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Direct Marketing by Eureka Forbes
Eureka Forbes followed the globally 'tried and tested' direct selling route for
marketing its products in India, thus becoming one of direct selling
companies in India. Vacuum cleaners and water purifiers new concepts
for Indian consumers, who had till then followed only the methods of
cleaning and filtering. Therefore, Eureka Forbes had tQ-first the concept of
vacuum cleaners and water purifiers in India before sell 'Eureka' as a brand.
The company believed that its core strengthi was its people. It employed dynamic,
highly motivated individuals, called 'Eurochainps,' who projected the image of 'The
friendly man from Eureka Forbes.' for the average Indian consumer, Eureka
Forbes became synonymous with the smartly dressed salesman who came to their
houses and cleaned up things in a jiffY or showed how air/water purifiers were
indispensable. Eurochamps 'ioj_tial!y targeted the metros but soon began visiting
smaller cities and towns also-.:-'" ---
Though the company it suffered a setback in I 992-93, when
profits declined by 50% Itt to the previous year. The following year, the
company even its :first-ever loss of Rs 42.5 million. However, gradually
the company's

acceptance in InJiau markets and company sales


picked up. The compariy began advertising across various media primarily to
familiarize its target segment, housewives, with its products and introduce it to its
sales force. -
@ 2005. ICFA! Center for Management Research All rights reserved No part of this publication may be
reproduced, stored in a retrieval system. used in a spreadsheet, or transmitted in any form or by any
means- electronic or mechanical, without permission
To order copies. call +91-40-2343-0462163 or write to ICFAI Center for Management Research.
Plot #49, Nagarjuna Hills, Hyderabad 500 082. India or email icmr@icfi!i.org Website:
www. icmrindia.Orf: http://www. icmrindia.org
This is an abridged version of the case "Eureka Forbes - The Direct Marketing Pioneer." Case Studies
are intended to be used as a basis for class discussion rather than to illustrate either effective or
ineffective handling of a management situation.
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Direct Marketing by Eureka Forbes
These advertisements showed helpful salespersons who solved the problems of
housewives. Television commercials typically featured models who appeared
'friendly' and trustworthy. The company also used actors from popular Hindi TV
serials, such as Nitish Bhardwaj and Amar Upadhyay, to enhance the friendly and
trustworthy image of its salespersons.
The company's direct marketing thrust did not end with the conversion of orders into
sales. Eureka Forbes started a customer care network that took care of after sales
services offered by the company. The company's service network
comprised over 400 CRC (Customer Response Centers), 98 towns with
more than 4000 sales personnel working under it. a plethora of
options to ils customers in order to enhance their satistiiC-tloifwiln):heir purchases.
' \
The company believed that 'A relationship llOes with a sale. It actually
, I .
begins.' Eureka Forbes gave a lot of to Customer Relationship
Management (CRM) and tried to maintain high level of post-sale customer contact.
As after-sales service formed a crucial elbrtent of its marketing mix, the company set
up a 24 hour-365 day virtual call C!Olnter. Th'e call center's software built into it
tracked a complaint back to the nearest sales office or franchisee on the basis of the
complainant's telephone number of-rlN -'code. Updates were arranged at an interval of
every 30 minutes. Over the of call centers was increased to six.
.
\,
As a result of its focused innovative products, the company was able to
record an 1.59bn and a net profit of Rs 56mn in 1995-96. In
/.-----
1997-98, Rs 2.29bn and Rs I 04mn respectively. However,
Eureka Forbes was not)satisfied with the growth of the vacuum cleaner market.
Though many Indian bought vacuum cleaners, the product's usage was
very limited. This was because many housewives found the product bulky and
cumbersome to use in comparison to the broom and cloth duster that were
traditionally used. Moreover, since domestic help was easily available, the need for
vacuum cleaners was not felt. Thus, not only was the penetration limited, product
upgrades were also low due to the infrequent usage.
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Direct Marketing by Eureka Forbes
To rejuvenate the vacuum cleaner market, Eureka Forbes changed its advertising
strategy in November 1999. Instead of focusing on the 'friendly salesman' theme, the
company released an advertisement campaign featuring a maidservant using the
vacuum cleaner. This shift was made after examining certain facts about end users
and vacuum cleaners usage patterns in the Indian market. Marzin Shroff, Vice-
President of Eureka Forbes' advertising agency, Triton Communications, said,
"Market studies and research carried out by us in the past few years indicated that
owners of vacuum cleaners use the product very sparingly. A of the Indian
.., \
consumers allow their servants to operate their washing not the vacuum
cleaner, hence the frequency of product usage is reduced
The company also launched a consumer training drive-t9;S1lp{:rQh new can1paign.
c,._ . ' '/
Sales personnel trained domestic help upkeep. Palekar
said, "Our direct sales team keeps contact wiP( the consumers on an on-going basis.
We intend to use this as an occasion to product to the household
help." The new campaign aimed at esta,b1ishinglhe fact that vacuum cleaners were
easy to use and that even maidservants could be trusted with the product. The
company also publicized a pager rwmber, along with the advertisement so that
customers could request product demonstration and training by a sales person. Eureka
Forbes expected to register a2Q%_increase in sales volume from this Rs 15 million ad
campaign.
To boost its image of an friendly and hygiene-oriented company, Eureka
Forbes Forbes Institute of Environment.' This move was
>-- ., '------"
aimed at about pollution and its effects, and the importance of
protecting the envtl:Qrtm&nt. Through the institute, the cc.:>mpany undertook various
initiatives for environrrtent protection, including daily measurement of air pollution in
8 metropolitan cities. This was done in association with TV media company NDTV,
and was aired through a weather bulletin on the satellite TV channel 'Star News.' It
was also published on the websites www.ndtv.com, and www.webhealthcare.com.
The company held free pollution control camps in 10 metropolitan cities on World
Environment Day on June 5, 2000, in association with TV channel National
Geographic and the United Nation's body UNICEF. In addition, the company
conducted lectures and cleanliness drives in various parts of the country.
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LllQJ
Direct Marketing by Eureka Forbes
As a result of the above initiatives, Eureka Forbes built a customer base of2.5 million
by 1999 and recorded a turnover of Rs 3.08bn for 1999-2000. Besides the household
segment, its client list included leading hotels such as The Taj, The Oberoi, The
Hyatt, The Centaur, Four Seasons, Orchid International and Leela Kempenski; and
corporates such as Mahindra & Mahindra, TCS, Bajaj Auto, HPCL, Wipro Fluid, Du
Pont and Telco.
Questions for Discussion:
1. With changing market conditions, is the direct still the right
strategy for a consumer electronics manufacturer like}31Jfek)a)fotl)es?
2. Analyze the shift in the company's

focusing on the
'friendly salesman' to the 'maidservant' in , ' --- ); ,
3. How can Eureka Forbes benefit from various environmental
protection activities? '
Additional Readings and References: --
1. Dubey, Chandan. _:.. New to Order Strategy for Euro
Clean." The Financial Express. 23, November, I 999.
2. Bhushan, Ratna. "Direct Selling Poised for Rapid Growth." www.blonnet.com.
22, March, 2000.
3. "New Vacuunr Cl'e&ner'
1
from Eureka Forbes." www.business-standard.com.
April,
\
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4. Mehta, Mona. "ompact Vacuum Cleaner: Eureka Forbes Plans Aggressive
F .
Sales Strategy." www.fmanctalexpress.com. 22, June, 2001.
5. Dua, AartL "Double Departure at Eureka Forbes." Business Standard.
01, May, 1999.
6. "Eureka Forbes First-Half Net Profit Rises to Rs 8.10 cr." www.business-
standard.com. 03, December, 1997.
7. "Eureka Forbes PBT at Rs 21.48 crore." www.expressindia.com.
24, June, 1998.
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Direct Marketing by Eureka Forbes
8. Sen, Shunu. "Networks Can Work for Consumer and Personal Goods."
www.blonnet.com. 04, January, 2001.
9. Sen, Shunu. "Brands That Don't Shout to be Heard." www.blonnet.com.
20, June, 2002.
I 0. Zachariah, Reeba. "Brand Rights Hold Up Deal on Eureka Forbes." Business
Standard. 22, July, 2002.
II. www.eurekaforbes.com
12. www.webhealthcenter.com
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