Union Bank School Of ManagementMEP-4 Marketing Management A Case Study on Eureka Forbes Presented By R K Mittal S Baiju V B Sahay Table of contents 1 2 3 4 5 6 7 8 9 10 11 11 Overview of Company Industry Analysis Environment Analysis (PEST) SWOT analysis 4¶P Competitor Analysis Marketing Strategy Gap Analysis New Initiatives Facts of the case Recommendations Bibliography . a person dies of water borne diseases. After establishment of concept. hard floor cleaning and maintenance machines. They were the first to innovate and make the Indian homes realize the need of water purifiers and vacuum cleaners. The primary objective of initial communication was to introduce the EFL·s salesman called Eurochamp to its target audience ²home maker-and persuade them to accept the concept of direct selling. Its ´Celebrate Waterµ strategy laid the foundation of aqua guard. Health is wealth was the advertising message at the first launch of aqua guard. air purifiers. vacuum cleaners. the accepted way to purify water was to boil it. 398 towns across the country 10000 strong dealer sales network and 58 distributors strong industrial sales network. supported by call centre. it offers industrial solutions such as industrial water purifiers. access control systems. high pressure cleaners. The company offers water purification systems. y Concept of Direct Selling It is observed that more than 80% of the diseases in India are water related made people conscious of its quality. post purchase training and a host of other customer care incentives. mobile service vans and 24 hours helpline to the customers ²Euro helpline They are in close and constant touch with their customers. multi channel corporation ² Part of the Shapoorji Pallonji group inception in 1982 Over 7000 sales men-called eurochamps Largest network catering to the need of 131 cities. Overview of the company : Eureka Forbes Limited (EFL) started with joint venture between Forbes (India) and Electrolux (Sweden) by introducing water purifier (aqua guard) and vacuum cleaner (Euro clean) in the market.12 billion multi product. cleaning and hygiene products. fire alarm systems and surveillance systems. In addition.Eureka Forbes Limited ² A Case study 1. A sale is only the beginning of the relationship³They make a special effort to let the bond of friendship endure through service. Eurochamps were positioned more as solution provider than as sales persons ²as friends who come to house and demonstrated the impurities of water. y y y y y y y Rs. in every 20 seconds. They have created exiting new products and services to satisfy customers· needs. Pioneer in Direct Selling ²Asia·s largest direct sales organization A strong service network that backs up sales efforts. intrusion alarm systems. In India. customer care representatives. . they began to propagate the importance of drinking water in improving the quality of life. security solutions including home security systems. However for most Indians. listening to them and understanding their needs. commercial and industrial vacuum cleaners. y y y y y Awards: y The Frost & Sullivan Environment Excellence Award 2010 ² Best company of the year award in Residential Point of Use ( POUs) treatment systems in India and with customer service leadership award UNESCO Water Digest Award 2009-10 ² Continuous three times as the best complete domestic water solutions providers Super brand ²Aqua guard 2009-10 --. and non-Govt.g. whereas 68% of population lives in villages.Third time in a row Super brand Euroclean ²2009-10 ² Second time in a row Winner of Most Admired Knowledge Enterprises ( MAKE) Asia award Holds the distinction of being a case study at the prestigious Harvard Business School. Only 1% of rural population has access to purified potable water. Tsunami in Tamilnadu in 2005 Free pollution under control ( PUC) camps at petrol pump all over India Awareness program and seminars on water borne and respiratory disease. clinics. Govt. Hospital. First to have daily pollution data telecast on NDTV. y y y y y . Govt. Bhuj earthquake in 2001.Target audience: Primary y y y y Main target has been families with young children who are most prone to water borne disease. Set up of various recreational parks for senior citizens Installing free water purification systems in time of calamities e. clinics. Mumbai floods in 2005. So people living in rural areas are also main audience. bodies and health care agencies EFL ² Friends to society: y Aqua guard water right child bright program for educating the school students on healthy living and building an army of young Aqua Ambassadors to spread the message of water conservation. Established an institute of environment in 2000 to promote awareness about managing our natural water and air resources. bodies and health care agencies Industries which use mineral water in manufacturing their goods Secondary target audience: y y Small children basically infants. teenagers who are immature and incapable to have direct purchase People going to hospitals. and non Govt. Therefore company gained 100% market share initially. Therefore spending on this front was far below than requirement. As there was no concrete plan to provide health and hygienic atmosphere in the society. y Water Purifier and Vacuum Cleaners were no were in the wishlist of Consumer Durables. Effect of this can also been seen as Aquaguard has become synonyms for water purifier like Xerox. y As the products were completely new for the market. Economic Environment: At the time of introduction of the company India was in development stage. The product with which company entered into the Market i. PEST Analysis : Political Factors Every time Government was talking about providing pure drinking water to common man. Dalda. Surf etc. many plan were also introduced. . Also they were able to spend some %age of their income in luxurious items to gain social status. But result was not encouraging and only 5 to 6% population was getting safe water. y People were not aware of these products therefore company created the need for the product and made people aware of benefits of Water Purifier and Vacuum Cleaner and how they are useful in day-to-day life. After its launch new category was introduced in India. They were in a position to spend on their basic needs.e. As India was in Development stage middle income group was expanding. So. water purifier and vacuum cleaner were completely new for Indian market. Therefore.Industry Analysis : y At the time of launch in 1982 there was no player in the market for purifiers and cleaners. Infrastructure condition was not up to the required levels. it was Government failure to provide minimum needs of the people. people were becoming more conscious regarding and their health problems. This was a ideal situation for a company for getting qualified and cheap labour required. Unemployment was in alarming situation at that time. suitable technology was required. company using are world class technology. %age of unemployed youth was increasing. It has 7000 dedicated. And therefore. And in most of cases we were dependent on developed nation. EFL is Asia s largest direct selling company. This was due to lack of proper infrastructure facilities. Literacy rate was increasing in the country. And middle income group was increasing vastly. The technologies. EFL was not an exception. Growth rate at that time was high. Unsafe water is the causing 80% of the diseases and in every one minute 5 deaths was occurring due to water born diseases. Per capita income was increasing resulting rise in standards of living. On the strength of this company is able to achieve its mission and goals. which was a well known company in world. motivated work force. Technological Factors Technologically India was not a good position. Their R & D department is continuously engaged in innovations for providing best products regularly in changing . The name of its water purifier Aquaguard has become synonymes for the water purifiers and whenever we think about water purifier name Auaguard comes to our mind. For this they collabarated with Electrolux of Sweden. SWOT Analysis Strength Its Brand Name. Because they were planning for complete new product for India. And population was rising towards undesirable level. And therefore proper plan for cleaning water and hygenic condition was required to prevent from further worsening the problem. Social Environment Only 5 to 6% population in India was getting safe water. Eureka Forbes has its own Brand Image. For example in vacuum clean category they have brought fully automated cleaner. Company is known for taking challenge by introducing new products. 68% of population lives in rural area. Weakness Earlier there were very few players in the market and customers had limited options. Therefore. But . Because they are often cheated by low profile companies and their bogus products. In this scheme more thrust has been given for efforts and not on actual sales. And the company is 5 times winner of Most Admired Knowledge Enterprise. It is an open and democratic organization. This has become negative for the company as company s 75% sale is done through this channel only. EFL has one of best training facilities for their employees. Organization has a scheme for getting feedback from staff in regular intervals. Opportunity Till now EFL has concentrated its business in Semi-urban. which is the Asia s 1st fully automated cleaner. various options are available with the customers. Demand of Domestic Vacuum cleaner is in declining stage. But. which is stage based incentive scheme. But now-a-days numbers of players in the market are increasing day-by-day. Urban and Metro areas. The company has Unique compensation plan named as Bettering the Best . Attrition is another major issue and like other industry EFL is also facing the same.environment. There is ample opportunity for the company to expand its business to rural country to sale especially low cost purifiers and cleaners. Product Life Cycle (PLC) is on declining stage. Some of the company s product not gets sufficient market penetration. Company has given trust on R & D for innovations and providing world class product to people. Very few people like a marketing to knock their door. which is not touched by the company. The success of low cost purfiers from HUL has given a lesson for company that there is huge demand of low cost purifier and company has great opportunity in low cost products. This has become one of the major threats for the company. it is an opportunity for the company to expand their business to rest of the population. The position of safe drinking water in the country in not well. And therefore. And within period of less than three years of time company gained 50% market share in storage based water purifiers. 80% of the diseases are water born diseases. In India only 8% of the people use water purifier. Therefore. But now-a-days no of competitors are increasing day by day and for company it has become tough to maintain its market share. Till two year back company s product price was not in range of lower middle income group and lower income group. Higher Income Group is shifting fast for the use of bottled drinking water. . customers are searching products as per their requirement. This is an opportunity for the company to educate the people for the use of their product. Living standards of life is also improving. Now people have become choosier and are more aware. Three years back Hindustan Unilever Limited ( HUL ) launched storage based water purifier.still more effort required to introduce product like Robocleanz and also to fill the portfolio gap. Threats: When company entered entered into the market there was no competitor in the market. 4Ps of Marketing Eureka forbes has positioned its products aimed at all segments of customers. Euroclean range through Direct selling 2. Vacuum Cleaners: 9 different types of Vacuum cleaners with different capacity and features. Forbes range through retail chain outlets Some of the products are listed below: Euroclean Wet & Dry Euroclean power wash Spakle Robocleanz Euroclean Euroclean Euroclean Euroclean Ace Bravo X Force lite vac Eureka Forbes introduced Robocleanz. . which is is India¶s first fully automatic Vacuum Cleaner. Product Overview Vacuum Cleaners Eureka Forbes has marketed their products under two brand names 1. RO+ UF+ and SMP+ . UV+. Some of the products are listed below: Aquaguard Total protect(RO) Aquaguard Total reviva(RO) Aquaguard Total atom(RO) Aquasure Elegant(RO) Aquasure Elegant(RO) Aquasure Nano Aquaguard Ultra (UF) Aquasure 3PCTi (storage) Aquasure Xtra (storage) Aquasure Supremo(storage) Aquasure Crystal (UV) Aquasure Ivory (UV) Aquasure Aquaflow (UV) Aquasure Storage UV Aquaguard Total SENSA (UV+RO+UF+SMP+Eboiling) Aquaguard Total Infinity(UV) Aquaguard(Classic UV) Aquaguard(CompactUV) Aquaguard Booster (UV) Aquaguard Total miracle AquaGuard Total SENSA is world¶s only purifier purifier equipped with E-boiling +.Water Purifiers Eureka Forbes has marketed more than 20 different types of Water purifiers affordable by all segments. A buy back policy has also been framed by the company as a marketing strategy as well as to reward customer loyalty. They also used a direct marketing strategy to capture more than 50% in this segment. Competitor analysis To start with.com Promotion The company used to promote their products through Radio. On a typical day these technicians visit 20000 kitchens acroos the length and breadth of the country. It was only after 2005 that competition heated up with the arrival of players such as Kent.eurekaforbes. Tata has also launched their low cost models starting . Place Eureka Forbes¶ reach is spread across 398 towns and 131 cities in India. Print media during the 80s. It has also put in place a retail distribution channel with 10000 dealers. particularly HUL µs low cost storage purifiers. They also unleashed a blitzkrieg campaign across television channels using Actress Hemamalini as their brand ambassador. Later they extensively used TV . Some of the companies which started marketing these products fell by the wayside. The sales force numbering 7000 people are connecting to 2 million homes adding 1500 customers daily. Now internet is also used to promote their products using company website as well as banner ads in major websites with more traffic. customer care representatives and mobile service vans. Their products are available for purchase through the webite also www.Philips and Tata group. The reputation of the company also spread across country by word of mouth. and UF . Nearly 4000 company trained technicians augment their business by providing after sales service.Unilever had the advantage of being the first mover in low cost storage purifier market. Eureka Forbes has also put in place a call centre . Eureka Forbes did not have any completion for years together. They have been successful in wresting 32% market share in RO type purifiers and 25% in UV type . They also have 58 distributors for institutional sales. Incidentally company also ran a campaign against water purifiers using Chlorine.A campaign called pani ka doctor was catchy and got more attention . Hindustan Unilever. Kent positioned most of their products across the high end segment in RO. UV. They were the pioneer of direct marketing in India. The salesman will make a cold call initially and try to woo the customer with logic and reason If he is successful in his attempt he will arrange for a demo . The company created a need for the product by bringing on the theme of clean environment.from middle class families in their early 20s straight out of College.´ They recruited young men. interpersonal and communication skills were a pre-requisite.from as low as Rs 700 in this segment so as to capture the vast potential market of lower income groups. Marketing Strategy In India At the time of launch in India there was no player in the market for water purifiers and vacuum cleaner . The man with a case became a second logo for the company.After recruiting they would be put through training to get knowledge about company products . The customer is not aware that he may have some use for the product. And in some cases potential Eurochamps are located during sales call at customers house. Thus they had the advantage of being the ³first mover. functional skills. Attitude. The company christened them Eurochamps. Eureka Forbes decided to market their products primarily through the less travelled route of direct sales . . On closing the deal order will be placed and the product is delivered in two days. These sessions will be both in ±class and onfield. Training is an ongoing phase with mentoring and pairing with seasoned marketing people. Sometimes new salesmen are recruited using Friend ±get a friend scheme. 00 pm . 8.8. He has to possess good manners to get himself into households. 2. 5.4.00 . . 8. They did not have a product for the masses. Gap Analysis In the beginning the company had the whole market to themselves.A typical day in the life of a Eurochamp Daily Routine of Eurochamps 7.00am .Commercial Knocking. 12.Reporting The revenue of the company depends on how well the Eurochamp conducts himself and his attitude.00 pm .15 am . Hence they missed the bus to HUL who provided India with low cost models suiting every .5.30am to 8. But their products catered only to a niche market. skill and motivation.00 . 4.11. Rather than rewarding only sales volume a stage based incentive would be given using a point system for going through different cycles of a sale. To attract and retain the Eurochamps company had schemes such as own your bike scheme.00 pm .00 pm .Reporting.00 pm .Getting briefing for the day work.00 .2. Initially a sales volume based incentive scheme was followed by the company.Reporting. Later a new system called Bettering the best was launched by the company.Demos. The remuneration for Eurochamps was also based on a fixed portion + incentives in the form of commission.00 . The marketing strategy of the company was a resounding success that it was taken up as a case study at Harvard University.15 .For Household knocking. In terms of promotional gap Company is falling behind its main competitor Kent . That is by going into the rural market and tapping the full potential. New Initiatives y y y y Providing aquaguard on rental basis Installation of water filtration plants at villages Cleaning and maintenance of public places like railway station Buyback scheme of aqua guard In the course of the case study following questions were thrown open Q 1 : Consumers today are far more sophisticated than before. b) Pricing of a product is done only after cost analysis. Therefore..purse. The market is so big that there is still lot of room at the top. They should plug this hole. 75% of their sales is still routed through direct sales. . which is justified when the product is new. direct selling is an expensive means of reaching out to consumers. There is no image gap as such in case of eureka Forbes because their Brand is already established and deep rooted in the mind of consumers. For more penetration company should continue same model besides offering customers more choice through dealer outlets. purchase risks are high. Company finds direct selling process a cost effective method. Whoever penetrates this sector will win the race in the long run. it should continue with this method. why would a customer tolerate the Euro Champ intruding on his time and privacy now? Ans : a) Number of people using water purifier in India is still very low and company has gained its position mainly due to direct selling approach. and hence. In terms of usage gap a lot of ground is to covered by the Company as vast sections of the society is deprived of clean drinking water and low cost purifiers. In fact all the companies in the fray has lot of potential in plugging the latent market potential . Besides. when consumers are already well acquainted with its products? After all. Does Eureka Forbes still need to continue with this direct selling model. smart and suave. Q 2: How would Eureka Forbes manage to keep its sales force motivated. On the other hand. Employees are getting package in mixed terms. rather than only on the basis of sales volumes (sales closed)? Ans : a) It is true that there are several opportunities in the market for sales personnel. if Eureka Forbes were to argue that they take less qualified sales people from small towns. because EFL has its own Brand Image and Eurochamps are skilled and trained enough to know how to manage such calls and only after getting positive response from the customer they enter into their houses. and BPOs are recruiting salespeople/telesales executives with better incentives. EFL is not an exception. b) Any company can survive if it changes and adapts itself as per environmental needs . in the market? Several industries. In the present scenario lot of MBA graduates are available and company should go in for their professional services. and provide them jobs. when there are several opportunities available for the salespeople. At the same time working with big organization renders social status as well as different kind of experience. for instance. It has own HR Department and it should revisit some of their policies and incentive schemes may be restructured to reward only the performers even while retaining its stage based incentive. And EFL has its own Brand image and a sales person feels pride in working with it. The same rule is applicable in EFL also. So how can Eureka Forbes keep its sales force motivated? Can compensation plans be altered to account for efforts put in be the sales force at every stage of selling process. financial services.c) It is true that very few people like marketing personnel to knock at their doors. is this likely to work for the company in today s market? After all. In the case of Eureka Forbes it is not completely true. In salary there is . consumer durables. It is happening because people are often cheated by low profile companies and their bogus products. Salary and incentives may be raised on par with today s insurance/BPO and MLM companies to attract new staff and keep them motivated c) Unlike western countries Indian needs some secured income. Giving similar incentives as earlier are not likely to work for the company now. the customer today is sophisticated. To fight its competitors companies has developed new and enhanced products and through some products they are providing fresh technologies. Besides. Q 3: The sales person is the company for the customer. Q 4: Is the company s portfolio adequate? The best seller products of Eureka Forbes. which is far more convenient and healthy according to various surveys.e. To augment its portfolio company has entered into the business of Air purifier and Security system and company is getting encouraging response. Given these arguments. Usha and Kent. The vacuum cleaner is targeted to high income group and for industrial use. There are few examples where some sales person has become Vice-president & more. The vacuum cleaner is either rally low. . Now. or completely absent in the consumer s hierarchy of durable purchase. It has changed it HR policies to keep their employees motivated. He is just carrying out the motions. for instance. The water purifier is being fast replaced by better technologies of other companies. which is based on sales volume. Ans : In past view yeas company has shown sufficient interest towards entering into new businesses. There are some employees who have been staying in the company for more than 20-25 years. Has the organization as a whole become complacent in managing its branch? Ans: It is not true because it were true company would not have established its Brand image. Its product life cycle may be in the maturity or decline stage. The Eureka Forbes salesperson does not seem to be highly motivated while doing his job. and its future direction. the vaccum cleaner and the water purifier are both facing intense competition in their own ways.a some fixed component and other is variable component in the form of incentives. i. in water purifier segment it has brought products of low range targeting low income groups and also to compete other players. the company itself is not as aggressive in its branding activities as it was before. And company is continuously getting good patronage in targeted group. or by bottled water. comment about the company s product portfolio. Hence senior representatives claim more popular territories assigned to new representatives. They have to earn two thirds from their sales efforts. Further. The new system would award y y y y y . Further. No proper review of field staff by senior management ² DDSMs and DSMs are expected to visit the field at least once every 15 days to review performance and set targets. This caused irritation to homeowners thus registering complaint with EFL·s central office or just slammed the door in the next eurochamps face. Eurochamp solely depend on sales volume. the demo equipment was damaged or they were not clean. sales closing and installation took lot of time of supervisors. there is no comfort of a sufficient quantum of fixed monthly salary. senior managers find it difficult to monitor sales activities. which is also a source of conflict and tension within the eurochamp ranks. Further chances of demoralizing are very high on getting from door slams during cold calls. Territory conflicts due to increase of sales force³Initially territory conflict was rare due to small sales force. some territories have become more lucrative than other. demos. This plan reconfigured EFL·s compensation and incentive structure.Facts of the case: y Attrition ²The Eurochamp job is a high pressure job which involves travelling. there are more chances of existing jobs Poor performance of Eurochamps ² Focus only on completing their demo instead of maintaining relationship. carrying products and demonstrations and putting a lot of energy into presentations. several eurochamps called on the same potential clients on the same day. Rather than reward. Special people and resources were dedicated to training. However with the increase of sales force especially in urban markets. Considering the above and demand of sales talent. Moreover Regional Heads are dependent or relying on the formal and informal reports instead visiting field and out of field for many months. meeting many people. Paper work for detailed information on the eurochamps door knock. Moreover. New compensation plan ² Bettering the best EFL established centralized recruitment and training centers to ensure formal standardized firm wide training approach. No formal customer contact database ²In the absence of formal customer contact database. due to change of demographic. a sale 300. Incentive and pay packets should be raised so that People will feel attracted to come over instead of other options such as BPO/Insurance etc.This led to disputes in calculation of points for incentives.µ General objective ² Making eurochamp feel good about themselves. attending meeting 200. Gaps in distribution have to be filled by expansion of dealer network. increasing daily demos. The Bettering the Best initiative may be taken forward with proper review system in place to reward only the performers. improving the spirit and morale of the sales team.points for successful completion of various stages of the selling process and link compensation to the points scored. Recommendations: y y y y y y y Addressing the price gap More value addition to existing product A lead management system with integrated customer database More attention to promotion and after sales service of products Restructure of incentive schemes More innovations Expansion its reach by organic and inorganic ways Company has to address the price gap vis a vis the products offered by HUL. Company needs to promote their products more effectively to counter the campaigns done by competitors like Kent. . A proper review system is also to be put in place to monitor performance of eurochamps. They need to market intensively these products in the rural market and recapture the lost market in low cost storage type purifiers. And finally company should keep up their R&D and innovation to keep up with the times and competition. demo 100. New system was an effort to split bigger goals into smaller targets and to encourage each and every eurochamp to achieve the smaller targets. and enhancing customer engagement time ´Bettering the best. Monthly reward and divisional level rewards also. improving sales productivity and overall quality of sales. The existing products to be re packaged or reformulated so that customer gets a value for money proposition out of it. Short term incentives were offered on the basis of points earned.Tata etc. For this a ´leadµ management system is to be evolved with integrated database of prospective customers so that genuine performers will feel a sense of pride and involvement. A knock earned 5 points. Specific objectives --.Improving the productivity level of low performers. &10.rediff.com 2.in 5.business dated 8. Principles of Marketing by Philip Kotler/Gary Armstrong 8.com 6.09. www. Case studies in Marketing in Indian Context by R Srinivasan 9.10.com 4.companiesandmarkets. www.economictimes. www.co.12. Money control.09 .news.com 3.kent. Marketing Management by Philip Kotler/Kevin Keller 7. www.Bibliography 1. www.eurekaforbes.