AN ORGANISATIONAL STUDY REPORT OF EUREKA FORBES LTD

By

ATHIRA S (M 08 B

MANESH MADHU (M 08 B 30)

PRASANTH THILAKAN (M 08 B 35)

R. VISHNUPRASAD (M 08 B 37)

DC SCHOOL OF MANAGEMENT AND TECHNOLOGY

PULLIKKANAM, VAGAMON, IDUKKI (DT)
KERALA, INDIA
AN ORGANISATIONAL STUDY REPORT OF EUREKA FORBES LTD

By

ATHIRA S (M 08 B

MANESH MADHU (M 08 B 30)

PRASANTH THILAKAN (M 08 B 35)

R. VISHNUPRASAD (M 08 B 37)

UNDER THE GUIDANCE OF

DC SCHOOL OF MANAGEMENT AND TECHNOLOGY

PULLIKKANAM, VAGAMON, IDUKKI (DT)
KERALA, INDIA
 Certificate of Approval

The following Organisational Study Report is hereby approved as a certified study in

management carried out and presented in a manner satisfactory to warrant its
acceptance as a prerequisite for the award of Masters in Business Administration
degree for which it has been submitted. It is understood that by this approval the
undersigned do not necessarily endorse or approve any statement made, opinion
expressed or conclusion drawn therein but approve the Organisational Study Report
only for the purpose it is submitted.

Name Signature
I. Introduction
1.1 Eureka Forbes Ltd
Eureka Forbes is a joint venture between Forbes Gokak (part of the Shapoorji Pallonji
group) and Electrolux AB of Sweden. It was setup in India in 1982 to market health
and hygiene products to Indian consumers. It has manufacturing facilities at Bhimtal,
Hyderabad and Bangalore together with an advanced Research & Development centre
at Bangalore. The water testing facility of Aquamall (100% subsidiary of Eureka
Forbes) in Bangalore is the first facility in Asia and the seventh in the world to get
accredited by the Water Quality Association of America. The turnover of Eureka
Forbes in the FY 2003-2004 was around 510 Crores. Eureka Forbes has around 4000
successful sales personnel who are referred to as “Eurochamps” and over 500 response
centres to provide prompt and efficient after sales service.

Eureka Forbes pioneered the concept of direct marketing in health and hygiene
products. Direct marketing always faces lots of challenges and its successful operation
needs continuous monitoring and motivation. It is Asia’s largest direct sales
organization. It also has dealer sales division, industrial sales division and an exports
division. While the dealer channel contributes only around 10% of the overall sales
turnover of the company, direct sales route contributes around 75%.

This study has carried out at Bangalore Eureka Forbes Central Sales Office. This study
covered the functions of various department i.e. Sales, Marketing, Human Resources,
Finance, Systems, Research and Development and customer Relations Management.
This study also took time to analyze the strength and weakness of the organization.

Eureka Forbes Ltd having 172 offices in India in which 61 of them is in South India.
About 95% of the market share for vacuum cleaners and about 74% of the market
share for water purifiers. Major competitors are Philips, Whirl Pool, Kent, Pureit
(HLL) etc. Mainly the product promotions of Eureka Forbes are through Exhibitions,
Brochures, Campaigns and field activities.
1.2 INDUSTRY PROFILE

Eureka Forbes Limited started its operations in the health and hygiene line with a
vision of
‘A happy, Healthy, Safe and Pollution Free Environment, Built on Trust and Lasting
Relationships with Customers’
Eureka Forbes product lines are related to health, hygiene and safety. They are mainly
concentrating on water purification systems for different segments. Cleaning
machineries for domestic as well as industrial applications. Their total security
solutions provide complete safety.

1.2. A. 1. DOMESTIC WATER PURIFICATION SYSTEMS

Eureka Forbes is the leaders in domestic water purification system and they are the
specialists in 5 water technologies addressing more than 17 diverse water conditions.
Eureka Forbes is the world’s largest UV water purification system manufacturer.
They have products for domestic as well as industrial applications. Below is the
different models, prize and technologies.

1. 2. A. 2. INDUSTRIAL WATER PURIFICATION SYSTEMS

Industrial application water purification systems are available with different capacity.
The purified out put water capacity ranges from 60 liter per minute to 600 liter per
minute. These models are positioned in small industries, restaurants, recreation
centers etc.
SI Product Technology Channel Price (RS)

Direct Marketing Models

1 Aquaguard booster Ultra Violet Direct 7940
2 Aquaguard Hi flo Ultra Violet Direct 9190
3 Aquaguard classic Ultra Violet Direct 7190
4 Aquaguard Compact Ultra Violet Direct 7190
5 Aquaguard Total Gold Nova Ultra Violet Direct 9590
6 Aquaguard Total I Nova Ultra Violet Direct 8350
7 Aquaguard Total NF Membrane Direct 14500
8 Aquaguard Total RO Membrane Direct 14500
9 Aquaguard Total RO smart Membrane Direct 9150
10 Aquaguard Ultra Membrane Direct 7500
Retail Models
1 Forbes Aquaflo Ultra Violet Retail 5600
2 Forbes Crystal Ultra Violet Retail 7250
3 Forbes Designa Ultra Violet Retail 6750
4 Forbes Spring Fresh Membrane Retail 14000
5 Forbes AquaSure- Storage- Jr Resin HP Retail 1800
6 Forbes AquaSure On Tap Resin HP Retail 690
DSA + Multichannel
1 Forbes AquaSure –Storage Sr Resin -HP DSA+ Multi 2750
2 Forbes AquaSure Resin -HP DSA+ Multi 1800
3 AquaSure Sr with Iron remover Resin +HP DSA+ Multi 3490
4 AquaSure On tap Resin –Iodine DSA+ Multi 690
5 Forbes AquaSure Ultra UF candle DSA+ Multi 3950

6 Forbes AquaSure Cool –Cello model Resin HP DSA+ Multi 2750

1.2. B. CLEANING SYSTEMS

Cleaning systems include vacuum cleaners which can remove dust & dirt from deep
below surfaces, hard-to-reach places and areas where it does not seem to be present.
There are different models of vacuum cleaners are available with Eureka Forbes.
Eureka Forbes also selling high end steam cleaners to the Indian customers. Eureka
Forbes home cleaning systems include vacuum cleaners which include models like
Euroclean Jet, Euroclean bullet, Euroclean WD, Euroclean swift etc sold through
direct marketing channel and Tornado trend, Tornado Zen and Tornado All Around
sold through retail marketing.

SI NO. Product Channel Price (RS)

1 Euroclean Ace Direct 6990
2 Euroclean Futuro Direct 6990
3 Euroclean Supremo Direct 7990
4 Euroclean Turbo Direct 3990
5 Euroclean Ultima Direct 23500
6 Euroclean WET & DRY Direct 9690
7 Forbes Easy clean Dealer 2195
8 Forbes Trendy Cherry Dealer 5750
9 Forbes Trendy Steel Dealer 5750

SI No. Product Channel

1 GD 930 Corporate Care Division
2 BACKUUM Corporate Care Division
3 GU350/450 A Corporate Care Division
4 WD -225 Corporate Care Division
5 Z POWER 3 – IN - 1 Corporate Care Division

1.2. C. AIR PURIFICATION SYSTEMS

Eureka Forbes indoor air purification system purifies the indoor air and thereby
prevents allergies headaches, nausea, physical aches, asthma etc. Some of the products
in this segment for Eureka Forbes are

SI NO. Product Channel Price (RS)

1 AP 2000 Direct 6400
2 Euro Geneus Direct 9990

1.2. D. SECURITY SYSTEMS

Eureka Forbes provides complete security and safety solution to the Indian homes
with a wide range of products like intrusion detection, access control, surveillance and
fire detection. Eureka Forbes tie-ups with world leading companies in security
systems like Philips (Bosch), GE Interlogics & Lenel of the US for total integrated
solutions - also recently appointed by Notifier of USA, leaders in fire alarm systems as
their preferred distributor in India. Euro vigil division of Eureka Forbes has a unique
central monitoring station watch 24 hours, 365 days – a computerized station watching
the customer's premises all day, every day. Following are the listed products.

SI.No. Product Price (RS) / Type

1 Home security Solution – I SEE 9990
2 I SPEAK 3850
3 SECURI – T - LINK 10500
4 PC585, PC 1565, Detector Intrusion Alarm System
5 Access control System – Controllers
SY200NT2 CONTROLLER,
SY200NT4 CONTROLLER,
KANTECH PROXIMITY KT 200,
PC 4020 FT/KT
6 SYRIS PROXIMITYREADER, Readers
SH-VR PROXIMITYREADER,
SH-1 PROXIMITY READER
7 SH-VR PROXIMITY READER, Cards
SH-1 PROXIMITY READER,
SH-2 PROXIMITY READER,
SH-2KP PROXIMITY READER,
SH-4 PROXIMITY READER,
SH-5 PROXIMITY READER,
SH-6 PROXIMITY READER,
SH-7 PROXIMITY READER
8 Conventional Fire Detection System, Fire Alarm Systems
Addressable Fire Detection System
9 VCM110, VCM111, VCM211, VCM201, Surveillance System -
VCM310, VCM311, VCM401 CAMERAS
10 SAM 9, SAM 14M, SOS 2W, SAM 12, MONITORS

11 STR 24/48, STR 960, STR 961 TIME LAPSE

1.3. DIVISIONS IN EUREKA FORBES

1.3. A. Direct Sales Division: Established in 1982 - The main selling arm and flagship
of the company. This division has over 5000 sales personnel working in and across the
country. The products under this division include Euroclean range of Home Cleaning
Systems, Aquaguard Water Purification Systems and Euroair Air Purification
Systems. Euroclean Vacuum Cleaners - India's Largest Selling Vacuum cleaners with
over 2.5 million satisfied customers. Already expanded into 450 smaller towns
through franchised direct operations

1.3. B. Retail Sales Division: Established in 1985 - The Dealer Sales Division caters to
the retail segment. The division has developed a distinct place for itself, marketing
Tornado Vacuum Cleaners, Forbes & water purifier. They have 3,800 strong dealer
sales networks and a 58 distributor strong institutional sales network

1.3. C. Corporate Care Division: This division is the youngest division with a
mission to provide safe water to every one. This division deals the economy water
purification systems to the rural market. This does not require any electricity or online
water to operate. This division is closely associate with NGOs and other community
developers to provide purified water to the rural population.

1.3. D. Forbes Professional: Established in 1986 - To provide adequate coverage of

the large and rapidly growing industrial and commercial segments, Industrial Sales
Division was set up with Industrial and commercial heavy duty cleaning equipment
and water purifiers as its main products, this division has built a base loyal customers
1.3. E. Export Division: Established in 1989 - The Exports division has made inroads
in countries like Nepal, Sri Lanka, Bangladesh, Qatar, Kuwait, U.A.E., South Africa,
Mauritius and many other countries exporting Home Cleaning Systems, Water
Purification Systems and other Home Appliances. Company has also entered into a
50:50 joint venture with Lux International Ltd., Switzerland, to form a company,
Eurolux International Ltd., which has been incorporated in January 2006 as per Swiss
law in Zug, Switzerland. This company will cater to the markets of East Europe, South
Africa and Russia. Directors are confident that the company's operations in the
overseas markets will be as successful as in the domestic market over a period of time.
1.3. E. 1 INTERNATIONAL OPERATION
To understand the changing global market scenario on water purification systems and
the increasing awareness on health and hygiene, Eureka Forbes have begun a venture
– Euro Forbes International – with its regional head quarters and manufacturing
facilities in Singapore. This international network made Eureka Forbes a global player
in water purification systems, which enabled us to spread the promise of providing
pure and safe drinking water beyond the boundaries of India. Their rapid international
expansion plans also include Middle East, South Africa, Latin America and Europe.
Eureka Forbes’s water purification systems are manufactured by Aquamall, a wholly
owned subsidiary, with a vision of becoming a one – stop shop for water purification
solutions. Aquamall is the world’s largest UV water purifier manufacturer with ISO/
ISI certification.
1.3. F. Security System Division: An electronic Security solution under the brand
name of Euro vigil was established in the year of 1997. Now this division is with
direct sales.

1.3. G. Service Division: A strong service network backs up sales efforts - 4000
company trained technicians make 15,000 kitchen visits daily, supported by call
centers, customer care representatives & mobile service vans. Established 24 hour
 helpline for customers called Eurohelpline. A significant part of our revenue comes
from relationship marketing including service contracts, spares & accessories sales,
product up gradations and references of new customers.

1.3. H. Supporting Divisions: There are 8 supporting divisions, they are

a. Technical
b. Research and Development
c. Manufacturing Team
d. Manufacturing Division
e. Logistics
f. Euro Value
g. Human Resource Management
h. Marketing
i. Systems

1.4. ORGANISATIONAL CHART

Organisational Structure
CORE LEADERSHIP TEAM

CHAIRMAN

VICE MANAGING
CHAIRMAN DIRECTOR

SENIOR SENIOR
SENIOR SENIOR SENIOR
SENIOR VP VP SENIOR
VP VP VP
VP INTERNA HUMAN VP
FINANCE DIRECT TECHNIC
RETAIL TIONAL RESOURC FACTORY
SALES AL
MARKET E
 Structure of Main Division

SENIOR VP

VP

General Manager

Deputy General Manager

NUMBER OF EMPLOYEES DECREASES

Regional Sales Manager

Area Sales Manager

Senior Divisional Manager

Division Sales Manager

Deputy Divisional Sales Manager

Branch Manager
Group
Salesof
Head Representative
Leader
Customer Response Centre
Team Leader
STRUCTURE OF SUPPORTING DIVISIONS

SENIOR VICE PRESIDENT

FINANCE

VICE PRESIDENT FINANCE

GENERAL MANAGER
FINANCE

DIVISIONAL GENERAL
MANAGER FINANCE

SENIOR MANAGER FINANCE

 MANAGER FINANCE

ASSISTANT MANAGER
FINANCE

EXECUTIVE FINANCE

OFFICERS FINANCE

SUPERVISORS FINANCE

SENIOR VICE PRESIDENT

MARKETING

DIVISIONAL GENERAL
VICE PRESIDENT
MANAGER MARKETING
MARKETING

SENIOR MANAGER
GENERAL MANAGER
MARKETING

DIVISIONAL GENERAL
MANAGER MARKETING

SENIOR MANAGER
MARKETING

MANAGER MARKETING

ASSISTANT MANAGER
MARKETING
SUPERVISORS
EXECUTIVE
OFFICERS MARKETING
MARKETING
MARKETING
 SENIOR VICE PRESIDENT
HUMAN RESOURCE

VICE PRESIDENT HUMAN

RESOURCE

GENERAL MANAGER
HUMAN RESOURCE

DIVISIONAL GENERAL
MANAGER HUMAN
RESOURCE

SENIOR MANAGER HUMAN

RESOURCE

MANAGER HUMAN
RESOURCE

ASSISTANT MANAGER
SUPERVISORS
EXECUTIVE
HUMAN RESOURCE
HUMAN
HUMAN
OFFICERS HUMAN RESOURCE
RESOURCE
 SENIOR VICE PRESIDENT
TECHNICAL

VICE PRESIDENT
TECHNICAL

GENERAL MANAGER
TECHNICAL

DIVISIONAL GENERAL
MANAGER TECHNICAL

DIVISIONAL GENERAL
MANAGER TECHNICAL

SENIOR MANAGER
TECHNICAL

MANAGER TECHNICAL
ASSISTANT MANAGER
SUPERVISORS
EXECUTIVE
OFFICERS TECHNICAL
TECHNICAL
TECHNICAL
TECHNICAL
1.4. A Business Model of Eureka Forbes
As explained earlier Eureka Forbes follows the concept of direct marketing
aggressively. It manages an efficient sales force which is given proper training and is
kept highly motivated. A proper recruitment procedure and incentive scheme helps to
employ and retain good talent in the organization. A typical day of a sales person
starts with a field meeting at around 7.30AM. Generally the meeting is headed by a
DDSM and a product manager. In the field meeting, the previous days performance is
reviewed and the targets to be achieved by each Eurochamp to avail various incentives
is discussed. Each Eurochamp then moves to the allotted location and start to
“Knock”. This early morning time is selected so that the sales person can talk to the
decision maker in the house who generally will leave for work after 9AM. Aquaguard
being a product priced in the range of Rs 6500-7500, the buying decision will largely
depend on the earning member of the family. So even though in most families the
initiator is the wife, husband will be the buyer. So meeting the husband is very
important in making sales. Once the sales person meets the buyer, he introduces
himself and talks about the product. If the person is slightly interested, the sales person
fixes an appointment for a demo in the evening. Once they get a demo, there is a large
possibility of it getting converted to a sale. Once they finish the days “Knocking”, they
return to the office and review the days work and prepare for the demo. In the evening,
they carry a demo kit of the product and necessary manuals. They explain the product
features and the technology being used in purification and they also persuade the
customers who are hesitant to pay money in lump some to go for installments. Once
the sale is completed, the service personnel install the product at the customer’s
location. Direct marketing is one of the most flexible tools in an integrated marketing
program. Here a campaign is carefully planned in accordance with the target market
and the product concerned. The company emphasizes a lot on building long lasting
relationships with the customers which is evident from its slogan
“Eureka Forbes, Your Friend For Life”. The stronger the relationship with the
customer, the more will be the opportunities for the company to influence the future
direction and success of its business.

2.1 Human Resources Management

Human resource (or personnel) management, in the sense of getting things done
through people. It's an essential part of every manager's responsibilities, but many
organizations find it advantageous to establish a specialist division to provide an
expert service dedicated to ensuring that the human resource function is performed
efficiently.

All in all, the HR function is still to a large degree administrative and common to all
organizations. To varying degrees, most organizations have formalized selection,
evaluation, and payroll processes. Efficient and effective management of the "Human
Capital" Pool (HCP) has become an increasingly imperative and complex activity to
all HR professionals. The HR function consists of tracking innumerable data points on
each employee, from personal histories, data, skills, capabilities, experiences to
payroll records. To reduce the manual workload of these administrative activities,
organizations began to electronically automate many of these processes by introducing
innovative HR practices.

The major functions of HR involves the following

 A. The payroll module automates the pay process by gathering data on employee
time and attendance, calculating various deductions and taxes, and generating
periodic paycheques and employee tax reports. Data is generally fed from the
human resources and time keeping modules to calculate automatic deposit and
manual cheque writing capabilities. Sophisticated HCM systems can set up
accounts payable transactions from employee deduction or produce
garnishment cheque. The payroll module sends accounting information to the
general ledger for posting subsequent to a pay cycle.
B. The time and labor management module applies new technology and
methods (time collection devices) to cost effectively gather and evaluate
employee time/work information. The most advanced modules provide broad
flexibility in data collection methods, as well as labour distribution capabilities
and data analysis features.
C. The benefit administration module permits HR professionals to easily
administer and track employee participation in benefits programs ranging from
healthcare provider, insurance policy, and pension plan to profit sharing or
stock option plans
D. The HR management module is a component covering all other HR aspects
from application to retirement. The system records basic demographic and
address data, selection, training and development, capabilities and skills
management, compensation planning records and other related activities.
Leading edge systems provide the ability to "read" applications and enter
relevant data to applicable database fields, notify employers and provide
position management and position

In Eureka Forbes HR function is headed by Sr. Vice President, who is reporting to the
president of the organization. The challenges in HR function of Eureka Forbes are the
recruitment and retaining of the people.

Administration: Strategic planning, organizational evaluation, County Board

relations, policy recommendations, supervision of department staff

Recruitment: Eureka Forbes recruits their manpower through direct interview and
mostly through campus recruitments and employment exchanges.
Training and development: The new recruitment will undergo 1 month class room
induction cum training program in our training centre which is known as CRTC -
Central Recruitment Training Centre. Eureka Forbes provides ample scope for
learning for the employees through its SELF LEARNING PROGRAM (SLP) and
provides a Diploma in Sales Management in association with the Narsee Monjee
Institute of Management Studies (NMIMS), one of India's top 10 management
institutes, improves the knowledge base of the Sales people.

Management Development Programs from prestigious institutes in India including

IIMs develops and groom the leaders for tomorrow. All these activities are carried out
by HRM.

Payroll: SAP automates the pay process by gathering data on employee time and
attendance, calculating various deductions and taxes, and generating periodic
paycheques and employee tax reports. The necessary data required fir this process is
providing by HR. Salary includes the basic pay, sales commissions, performance
incentives, Bonus etc.

Performance Appraisal Systems: All the employees performance has been assessing
with a specified time interval. The middle and top management staff’s performance
have been assessed by their effectiveness of KRA –Key Result Area.

Transfers: All the employees’ job in Eureka Forbes is transferable and the company
provides all the expenses incurred during the transfer. Also takes care of their family’s
travel and settlement in the new place.

Employee Relations and Discipline: HR monitors the organizational behavior of

each employee and educates each employee in basic discipline in the organization and
any one violates, HR is authorized to take necessary discipline action. Takes care of
Employee grievances and complaints.

Benefits and Welfare: This includes the insurance policy, accident benefits,
provident fund, gratuity and pension plans, loan facilities. All the employees and their
dependents are covered the cash less hospitalization option.
Compensation: Salary and benefit surveys, job evaluation, job descriptions through
Key Result Areas.

Employee Services: Enrollment in benefits, employee discounts for recreational

spots, resolution of enrollment or claim problems, employee newsletter., educational
assistance, employee service awards.

Leaves of absence: State and/or Federal Family and Medical Leave rights, availing
approved leaves of absence, rights upon return to work, light duty assignments for
temporary periods.

Separations and terminations: Rights upon termination of employment, severance

benefits, unemployment compensation, conduct exit interviews.

2.2. Marketing Management

Marketing management is a business discipline focused on the practical application

of marketing techniques and the management of a firm's marketing resources and
activities. Marketing managers are often responsible for influencing the level, timing,
and composition of customer demand in a manner that will achieve the company's
objectives.

In the widely used text Marketing Management (2006), Philip Kotler and Kevin Lane
Keller define marketing management as "the art and science of choosing target
markets and getting, keeping and growing customers through creating,
delivering, and communicating superior customer value."

Marketing functions

Market Research:

In order to make fact-based decisions regarding marketing strategy and design

effective, cost-efficient implementation programs, and firms must possess a detailed,
objective understanding of their own business and the market in which they operate.
Traditionally, marketing analysis was structured into three areas: Customer analysis,
Company analysis, and Competitor analysis (so-called "3Cs" analysis). More
recently, it has become fashionable in some marketing circles to divide these further
into five "Cs": Customer analysis, Company analysis, Collaborator analysis,
Competitor analysis, and analysis of the industry context.

The focus of customer analysis is to develop a scheme for market segmentation,

breaking down the market into various constituent groups of customers, which are
called customer segments or market segments. Marketing managers work to develop
detailed profiles of each segment, focusing on any number of variables that may differ
among the segments: demographic, psychographic, geographic, behavioral, needs-
benefit, and other factors may all be examined.

In company analysis, marketers focus on understanding the company's cost structure

and cost position relative to competitors, as well as working to identify a firm's core
competencies and other competitively distinct company resources. Marketing
managers may also work with the accounting department to analyze the profits the
firm is generating from various product lines and customer accounts.

In Competitor analysis, marketers build detailed profiles of each competitor in the

market, focusing especially on their relative competitive strengths and weaknesses
using SWOT analysis. Marketing managers will examine each competitor's cost
structure, sources of profits, resources and competencies, competitive positioning and
product differentiation, degree of vertical integration, historical responses to industry
developments, and other factors.

Marketing Strategy:

Once the company has obtained an adequate understanding of the customer base and
its own competitive position in the industry, marketing managers are able to make key
strategic decisions and develop a marketing strategy designed to maximize the
revenues and profits of the firm. The selected strategy may aim for any of a variety of
specific objectives, including optimizing short-term unit margins, revenue growth,
market share, long-term profitability, or other Goals.

Implementation Planning:

After the firm's strategic objectives have been identified, the target market selected,
and the desired positioning for the company, product or brand has been determined,
marketing manager’s focus on how to best implement the chosen strategy.
Traditionally, this has involved implementation planning across the "4Ps" of
marketing: Product management, Pricing, Place (i.e. sales and distribution
channels), and promotions.

Product, process management:

Once the key implementation initiatives have been identified, marketing managers
work to oversee the execution of the marketing plan. Marketing executives may
therefore manage any number of specific projects, such as sales force management
initiatives, product development efforts, channel marketing programs and the
execution of public relations and advertising campaigns. Marketers use a variety of
project management techniques to ensure projects achieve their objectives while
keeping to established schedules and budgets.

More broadly, marketing managers work to design and improve the effectiveness of
core marketing processes, such as new product development, brand management,
marketing communications, and pricing. Marketers may employ the tools of business
process reengineering to ensure these processes are properly designed, and use a
variety of process management techniques to keep them operating smoothly.
Effective execution may require management of both internal resources and a variety
of external vendors and service providers, such as the firm's advertising agency.

Organizational management and leadership:

Marketing management usually requires leadership of a department or group of

professionals engaged in marketing activities. Often, this oversight will extend beyond
the company's marketing department itself, requiring the marketing manager to
provide cross-functional leadership for various marketing activities. This may require
extensive interaction with the human resources department on issues such as
recruiting, training, leadership development, performance appraisals, compensation
etc.

Marketing management may spend a fair amount of time building or maintaining a

marketing orientation for the business. Achieving a market orientation, also known as
"customer focus" or the "marketing concept", requires building consensus at the senior
management level and then driving customer focus down into the organization.
Cultural barriers may exist in a given business unit or functional area that the
marketing manager must address in order to achieve this goal. Additionally, marketing
executives often act as a "brand champion" and work to enforce corporate identity
standards across the enterprise.

Reporting, measurement, feedback and control systems

Marketing management employs a variety of metrics to measure progress against

objectives. It is the responsibility of marketing managers -- in the marketing
department or elsewhere -- to ensure that the execution of marketing programs
achieves the desired objectives and does so in a cost-efficient manner. Marketing
management therefore often makes use of various organizational control systems, such
as sales forecasts, sales force and reseller incentive programs, sales force management
systems, and customer relationship management tools (CRM).

In Eureka Forbes the marketing department is headed by Sr. Vice president and the
marketing department plays a vital role in the following to support the operation.

1. Advertisements
Advertisement improves the trust and builds the confidence of purchasing a product.
Different innovative advertisements will play a great role and it will support the sales
man for closing the sale.
2. Introduce innovative and attractive incentive Plan
The incentives like Silver Cycle Club and Club 100, Ace club, Aspire club etc are the
major prestigious qualifying clubs for the performers. Creative promotion of these
clubs brings more success in the CRCs.
3. Participation in all types of sales exhibitions
Sales exhibition is the place where people meet the products. By participating sales
exhibitions company can display their products and this helps to improve the visibility
of their products. Probably the customer may not buy the first time but he will be
aware of the products and think in the next time.
4. Introduce innovative sales promotion activities.
Come up with interesting and innovative sales activities in each CRCs will increase
the sales. This will automatically boost the interests and bring competitive spirit
among Eurochamps. This can be like a group operation, flat entry program or health
survey program, which can be related with a day of importance or related with festival
etc.
5. Do continuous Market Survey and analysis
This will help us to know the pulse of the market, identify new market, market
penetration level, identify potential customers and learn the competitor products and
their activities.

2.3. Financial Management

Financial Management means efficient use of economic resources namely capital
funds. According to Phillippatus, "Financial management is concerned with the
managerial decisions that result in the acquisition and financing of short term and long
term credits for the firm". The term finance may thus incorporate any of the
following:
• The study of money and other assets
• The management of money and control of other assets
• Profiling and managing project risks
• The science of managing money

“We are not just about profits we have made, the markets we have conquered or
the distances we have covered. Eureka Forbes is about the lives we have
touched". This is the financial statement of Eureka Forbes.

Financial Results

Particulars (2005-06) (2004-05)

Rupees Rupees
Sales and Other Income 6,33,57,03,128 5,50,24,35,405
Profit before Depreciation 42,37,45,077 38,14,49,368
Less : Depreciation 8,41,60,633 6,00,52,303
Profit before Tax 33,95,84,444 32,13,97,065
Less : Provision for Current, Fringe Benefit and
11,98,48,588 9,36,05,722
Deferred Tax
Profit after Tax 21,97,35,856 22,77,91,343
Less: Prior year's Tax adjustments (Net) NIL 20,05,927
Profit after Tax and prior years' adjustments 21,97,35,856 22,57,85,416
Add : Balance brought forward from previous year 10,47,50,156 20,88,09,940
Amount available for appropriation 32,44,86,012 43,45,95,356
APPROPRIATIONS :
Interim Dividend 8,52,00,000 24,75,00,000
Tax on Dividend 1,19,49,300 3,23,45,200
Transferred to General Reserve 9,83,50,000 5,00,00,000
Balance carried to Balance Sheet 12,89,86,712 10,47,50,156

DIVIDEND:
With growth in turnover and profit in the year under review, the company has paid an
interim dividend of Rs. 20/- per share (200% on face value of Rs. 10/- each)
amounting to Rs. 8.52 crores (previous year Rs. 50/- per share i.e., 500% on face value
of Rs. 10/- per share amounting to Rs. 24.75 crores). In view of the need to conserve
funds for various ongoing projects and new initiatives to be undertaken during the
ensuing year, the Directors consider that the interim dividend of Rs. 20/- per share
declared and paid be considered as final dividend for the year 2005-06 (previous year
NIL).
Operations: EFL has entered its Silver Jubilee year with a landmark turnover of Rs.
633 crores, a growth of 15% over previous year. The Profit before Tax has risen by
5.7% from Rs. 32.14 crores to Rs. 33.96 crores. This modest growth in profit is despite
the fact that the company was very much adversely affected by the introduction of
Value Added Tax (VAT) in various states where it has its operations and had to absorb
the impact of VAT during the year.

During the year, the company won much international and national recognition. It was
inducted as a case study at one of the most prestigious education institutions in the
world, Harvard Business School, USA. It joined an elite band of corporations being
honoured with the MAKE (Most Admired Knowledge Enterprise) award, first in
India and then in Asia. It was selected as the Best Consumer Responsive Company in
the Consumer Durables category by The Economic Times in association with Avaya
Global Connect. "Aquaguard" and "Eureka Forbes" were also recognised as Consumer
and Business Super brands respectively.
The company continued its efforts to develop products, people and processes to
strengthen its leadership position. In the water purification category, it enhanced its
presence at the top end of the market with RO technology-based products as well as
launched an affordable resin technology-based brand called 'AquaSure' for the masses
of India who have either no running water or electricity or both. In the vacuum
cleaning category, it launched an upgraded model called Ace. It has been the
endeavour of the company to proactively seek new opportunities and new market
segments with a focus on future trends and possible competitive threats.

The company continues to follow a prudent policy of maintaining sufficient cash

balances to fund its internal development programs for future growth. One such
initiative implemented has been MySAP, commencing 1st April 2005. The program is
the first of its kind for Direct Sales being implemented by SAP. Thus they accorded it
high importance and even featured it on their website as a major breakthrough. The
programme was envisaged to start by the end of December 2005, was launched in the
major cities in January 2006 and the roll out in the rest of the country will be
completed during the Financial Year 2006-07. Its main benefit will be a more holistic
focus on the customer, enabling the Company to forge even closer bonds with
existing customers as well as acquire lost customers. The programme that is being
developed is versatile and will assist in building the organisation's Direct Sales
competencies in existing markets and new markets. Its benefits will acquire partially
during 2006-07 and in totality from 2007-08.

Corporate Social Responsibility has always been high on the agenda of your company.
It continues to support Eureka Forbes Institute of Environment in working towards its
mission of 'Unpolluted water and air is our children's birthright'. This is done through
air pollution monitoring, rainwater harvesting consultancy, running awareness
programmes among school children, and conducting the Euro Enviro Quiz, India's
first and only national environment quiz for school children that now covers 160
schools in 14 cities with 1.2 lakh participants.
Euro Parivaar Enviro Park and Aaji Aajoba Park, for senior citizens and handicapped
children, as well as other social activities continue to be sponsored by the company to
bring cheer to the less privileged and society at large.

Directors are confident that, barring unforeseen circumstances, the company's

performance will live upto its new dreams and theme for the year "Those who dare
dream to day, that others may share tomorrow".

Share holding Pattern: As reported last year, the company in accordance with the
decision at the Extraordinary General Meeting held on 4th March, 2005 announced first
Buy-Back of 6,90,000 fully paidup Equity Shares. The offer for buyback of 6,90,000
Equity Shares of Rs. 10/- each at an average price of Rs. 215/- per equity share for an
aggregate consideration of Rs. 14,83,50,000/- was kept open during the period
between 16thMarch, 2005 to 15th April, 2005. During the year, the company bought
back the said shares at said aggregate consideration on 15th April, 2005. Consequently,
the total paid up capital of the company as on 15th April, 2005 stands reduced to Rs.
4,26,00,000/-.

Directorate: Mr. K.C. Mehra (Vice Chairman) and Mr. D.E. Udwadia retire by
rotation and being eligible offer themselves for re – appointment.

Subsidiary Companies: During the year under review, the company's wholly owned
subsidiary, Aquamall Water Solutions Ltd., has shown an excellent growth of 20% in
sales turnover and in line with the increased turnover, the company's Profit before Tax
has also grown by 20% after taking higher depreciation charge for the full year of Rs.
3.7 crores for a valuable intangible asset. During the year, the company has extended
the range of water purification systems by way of 'Reverse Osmosis'. Introduction of
the new purification systems would enable the Company to meet the evolving needs of
the customers.

Apart from the manufacturing plant in the leased premises at Baddi, Himachal Pradesh
which commenced commercial operations on 29th April 2005, the company is also in
the process of setting up its own factory at Baddi. The company expects to commence
commercial operations from its own premises during the first quarter of the financial
year 2006-07. Forbes Aquamall Ltd., a wholly owned subsidiary of Aquamall Water
Solutions Ltd. has reported impressive results with a growth in turnover of 23% and
profit before tax of 30% over previous year.

The company has endeavoured to achieve zero defects and customer satisfaction by
supplying quality products. Constant upgradations are being made in the
manufacturing infrastructure to improve the quality and productivity.

During the year under review, the company has acquired from its parent company,
Forbes Gokak Ltd., its 51% stake in Forbes Abans Cleaning Solutions Pvt. Ltd., a
company in contract cleaning business, and also its 50% stake in Forbes Aquatech
Ltd., a company which manufactures high quality low cost range of water purifiers
under the brand name 'Aquasure'. Both the companies have shown improved
performance in the year under review and are expected to give better results in the
coming year.

The company’s wholly owned subsidiary, Euro Forbes International Pvt. . Ltd.,
incorporated in Singapore has started showing improvement with a turnover of Rs.
7.87 crores and Profit before Tax of Rs. 33 lakhs. The company's operation, at present,
cover markets of Indonesia, Philippines and Dubai but during the ensuing year, the
company will expand its operations to Vietnam, Thailand and Malaysia.

During the year, the company has also entered into a 50:50 joint venture with Lux
International Ltd., Switzerland, to form a company, Eurolux International Ltd., which
has been incorporated in January 2006 as per Swiss law in Zug, Switzerland. This
company will cater to the markets of East Europe, South Africa and Russia. Directors
are confident that the company's operations in the overseas markets will be as
successful as in the domestic market over a period of time.

Insurance: Assets of the company have been adequately insured against usual risks.

Auditors and audit report: M/s. Batliboi & Purohit

Energy, technology and foreign exchange: The information in accordance with the
provisions of Section 217(1) (e) of the Companies Act, 1956 read with Companies
(Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988,
regarding conservation of energy, technology absorption, and foreign exchange
earnings.

Particulars regarding employees: A statement setting out the details of remuneration

paid to the employees as required under Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975

Directors' responsibility statement: Pursuant to Section 217(AA) of the Companies

Act, 1956, the Directors, based on the representations received from the Operating
Management, confirm -

i. that in the preparation of the annual accounts, the applicable accounting

standards have been followed and there are no material departures;
ii. that they have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the company at the end of the
financial year and of the profit of the company for that period ;
iii. that they have taken proper and sufficient care to the best of their knowledge
and ability for the maintenance of adequate accounting records in accordance
with the provisions of this Act, for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
iv. that they have prepared the annual accounts on a going concern basis.
2.4 System

System department headed by Sr.Vice president supported by eminent system

engineers. They have implemented the SAP in EFL’s operation is the brake through
in Direct Sales operations. Systems Applications and Products in Data Processing,
SAP is the recognized leader in providing collaborative business solutions for all types
of industries and for every major market. The SAP’s main benefit will be a more
holistic focus on the customer, enabling the Company to forge even closer bonds with
existing customers as well as acquire lost customers. The programme that is being
developed is versatile and will assist in building the organization’s Direct Sales
competencies in existing markets and new markets. Each and every documentation in
EFL is through this SAP. This includes

• Sales Documentation
• Service complaint lodging
• Material movements
• Product issues
• Spares issues
• Salary preparation
• CRM activities
• Details of each employee, documentation of personal and financial data.
2.5 Research and development

1. Specific areas in which R&D carried out by the company : The company's R&D
Centre continues to be recognized by the Department of Science and Industrial
Research, Ministry of Science and Technology, Government of India. The Water
Laboratory at Bangalore is recognized by Karnataka State Pollution Control Board and
World Water Quality Association - USA and accredited by National Accreditation
Board for Testing and Calibrating Laboratories, India. The R&D Centre has been in
close touch with the customers, manufacturers and field sales force to evaluate the
customer's needs and product performance. The main focus has been on improving
and upgrading the product offering by accelerating product development.

The R&D has helped maintain the market leadership position through absorption of
latest technology in the areas of floor care products, water purifiers and domestic
appliances.

The R&D Centre has contributed significantly towards value engineering and cost
control measures, at the same time maintaining value - benefit equation for the
customers. The R&D team also provides training to the field sales and service staff
besides providing constant updates on technology and new products to the field and
marketing division.

2. Benefits derived as a result of the above efforts: R&D through its efforts has
enabled the manufacturer to introduce on its own water purifiers at the lower end of
the market segment. R&D has also recommended improved electronics, which is more
stable and also automatically communicates to the service call center if there is a
service requirement.

R&D has, moreover, contributed to improve upon products and accessories like
Modern UV water purifiers, 7 Stage RO / UF & UV purifier, Membrane technology
based purifiers, etc. to meet the different requirements due to varying water condition
in the market place.
R&D has also tested and suggested improvements in imported products like Reverse
Osmosis, 3-in-1 Vacuum Cleaners, Five Stage Water Purifiers to suit Indian
conditions.

Company introduced Ecofriendly household cleaning Liquids for sale through service
personnel.

3. Future Plan of Action: There are a number of products, process improvements and
accessories, which are under development in the field of water purifiers, vacuum
cleaners, air purifiers, kitchen appliances and eco-friendly chemical cleaning
solutions. These products would be at various price points to cater to different market
segments. R&D will involve in joint development of products with Foreign Business
associates for International requirements.

R&D would continue to work on value engineering, cost optimization and re-
engineering to improve the overall operating efficiency. R&D works closely with
Business Development to introduce new products from the foreign business associates
and also for import substitution.

4. Expenditure on R & D :
a. Capital - Rs. 1.39 lakhs
b. Recurring - Rs. 186.94 lakhs
c. Total - Rs. 188.33 lakhs
d. Total R&D Expenditure as
percentage of total turnover - 0.31%

Technology absorption, adaptation and innovation :

1. Efforts, in brief, made towards technology absorption, adaptation and innovation.

In line with the rapidly changing technological environment, the R & D staff are
provided with the requisite means to keep abreast of the changes. They are also
encouraged to attend national and international technical symposiums and trade fairs
to understand the latest technology and adapt them to Indian conditions. Worked with
IIT Chennai to develop nano Silver technology for water purification enhancement.
The technology is implemented in the product seamlessly.

2. Benefits derived, as a result of the above: product improvement, cost reduction,

product development, import substitution, etc.

The results derived from the above efforts have contributed to significant
improvement in product quality and performance.

2.6 Customer Relationship Management (CRM)

KEEP THE CUTOMERS FOR LIFE – CUSTOMER RETENTION PROGRAMS

What is the greatest global business secret? Satisfied customers!!! Every company’s
greatest assets are its customers, because without customers there is no company and
there is no business. It is that simple. “The rewarded customer buys, multiplies and
comes back”. Treat the customers well and satisfied customers will be our best source
of advertising and marketing.

Success in today's business world depends more and more on building relationships
and keeping loyalty among customers and employees. Like any strong relationship --
loyal, long-term (and profitable!) business relationships require time, care, attention
and commitment.

Customers want more than a veneer of courtesy when they are in contact with us.
They want a business relationship where they are appreciated, respected and
remembered. When they think of doing business with us they want to be able to say,
“They know me very well”.

Excellent quality service helps to keep customer loyalty and helps to maximize
customer’ lifetime value.

Customers and the Relationship Process: Building relationship with customers is a

process that requires thoughtful communications. One can implement a one-to-one
strategy to influence each customer in an organization cycle. The people within the
company represent an important audience and play a key role in the customer
retention efforts.

As loyalty is improved, purchases increases. Loyal customers generate positive word

of mouth and referrals. Loyal customers are less likely to defect for bargains.

”Unsatisfied customers may not complain to you, but you can be sure that they will
tell at least nine other people about their unhappy experience with your company”.

Basic strategies to keep the customers.

Learn how to listen to the customers. Learn that giving quality customer service will
increase sales and will help us in customer retention and beyond.

Learn how to communicate with the customer so that they become loyal to our
product/service and us.

Learn how important it is to do our follow-up.

Think of the customer first and focus on their needs.

"If you think of the customer first … you will always win."

1. Art of listening to complaints.

Listening customer complaints are the first and most important step in the quality
service in any service oriented industry. Good customer listening helps organizations
avoid expensive service or quality overkill. Following steps have been implemented in
Eureka Forbes offices for receiving customer calls (Telephone/ walk in
customers/external customers).

A) Friendly greeting/welcome to the customer with a smiling face

Standard greeting style in all Customer Response Centers (CRCs) /Business Partners
(BPs) (Good morning, (after noon), (Evening), Eureka Forbes, Customer Relegations
Representatives (CRRs) name). Walk in customers have been treated well in all the
CRCs.
B) Listen carefully while receiving calls and collect maximum possible
information’s about the complaint of the product/need.

Get the nature of the complaint fully and pass this information’s to the service
personnel with out any deviation.

Ensure the complaint details pass to the service as per the scheduled time through
computer/telephone to the BPs/service department. (Daily three to four times)

C) Accessibility to contact Customer Response Center.

Introduced one Telephone line in all CRCs exclusively for incoming customer calls
for easy access.

Special instructions given to the CRRs to keep telephone line free (optimum usage) for
easy access for the customer.

Introduce EPBX facility in all the CRCs.

D) Customer Management Training and product training of CRRs/BPs/all

service people.

 How to behave with the external and internal customers.

 Giving and receiving effective feed back.
 Handling problematic customers.
 Keeping better relationship with customers.

E) Market research: Conducting field surveys through group leaders/ other field
staffs (BPs should visit 10 customers and service group leader has to visit 50 to 60
calls in a month). Customer survey is prime important, companies like Coca-Cola
Co. of Atlanta and Walt Disney Co. of Burbank, Calif. (in its theme parks),
conduct daily customer satisfaction surveys.

 Getting feed back and timely action on passing information’s to the respective
departments.
 Identify customer needs and supply their requirements.
  Identify false commitment and resolve customer grievances.
 CRR should assess the quality of the service provided by business partners by
doing Satisfaction Index Survey
 Conducted customer awareness program like free service.
 Getting suggestions from customer to improve our product quality.

2.Making difficult customers satisfied – challenges faced and the results there off.

Providing quality service to our customers is a continuing challenge. Providing great

service to angry, unrealistic, or rambling customers is an exceptional challenge.

A) Challenges faced to handle difficult customers.

 Waiting for long time

 Expectation was not met
 No care
 Treated poorly
 False commitment
 Loss of trust and confidence
 Argument

These are the main reasons for customer become unsatisfied and arrogant. The person
who handles the difficult customers should have certain qualities (Should listen the
customer, understand, pleasing, issues taken seriously, authentic and responsible,
appreciate customer views or opinions, give respect etc) and he should be always
balanced.

B) Steps have been taken to handle the difficult customers in EFL .

Training given to all service personnel focusing on handling difficult customer

Kept least response time for attending customer complaints at all CRCs.

Implement regular follow up after handling the difficult customers.

3.Going beyond “ just after – sales service”.

In addition to the quality service, which have been providing to the customers, have to
focus on what customer wants and needs help them to buy what’s best for them and
make them feel good about it. Satisfied customers always think about the company
and always would like to do business with this company. Steps should take to frame
out new strategic solution for customer retention - keeping the customers coming
back again and again and keep them for life. They become our best sales prospects and
our best opportunity to maximize our profit.

Since Eureka Forbes is a people driven company, all the employees in this
organization have to focus on customers. Help the customers whenever they require
any advice or doubts and ensure that all the employees in this organization are really
helping them for solving their problem or giving advice as a consultant. This is
important for every one who works and not just those in services. In the eyes of each
dept i.e. in sales, in accounts, in human resources, in a laboratory, in a production line
or in a warehouse, customers are equal.

Recommended following programs can implement in different CRCs

 Friend for Life Camp conduct in various places

 Customer Satisfaction Survey can conduct in various CRCs
 Conduct free water analysis programs in various places
 Keeping one technician for attending complaints on Sundays in all BPs place.
 Special free service for Aquaguard provided to the academic institutions.
 Involve in exhibitions with sales department.

4.Involvement with all branch members in customer retention program.

Without any question, consistent performance is what customers want most. More
than anything else, the customer wants service that he can depend on. A superior
customer service is not possible without the involvement of the internal customers. If
we are keeping a poor internal customer relations that will directly reflects in the
quality customer service.

 Involvement with Logistics in availability of spares

 Involvement with accounts dept in issues of spares
  Consult field problems with the sales heads
 Involvement with the water Laboratory in water related issues.
 Involvement with Dealer/ISD / Security Systems in customer related issues.

1.5 SWOT Analysis

Strength of the organization: Eureka Forbes is the young, vibrant organization with
employee strength of 7250 spread across 100 cities in India. Eureka Forbes has almost
1000 service centers to resolve the customer issues with a very least response time.
Eureka Forbes products are superbrand category (Water Purifier and Vacuum
Cleaners). All the facilities are certified with specific standards. R & D is well
recognised and service is available across the country.

Weakness: Since it is the direct sales organization, proper monitoring of employees is

not possible. Continuous and constant monitoring of employees is essential to
maintain the discipline in operation. The younger generation’s attitude towards direct
marketing is slightly changing and it is affecting the retention of the employees.
Direct marketing over heads are huge and constant motivation is required to keeping
the sales time always on.

Opportunity: Health, hygiene and safety are the major concern of the people today.
The environmental conditions are degrading due to the over exploitation and the
growing crime is another concern. Eureka Forbes has all the products to provide
solutions to these problems. The projected opportunities are very high in this line.

Threat: Because of the tremendous opportunities in the product line, lot’s of

organizations are focusing and investing money on these areas and it would creates
the competition.