Gurleen

Himanshi
Abhishek
Kamini
Kirandeep
Jai
NO MORE DIRECT
MARKETING
 In 1999, Eureka Forbes Ltd, announced a
major policy which came as a surprise to the
Indian corporate world.
 MD commented on this decision “ Direct
sales permits us to exploit only the top end of
the market.
 The company planned to make its product
available in retail outlets through network of
2600 dealers and also to increase the sales
revenue generated by retail division.
 In the same year it also announced its decision
to enter the bottled water market as it wanted
to position itself as a one-stop shop products
related to providing pure water.
 The tiff started when its partner Electrolux
announced the decision to walk out of the
direct sales business worldover, consequently,
sell off its 40% stake in Eureka Forbes.
 The co. observers stated that Eureka Forbes
could find it difficult to succeed in retail
business without financial support of Electrolux
and marketing expertise.
BACKGROUND NOTE
 Eureka’s vacuum cleaners were sleek,
versatile and lightweight, which were better
than other company’s vacuum cleaners.
 Within few years the company became well
known for its innovative product range.
 In 1913 Eureka launched six different
models & offered various add-ons for
cleaning floors,walls,upholstery & crevices.
 With its growing popularity in early 1900s, it
employed around 5000 salesmen & opened
over 400 branches.
 In 1915 Eureka received the “ Grand Prize” by a
jury of electrical experts at San Francisco
International Exposition.
 By 1929 the company went on to become the
number one vacuum cleaner company in the US.
 During world war II Eureka had to stop production
and its business suffered to a great extent for a
couple of years.
 In 1945 it merged with leading heating and air-
conditioning equipment manufacturer, which was
renamed as Eureka-Williams.
 Over the next years, it diversified into the
manufacture of oil burners & govt defence
equipments.
 It could not stay long in all these business & soon
decided to focus only on vacuum cleaners and
other home appliances.
 In 1974 Electrolux purchased Eureka-Williams &
changed its name back to Eureka.
 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.
 Eureka Forbes launched its first range of vacuum
cleaners “Euroclean” in 1982 & also established its
subsidiary for manufacturing water purifiers,
Aquamall Water Solutions Ltd.
 The company began operations from single
office in Delhi, as it started picking up sales,
Eureka Forbes established its dealer sales
division in 1985, its industrial sales division
in 1986 & its exports division in 1989.
 In 1997 Eureka Forbes diversified into
electronic security solutions under the brand
name “Eurovigil”.
EUREKA FORBES-
STARTING FROM THE
SCRATCH
 It followed globally ‘tried & tested’ direct
selling route for marketing its product in
India, thus becoming the first direct
selling company.
 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 employed dynamic, highly
motivated individuals, called ‘ Eurochamps’,
who projected the image of “ The friendly
man from Eureka Forbes”
 It suffered a setback in 1992-93, when
profits declined by 50% in comparison to
previous year.
 However it gradually gained acceptance in
Indian market & sales picked up.
 The company began advertising various
media initially to familiarize its target
segments, housewives, with its products &
introduce it to its sales force.
 The company provided suppliers with their own email identities .An
online model was built through which eureka forbes could directly
interact with customers over the internet .In addition company utilized
internet to enable its six water-testing labs across the country to be in
touch with each other .
 Though many households bought vacuum cleaners ,the product’s usage
was very limited .To rejuvenate the vacuum cleaner market eureka
forbes changed its advertising strategy in 1999 and instead of focusing
on ‘friendly salesman’ theme ,the company released an advertisement
campaign featuring a maidservant using the vacuum cleaner .
 The company launched a consumer training drive to support the new
campaign.Sales personnel trained domestic help regarding product
usage .The new campaign aimed at establishing the fact that vacuum
cleaners were easy to use and even maidservants could be trusted with
the product.
 Eureka forbes expected to register a 20% increase in sales volume from
this Rs 15 million ad campaign.
 ‘A relationship does not end with a
 The company believed that

sale.It actually begins’. Eureka forbes gave a lot of importance to

customer relationship management (CRM) and tried to maintain high level of
post-sale customer contract.The company also set up a 24 hour -365 day
virtual call center.Over the years the number of call centers have increased to
six .

 To enhance the efficiency of its direct marketing efforts .Eureka forbes

implemented various B2E (business to employee) exercises
.Traditionally,the company received sales information every 45 days .It was
being sent on a monthly basis ,it took another 15 days to be processed .
 In order to reduce time between the occurrence of an event and receipt of
information ,Eureka forbes asked its salespeople
to report sales
levels on a weekly basis instead of a monthly basis .
 The company’s customer service network comprised over 4000 CRC
(customer response centers) ,covering over 98 towns with more than
4000 sales personnel working under it .These centers offered many
options to customers in order to enhance their satisfaction such as :

*An ‘annual maintenance contract’ which the customer could

enter into after the warrant period was over .
*Free maintenance for its equipment at medical establishments on a
yearly basis .

 *A mobile service van facility for New Delhi and Mumbai

establishments.
 *’Water labs’ for customers who wanted to reassure themselves
about the quality of water purifies by aquaguard.

 *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 .
 To boost its image of an enviroment-friendly and hygiene-oriented
company,Eureka forbes established the ‘Eureka forbes
institute of enviroment’.

 This move was aimed at spreading awareness about pollution and its
effect ,and the importance of protecting the enviroment.

 This was done in association with TV media company NDTV and was
aired through a weather bulletin satellite TV channel ‘star news’.

 The company held free pollution control camps in 10

metropolitan cities on World Enviroment Day on June5,2000 .
 As a result of these initiatives ,Eureka forbes built a customer
base of 2.5 million by 1999 and recorded a turnover of Rs 3.08
 billion for 1999-2000.

 Besides the household segment ,its client list included leading

hotels such as The TAJ ,The Oberoi ,The Centaur ,Four
Seasons ,Orchid International and corporates such as Mahindra

 & Mahindra ,TCS , Bajaj auto ,Wipro and Telco .

 FUTURE PROSPECTS
 The company diversified into bottled water in order to
strengthen the core products by capitalizing on their brand image .

 Eureka forbes not only had the financial strength ,but also a strong
network of sales executives to push its new products into the market .

 The company’s decision to enter into retail business was primarily the
result of its launch of ‘Tornado’ vacuum cleaners and ‘Aquaflo’ water
purifiers in 1995 .

 Forbes had utilized the retail route for this range mainly to cater to the
industrial segment .
 In 2001 ,with a customer base of 3 million ,Eureka forbes turnover
stood at Rs 3.68 million ,32% of which came from vacuum cleaners
and 45% from water purifiers .

 By 2002 the company became the undisputed market

leader with 75% and 85% market share and vacuum cleaners and
water purifier respectively .

 Meanwhile in April 2002 , FGL signed a deal to buyout

Eureka forbes from Electrolux for Rs 317.7 million
.However the two partner could reach an agreement over the issues
of brand rights transfer and hence the matter remained unresolved in
July 2002 .
 Electrolux’s departure had no negative impact on the performance of
Eureka forbes and was also clarified by the company .

 Over the years many players had entered the segments In which
Eureka forbes was operating but none of them had been able to
make a significant impact .

 That the ‘going strong’ despite the upheavals it was going

through ,indicated that direct marketing or retail ,with or without
Electrolux ,Eureka forbes planned to retain its distinction of being the
largest direct sales organisation in Asia .
THANK
YOU