers & Security Solutions. EFL is the Pioneers in Direct selling - Asia’s Largest Direct Sales Organization.

EFL’s mission is To Build sustainable relationship with customers as their •Friend for life’ by satisfying their evolving health, hygiene and life style need through.

The Aquaguard brand owes its success to Eurochamps (Direct Selling representatives of Eureka Forbes), who pioneered the Direct Selling concept in India. Today, over 105 laboratories across the world certify Aquaguard.

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Eureka Forbes –the Start

Eureka Forbes followed the globally `tried and tested' direct selling route for marketing its products in India, thus becoming one of the first direct selling companies in India. Vacuum cleaners and water purifiers were rather new concepts for Indian consumers, who had till then followed only the traditional methods of cleaning and filtering. Therefore, Eureka Forbes had to first 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, highly motivated individuals, called `Eurochamps', who projected the image of `The friendly man from Eureka Forbes'. Thus, for the average Indian consumer, Eureka Forbes became synonymous with the smartly dressed salesman who came to their houses and cleaned up things in a jiffy or showed how air/water purifiers were indispensable. Eurochamps initially targeted the metros but soon began visiting smaller cities and towns also.

Though the company posted profits initially, it suffered a setback in 1992-93, when profits declined by 50% in comparison to the previous year. The following year, the company even had to post its first-ever loss of Rs. 42.5 mn. However, gradually the company's products gained acceptance in Indian markets and company sales picked up. The company began advertising across various media primarily to familiarize its target segment, housewives, with its products and introduce it to its salesforce. These advertisements showed helpful salespersons who solved the problems of housewives. Television commercials typically featured models who appeared `friendly' and trustworthy. The company also used actors from popular Hindi TV serials, such as Nitish Bhardwaj and Amar Upadhyay, to enhance the friendly and trustworthy image of its salespersons.

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PRODUCTS OF EUREKA FORBES

HOME PRODUCTS:

Vacuum Cleaners

Water Purifiers

Air Purifiers

Security Systems

INSTITUTIONAL PRODUCTS:

Institutional Water Purifiers:- the company has 16 types of institutional water purifiers

Institutional Vacuum Cleaners:- the company has over 100 types of institutional

1. Water Purifiers: According to their catalogue, they

have over 20 water purifiers ranging from Rs.2.000 to Rs.25,000. Their range of products treats the water with varying levels of technology. The main difference is that the expensive systems like the Integra Hi-Life have larger water production capacity per hour. more water storage capacity, and use the Reverse Osmosis Technology (RO) to treat the water. Without getting too scientific, Reverse Osmosis water purifiers use a thick membrane to provide a barrier for solute materials. All particles such as bacteria and viruses are stopped 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 Sure

Market Segmentation

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Market segmentation can be conducted using a number of approaches including demographic,

geographic, attitudinal, psychographic, and behavioral.

Geographic Variables

Regional: Eureka Forbes has branches in almost all the metropolitan cities and it is

available almost all over the country.

Population density: It is targeted to Urban, Suburban and rural area in India.

Demographic Segmentation

Age: Eureka is targeted to different age groups like young and middle and old age group

as 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 segmentation

Lifestyle – different people have different lifestyle patterns and our behaviour may change as we

pass through different stages of life. Water Filter belongs to a better people with better lifestyle,

hygiene and health conscious people.

Behavioral segmentation

Benefits sought :Eureka Forbes water has created an better image to the consumers

through its quality and better service

Product usage: Eureka Forbes service is open to all type of customers.

Targeting

Eureka Forbes in India has carved a niche as the leading company for water purifiers. RO is one

of the most effective processes of purifying water with high TDS content. Eureka Forbes is

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setting up alternative and new retail channels to increase the penetration of water purification

devices. Eureka Forbes have a range of non power using products under the Aqua sure brand

which we are promoting through the new channels set up by the retail division. The purpose is to

target 60 million households in urban and rural residential areas which have never used water

purifiers.

Positioning

Eureka Forbes has positioned itself as a cost effective, customer centric organization servicing

the market need for purified water. It will leverage its competitive edge to achieve the desired

positioning. Its competitive advantage is the ability to generate revenue streams for sellers of the

product; this is virtue of network marketing system.

Selling strategies

1. Direct Selling- Door-to-Door Selling

Eureka Forbes has an approach to sales that is well-worn in the West but is not so

common in India. Unlike Procter & Gamble, which relies on closet-size, mom-and-pop stores to

sell its products, Eureka Forbes cuts out the middleman and instead uses a team of young

salespeople to give in-house product demonstrations and convince consumers of a need that they

didn't know they had. In its early days the company only sold vacuum cleaners. It has managed

to persuade Indians to stop boiling their otherwise undrinkable tap water and instead use a now-

ubiquitous water purifier better known as "Aquaguard".

2. Product Segmentation

Eureka Forbes sells different water-purifiers on the basis of classifying their utility and price

affordability. The water purifiers are classified as follows:

AQUAGUARD-ECONOMY

AQUAGUARD- TOTAL PROTECTION

AQUAGUARD-SPECIAL USAGES

AQUAGUARD- DIRECT ONE

3. Making and Growing Relationships- An Irreplaceable Commodity

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Whether people end up buying Aquaguard from a giant store or a door-to-door salesman, EFL’s

crew tries to stay close to the customers. After each sale a Eureka Forbes plumber installs the

water purifier. Service technicians conduct periodic maintenance.

Eureka Forbes Vacuum Cleaner

Eureka Forbes (EFL) has come a long way. From being famous (or

infamous) for Pioneering the direct selling in India. The way Eureka

Forbes has pitched in to the market with its wide range of products has

allowed the users to select from the extensive choices available according

to their preferences. Eureka Forbes is a joint venture between Forbes

(India) and Electrolux from Sweden. Eureka Forbes first launched the

Vacuum cleaners in India.

Segmentation

Geographic Variables

Regional: Eureka Forbes has branches in almost all the metropolitan cities and it is

available almost all over the country.

Population density: It is targeted to Urban, Suburban and rural area in India.

Demographic Segmentation

Age: Eureka is targeted to age groups like middle and old age group as they

Gender: 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 segmentation

Eureka Forbes had positioned their product as a prestigious product its of self esteem to use

vacuum cleaner to clean the floor compared to the traditional methods. They had strike the

attitude and perception of their people with their successful strategy.

 Behavioral segmentation

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Benefits sought: Eureka Forbes Vacuum cleaner has created an better image to the

consumers through its quality and better service.

Product usage: Eureka Forbes Vacuum cleaner service is open to all type of customers.

Targeting

The objective behind the move is to offer complete cleaning solutions at value-for-money pricing

strategy and develop the specialized cleaning chemical market. . Aqua guard water purifier

targeted at the top of SEC households, this brand has effectively positioned itself as a one stop

shop for pure water. This brand connects very well with the concern of mothers about the purity

of the water at home. The route adopted was not the conventional one of distribution, supported

by advertising. Instead the company created ‘the friendly man from Eureka Forbes’ and sent him

to homes to fight dirt and germs.

POSITIONING:

The way Eureka Forbes has pitched in to the market with its wide range of products has allowed

the users to select from the extensive choices available according to their preferences. Two major

categories in Eureka Forbes were studied, and it was amazing to see the number of sub-products

under 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 users

needs, whatever it may be- price, style, functions and so on. Multipurpose Daily Use Vacuum

Cleaner, Suction & Blower Functions, Shoulder Strap were designed for easy usage and in a

convenient hand held position. In such ways, each product is positioned with its exclusive

benefits in the minds of the customers.

Strategies Adopted by Eureka Forbes Vacuum Cleaner

1. Low interest rate: Because of the low interest and since the product benefits needs to be

demonstrated to the customers, conventional distribution was not viable. Hence EFL chose the

less travelled Direct Selling route.

2. Professional Sales Approach

The Eureka Forbes sales man was called Euro champ. It was a tough job for these

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Salesmen 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 to

these sales persons.

1. Eureka Forbes has also tried to position their sales persons as problem solvers rather than

sales officers. The campaigns tried to build the image of a Euro champ as a Friend rather

than one that is after the money.

2. Benefit Positioning As seen in the above segment, Eureka Forbes has introduced a new

product with added benefits at regular intervals in the market. Each product comes with a

specific benefit, apart from the normal features. For e.g.: FORBES products are for Daily

cleaning purpose and EUROCLEAN are for deep cleaning purpose.

Air Purifiers

In addition to the Water Purifiers and the Vacuum Cleaners. Eureka Forbes

also provides Comprehensive Air Purification System to clean indoor air of all

common pollutants, creating a clean, healthy & pleasant environment. Eureka

Forbes offers its products through dealers and institutional sales network.

According to their catalogue, they have over 2 Air purifiers ranging from

Rs.6400 to Rs.9.900. Their range of products treats the Indoor Air with

varying levels of technology. The main difference is that the expensive

systems like the Euro Air Genious have the ability to gauge the level and any

kind of pollution in the house before purifying it.

Security Solutions

Eurovigil from Eureka Forbes provides complete safety for living & business.

Solutions customized for homes, institutions & corporates, each solution from

Eurovigil is tailor-made for unique requirement. An array of products - intrusion

detection, access control, surveillance & (ire detection. the Eurovigil solutions are

state-of-the-art security solutions providing total safety. The strategic tie-ups with

world’s leading companies in security solutions like Notifier, Honeywell, Bosch and

many others make the Eurovigil systems the ideal solution for homes and business.

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Security Solutions from Eureka Forbes include 24-hour door watch systems that enable people to see and

speak to their visitors, before granting them access to their your homes.

EUREKA FORBES - SECURITY SOLUTIONS

According to their catalogue, they have over 9 Security Solutions. The products are as follows:

I. Video Door Phone

2. I-See

3. I-Link BlOO

4. I-Link BW 200

5. H 100

6. HW 200

7. OMNE 400

8. VISTA 20P

9. LYNX REN

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CORPORATE SOCIAL RESPONSIBILITY

To be successful in this competitive business world, balance sheets and growth rates are no more the only

parameters to be considered upon. Days have changed when Customers brought money and bought

products. Of course, provided the amount of online facilities available, purchase can be made at any time

through any mode. But that is not the crux of this discussion. This is the age where people have started

seeing companies and organizations with a much broader vision. The service they provide to the society

and 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 performing

various social activities which has embedded a good image of it in the customers’ hearts. A few of the

many CSR activities are as follows:

1) Opening of Nana Nani parks for Aged persons

2)Cleanliness & Hygiene campaigns launched in association with reputed NGO’s

3)Facilitates Pollution watch information

4)Safe drinking water to Earth Quake victims in Bhuj

5)Aids to Cyclone victims in Andhra Pradesh

6)Hosts various religious festivals

7)It does not matter in to what activity they are catering in to; ultimately they have created a good will

and an image of trust in the mind & hearts of the customers.

METHODS OF SELLING

STRATEGIES ADOPTED THAT HAVE MADE EUREKA FORBES A POPULAR BRAND NAME

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TELE

MARKETING

SALES FROM

INTERNET

MAIL ORDER

SALE

LARGE SCALE FIXED

SHOP

WHOLESALER

AND

RETAILER

DIRECT

SELLING

MARKET INTERMEDIARIES

DIRECT SELLING:

EFL was the first to introduce water purifiers and vacuum systems into the Indian homes. As these products were unknown to the Indian market, therefore advertising campaigns were impossible. Hence EFL chose the less traveled direct selling route. Direct method is a method that aims at establishing a direct connection with the potential customers and cultivates a lasting relationship. EFL was the first company to venture into the same and now is Asia’s largest direct selling organization.

Direct Marketing is a method which helps to create a direct connection with the potential consumer to obtain an immediate response and cultivate lasting consumer relationship.

The motto of direct marketing is “MAKING THINGS HAPPEN!”

Electrolux brought the Eureka brand to India in 1981 through Eureka Forbes, a joint venture with FGL. While Electrolux held 40% of the stake, the rest 60% was held by FGL. FGL was a 60:40 joint venture between the construction major Shapoorji Pallonji Group and one of India's largest business houses, the Tata Group of companies. Eureka Forbes launched its first range of vacuum cleaners, `Euroclean', in 1982, and established its direct sales division in the same year. The company's subsidiary for manufacturing water purifiers, Aquamall Water Solutions Ltd., was also 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 picking up, Eureka Forbes established its dealer sales division in 1985, its industrial sales division in 1986, and its exports division in 1989. During the mid-1990s, the company diversified into products like mixers and irons. However, as the quality of these products was reportedly very poor, Eureka Forbes had to discontinue them. In 1994, the company entered the air purifiers segment. 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 `Euro vigil'. The company established manufacturing facilities at Bhimtal (Uttar Pradesh, now Uttaranchal), Hyderabad (Andhra Pradesh) and Banglore (Karnataka). Eureka Forbes also had a Research and Development center at Bangalore.

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Advantages of Direct Selling

Easy, Convenient and Private

Goods at lower prices

Close relation between Company & Consumer

It saves the valuable time

Provides more choice

Disadvantages 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 SERVICE

The company's 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 by the company. The company's customer service network comprised over 400 CRC (Customer Response Centers), covering over 98 towns with more than 4000 sales personnel working under it. These centers offered a plethora of options to its customers in order to enhance their satisfaction with their purchases. Some of these options were:

• An `Annual Maintenance Contract', which the customer could enter into after the warranty period was over.

• Free maintenance for its equipment at medical establishments on a yearly basis—This scheme was called `Operation Red Zone'.

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• A mobile service van facility for New Delhi and Mumbai customers.

• `Water Labs' for customers who wanted to reassure themselves about the quality of water purified by Aquaguard. Representatives from these labs visited customer premises, collected water samples, and provided test reports to the concerned customer. This service was available in Mumbai, New Delhi, Kolkata Chennai, Bangalore and Ahmedabad.

• The `Euroclean home contest' gave owners of Euroclean vacuum cleaners the opportunity to entertain celebrities in their homes, on the basis of a cleanliness contest conducted by the company. The `Gift a Smile' scheme was introduced to encourage sales personnel to keep in constant touch with the customers.

• In an attempt to forge closer ties with its customers and push its new products, Eureka Forbes launched a scheme that gave existing customers the option of getting a new water purifier against their 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 were accessible through pagers

IMPROVING DIRECT SELLING

Enhancing 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 of information regarding that event, Eureka Forbes asked its salespeople to report sales levels to the head office on a weekly instead of a monthly basis. On the basis of this information, the head office was able to reduce inventories accordingly. To further fine-tune its salesforce's performance, the company began ranking salesmen according to their performance. This information was put on the Internet for other sales representatives to see and improve their own performances.

Providing information to suppliers: Eureka Forbes regularly provided its suppliers with information that helped them better plan their production. The company also provided

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suppliers with their own e-mail identities. An online model was built through which Eureka Forbes could directly interact with customers over the Internet. In addition, the company utilized the Internet to enable its six water-testing labs across the country to be in touch with each other.

Online training sessions: To reduce the costs associated with training new sales representatives, the company's product managers held online training sessions. These managers conducted chat sessions with new sales representatives over the company's network. The transcripts of the chat were also made available in a printed form later on.

No more direct marketing

In 1999, Eureka Forbes Ltd. (Eureka Forbes), the leading vacuum cleaner and water/air purifier equipment company, announced a major policy change that came as a surprise to the Indian corporate world. The company, regarded as the pioneer of direct marketing in India, was planning to focus more on the retailing business in the future. Commenting on this decision. This mov was in accordance with the company's plans to increase the visibility of its products. The company 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 sales revenue generated by the retail division. Eureka Forbes' Senior Vice-President, Sales and Marketing, Palekar, explained, "While the dealer channel contributes 10% to the overall sales turnover of the company, the direct sales route contributes 75%."

The same year, in another major departure from the business practices adopted since it began business in India, Eureka Forbes announced its decision to enter the bottled water market. The company wanted to position itself as a one-stop shop for products related to providing pure water. Industry watchers questioned this decision, observing that most manufacturers of bottled

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water were regional players and very few brands had an all-India presence. Parle's Bisleri mineral water brand, the only national level player at that point of time, was expected to pose stiff competition to Eureka Forbes.

The fact that these developments came at a time when the partners in the Eureka Forbes joint venture, Forbes Gokak Ltd. (FGL) and Electrolux AB (Electrolux), were engaged in a bitter boardroom battle, added to the air of uncertainty surrounding the company. The tiff had started in early 1999, when Electrolux announced its decision to walk out of the direct sales business world 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 retail business without Electrolux's financial support and marketing expertise. The decisions to shift from direct selling to retailing and to enter the bottled water segment were being eyed with suspicion by analysts. Commenting on these decisions, analysts said that since Eureka Forbes was a relatively new player in the retail business and did not have much experience, it could have a tough future ahead.

Marketing Mix

PRODUCT

a) Easily available nation wide.

b) Easy to handle.

c) Multiple products launched for each product type.

PROMOTION

a) Active subscription immediately,

b) Right time installation of products.

c) Properly repair services against paid AMC’s.

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PRICE

a) 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.

PLACE

a) Urban educated India that cares for their family.

b) Areas prone to diseases.

c) Strategically chosen locations for

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