Eureka Forbes

Case Study on Eureka Forbes

Presented By:

Saurabh Kumar
46
Nikhil Sharma

BC-

About Eureka Forbes

Consumer durable company
A joint venture between the Shapoorji Pallonji Groups
Forbes & Company Ltd. based in Mumbai,and Electrolux
of Sweden ,in 1982.
Started as a small firm to introduce domestic water
purifier the Aquaguard.
Now a multi-product, multi-channel organization.

Eureka Forbes-Products and

Services
Vacuum Cleaners
Water Purifier
Air Purifier
Security Solutions
Life Automation Solutions

History
Fred Wardell, a well-known businessman of Detroit, Michigan launched
vacuum cleaners under the Eureka brand name in 1909.
Eurekas vacuum cleaners-sleek, versatile & lightweight.
In 1913 Eureka launched six different models & offered various add-ons for
cleaning floors, walls, upholstery & crevices.
During early days it employed 5000 salesmen ,had 400 branches to cater
growing demand.
Established itself as market leader in Vacuum Cleaner industry within a
decade of its inception.
1915- Received the highest award the "Grand Prize", by a jury of electrical
experts at the San Francisco International Exposition.

Became No1 Vacuum cleaner company of US in 1920s

and manufactured 1/3 of total purchase made in US.
By 1919 production at Detroit factory was over 2000 units
per day
World War II Eureka had to stop production and its business
suffered to a great extent for a couple of years.
1945-Headquatered shifted from Detroit to
Bloomington,Illinois. Merged with leading heating and airconditioning equipment manufacturer William Oil-O-Matic,
which was renamed as Eureka-Williams.
Diversified into the manufacture of oil burners & government
defence equipments.
1960 -Merged with electronic good manufacturer National

History
1974-Electrolux of Sweden, the world's
largest producer of home appliances,
purchased Eureka-Williams and changed its
name back to Eureka.
1983- El Paso (Texas, US)unit - world's largest
vacuum cleaner manufacturing facility.

Foray into Indian

Markets

1981- Electrolux brought the Eureka brand to India through

Eureka Forbes, a joint venture with FGL (Forbes Gokak Ltd).
Pattern of stake: Electrolux : FGL :: 40:60
FGL(Forbes Gokak Ltd)- A 60:40 joint venture between the
construction major Shapoorji Pallonji Group and the Tata
Group of companies.
1982- Launched first range of vacuum cleaners,
"Euroclean". established its direct sales division and
Aquamall Water Solutions Ltd.,subsidiary for manufacturing
water purifiers.

Foray into Indian Markets

1989- Established Export sales division
Mid 1990s-Foray in mixers and irons, which failed
miserably.
1994-Entered air purifiers segment.
1995-Launched Tornado range of vacuum cleaners and
Aquaflo range of water purifiers exclusively for marketing
through the dealer route.
1997- Diversified into electronic security solutions under
the brand name Eurovigil.
One of the first direct selling companies
Pioneer in direct marketing

SWOT
Strengths
Strong brand of Aquaguard and vacuum cleaner
A pioneer and benchmark in direct marketing.
Asias largest direct selling company.
Strong dealer sales network.
World class quality products.
Stronghold and large market share in its prominent brands.
Strong and effective Customer Response Centers.
Effective use of IT.
Core strength- Its workforce

SWOT
Weakness:
Margins may get affected due to heavy investments
in direct selling.
Difficult to serve huge customer base.
Sales information took 45 days to reach(15 days for
processing) on a monthly basis.
Intermittently introduced new product segment
and failed.

SWOT
Opportunity
Huge market in rural and semi-urban areas.
To cater to the demands of corporates .
To capitalize peoples demand for pure drinking
water and general hygienic and cleanliness .
Provide more robust and effective after sales
service.
More technological innovations in products.
More versatility.
Focus on core product brands.

SWOT
Threats
Competitors
Low awareness among people regarding
usage and usefulness of its products.
With exit of Electrolux in 1999 in JV, there
was a setback in marketing expertise and
financials

Direct Marketing
Eureka Forbes followed the globally
strategies
tried and tested DIRECT SALES
route for marketing its
products in India, thus becoming one
of the first direct selling companies in
India.

 Direct selling
One of the first direct selling
companies
Operations begin from Delhi with just
10 sales representatives.
The company believed that its core
strength was its people.

Eurochamps
The company employed
dynamic, highly motivated
individuals, called
Eurochamps, who
projected the image of
The friendly man from
Eureka Forbes

 Smartly dressed salesman who came to their

houses and cleaned up things in a jiffy or showed
how air/water purifiers were indispensable.
Initially targeted the metros but soon began
visiting smaller cities and towns also.
The company began advertising across various
media primarily to familiarize its target segment,
housewives, with its products and introduce it
to its sales force.

Advertisement
Helpful salesperson who solved the problems of
housewives.
Models appeared as Friendly and trustworthy.
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.

 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.

After Sale Services

Customer Care Network with over 400 CRC,
covering over 98 towns
Annual Maintenance Contract
mobile service van(Mumbai,New Delhi)
Water Labs (Mumbai,New Delhi,
Kolkata,Chennai,Banglore and Ahemdabad)

 New water purifier against their old model

at a discounted price .
Euroclean home contest
Service call back guaranteed with in 48
hours

A relationship does not end with

a sale, It actually begins
Call Center for customer service
With in a year 5 more CRC
B2E (business to employee) exercises and
employees asked to report weekly instead of
monthly.
Ranking the salesperson according to their
performance

 Regular information to suppliers and email

identities.
Online training sessions by managers
Enabled its water labs to work online

 Net profit Rs 56million in 1995-96

Rs 2.29 billion in 1997-98

However

In 1999
Direct selling policy changed
Consumer training drive with a pager number
for demonstration and training by
salesperson.

 Advertising Policy Changed

Maidservant using a vacuum cleaner
Entered the water bottle market

Environment-friendly and hygieneoriented

Eureka Forbes Institute of Environment.
Daily measurement of air pollution in 8
metropolitan cities with NDTV and aired on star
news, also published on website like
www.ndtv.con and www.webhealthcare.com
Held free pollution control camps in 10
metropolitan cities

Propects
Decision to enter the retail business was primarily the
result of its launch of Tornado vacuum cleaners and
Aquaflo water purifiers in 1995.
Till now, the retail route for this range was used
mainly to cater to the industrial segment.
By 1999, around 5% of the companys sales came
from the 2500-strong dealer network.
In 2001, the dealer market was growing at the rate of
25% annually.

Achievements
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, Leela Kempenski and corporates
such as Mahindra & Mahindra ,TCS , Bajaj
auto ,Wipro Fluid and Telco.

 2001 Turnover of Rs 3.68 million ,32% of which came

from vacuum cleaners and 45% from water purifiers.
2002 undisputed market leader with 75%
and 85% market share and vacuum cleaners and
water purifier.

Recommendations
Move to expand into retail to increase visibility of
its products, but focus on its core competencyDirect Marketing.
Make its products compact and easy-to-use.
Focus more on Free Demonstration of products
on customers demand.
Emphasis on innovation on its core products.
Make a foray into untapped rural markets