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EUREKA FORBES LIMITED By : Group 6

Pankaj Goel (221083)Pavan Kumar (221088)Piyush Jain (221089)Rahul Gupta (221109)Rupjyoti Barman (221119)S. Venkataraman (221120) Please review the growth of the water purifiers market in terms of technologies, changing customer profiles and review the impact on marketing channels of Eureka Forbes. Question 1Growth Review - UVUV Market2001-022002-032003-042004-052005-062006-07Market Size (Value)200323832522267828683092Market Growth % (Value)-18.975.836.197.097.81Market Size(Units)445513531558598631Market Growth % (Units)-15.283.515.087.175.52EFL Market Share (Value)66.7569.6670.0670.6169.6370.83EFL (Value)133716601767189119972190Value Growth %-24.166.457.025.619.66EFL (Units)297357372394416447Unit Growth %-20.204.205.915.587.45(Value INR Mn, Volume 000 Units)2002-032003-042004-052005-062006-07Eureka Forbes (value)24.166.457.025.619.66Eureka Forbes (volume)20.204.205.915.587.45Competitor 1 (value)16.676.357.469.7224.05Competitor 1 (volume)12.503.707.1410.0021.21Competitor 2 (value)8.825.4110.265.81-3.30Competitor 2 (volume)6.673.139.095.56-5.26Competitor 3 (value)11.115.714.052.6017.72Competitor 3 (volume)7.143.333.233.1315.15All Others (value)7.054.072.7912.680.00All Others (volume)3.741.801.7712.61-1.93Total (value)18.915.876.147.097.78Total (volume)15.173.615.087.085.61Growth Review- UV( in % Terms)Growth Review - RORO Market2001-022002-032003-042004-052005-062006-07Market Size (Value)1135529>732>1200>2135Market Growth % (Value)-218.181411.43>38.37>63.93>77.92Market Size (Units)1345121156244Market Growth % (Units)-200.001400.00168.8928.9356.41Market Share (Value)100.00100.0033.2734.4337.5043.33EF (Value)1135176252450925Value Growth %-218.18402.8643.1878.57105.56EF (Units)1315213674Unit Growth %-200.00400.0040.0071.43105.56(Value INR Mn, Volume 000 Units)Growth Review - RO2002-032003-042004-052005-062006-07Eureka Forbes (value)218.18402.8643.1878.57105.56Eureka Forbes (volume)200.00400.0040.0071.43105.56Competitor 1 (value)--22.4538.8975.00Competitor 1 (volume)--20.0033.3375.00Competitor 2 (value)--103.39108.3350.00Competitor 2 (volume)--100.00100.0050.00All Others (value)-----All Others (volume)---0.0016.67Total (value)218.181411.43>38.37>63.93>81.25Total (volume)200.001400.00168.8928.9356.41( in % Terms)Growth Review - ResinResin Market2004-052005-062006-07Market Size (Value)206.1404.8724.5Market Growth % (Value)-96.4178.98Market Size(Units)304478745Market Growth % (Units)-57.2455.86EFL Market Share (Value)4.8532.1124.31EFL (Value)10130176Value Growth %-1200.0035.38EFL (Units)8100135Unit Growth %-1150.0035.00(Value INR Mn, Volume 000 Units)Growth Review - Resin2005-062006-07Eureka Forbes (value)120035.38Eureka Forbes (volume)115035Competitor 1 (value)100200Competitor 1 (volume)100200Competitor 2 (value)14.2912.50Competitor 2 (volume)14.2912.50Competitor 3 (value)5.565.26Competitor 3 (volume)5.565.26Total (value)96.4178.98Total (volume)57.2455.86( in % Terms)TechnologiesEFL PERFORMANCEUV MarketRO MarketResin Market Growth in the market has been better as compared to the overall UV market. Growth in the market is better as compared to the overall RO market (Increasing Market Share). Resin technology is at nascent stage. EFL is the major player in this market.

EFL and Competitor 1 are the major players in the market.

EFL is a distant 2nd in terms of market share, with half the sales of the market leader.Apart from EFL, the market is highly fragmented and competitive.

EFL sales in this market are less than all major competitors due to problems with Aquasure product.Consumer ProfilesIncreased Demand for Water Purifiers:Rising income levels and greater awareness has increased demand for water purifiers.

Scope for RO and Resin:The consumer preferences were changing as there was growing demand for tasteless water, thereby enhancing scope of RO and Resin sales in future.Channels2003-042004-052005-062006-07Sales3725405745484994Service5607428881139Sales Growth %8.9112.109.81Share of Sales89.9389.8088.2184.52Service Growth %32.5019.6828.27Share of Service90.9191.0489.7086.09Direct Sales2003-042004-052005-062006-07Sales273292400623Service374871137Sales Growth %6.9636.9955.75Share of Sales6.596.467.7610.54Service Growth %29.7347.9292.96Share of Service6.015.897.1710.36ChannelsRetail2003-042004-052005-062006-07Sales144169208292Service19253147Sales Growth %17.3623.0840.38Share of Sales3.483.744.034.94Service Growth %31.5824.0051.61Share of Service3.083.073.133.55ChannelsIndustrialQ2. Please review the competition across technologies and the marketing strategiesadopted by them.CompetitorsHULPhilipsKent ROIon ExchangeTechnologyResinUVRO-SellingStrong distribution channel, similar to direct selling strategy, outsourced back end support, third party cold calling. Used Print and television commercials which helped consumers to inquireStrong distribution network, Talks with real estate developersFranchise selling End to end water management, customer centric solutionsAdvantagesNo need of gas, Electricity, continuous water supplyRenowned brandThree types depending on convenienceTarget customerMass marketUrbanIndustries, UrbanIndustries, residentsPrice 1,800 8500- 12500 10000- 14500Different price points3. Please analyze the growth of the business divisions in Eureka Forbes and provide direction for each one of them in line with the changing environment and the competitive scenarioMarket Shares of all companies in UV market are constant indicating matured marketShare of Service revenue is increasing compared to sales revenueCompetitors are leveraging on their distribution network and relationships with real estates developers Establish relationships with real estates developers to increase salesShould also use retail channel since the name of aqua guard is well known and increasing growth in retail

Market share in Resin market is less than top two competitorsCompetitors are leveraging on their distribution networkIncrease sales in retails but providing discounts ,warranties etcMarket share (30.33) in RO market is Marginally greater than top two competitorsGrowth rate is RO market compared to competitors and industryShould be Aggressive in promotion through direct and retailer channelShould build relations with real estates developers, Colleges etc

4) Identify the major internal and external challenges identified by Eureka Forbes for water purifiers and advise the corrective course of action.

Internal ChallengesExternal ChallengesFocus on Franchise:Franchise can the source for a major chunk of the companys revenues and profits by pushing low end products through mass maket approach. Training:Direct selling is the source for a major chunk of the companys revenues and profits. Hence, stress should be laid upon training new recruits from lower strata to deal with high end value customers.Use Retail Channel:Retail sales are growing at a fast pace. Hence, this channel could be used to promote and sell low cost products which cater to the middle class customers.Prevention of Channel Conflict:Inter-channel conflicts may be avoided by efficiently defining products for retail and direct selling.

Corrective Actions5. Please design a marketing strategy for sustainable growth, minimize internal cannibalization of brands, technologies while effectively fighting competitionProducts :Developing New UV products which are less dependent on TemperatureDeveloping New UV products which filters dead BacteriaDeveloping RO products with filters which can be easily cleaned and less maintence cost involvedInvest in R&D to develop water filters which can handle different types of impurities and hardness of waterPrice:Price discounts to be used to capture Resin marketPricing should match value proposition for premium and luxury products

Place :Well Known products like Aqua Guard through retail channels to capture maximum marketUse of direct force for Luxury products and these products should be made available at Specific Retail MarketsPromotion:Aqua Guard Promotion should Focus on Eco Friendly TechnologyAqua Sure products also should be promoted targeting rural market

6)Please review the changing distribution profile of water purifiers and suggest the preferred model for Eureka Forbes in terms of level of distribution, multi brand versus exclusive brand outlets (company owned or franchised )Changing Distribution Profile( Exhibit 3)Revenue by SalesRevenue( Sales ) 2003-042004-052005-062006-07Direct Sales3725405745484994Retail Channel273292400623Industrial Division144169208292Total Revenue by Sales4142451851565909Percentage of Total Sales RevenueRevenue( Sales ) 2003-042004-052005-062006-07Direct Sales89.989.888.284.5Retail Channel6.66.57.810.5Industrial Division3.53.74.04.9Growth Rate in SalesRevenue( Sales ) 2004-052005-062006-07Direct Sales8.912.19.8Retail Channel7.037.055.8Industrial Division17.423.140.4Changing Distribution ProfileRevenue by ServiceRevenue( Service ) 2003-042004-052005-062006-07Direct Sales5607428881139Retail Channel374871137Industrial Division19253147Total6168159901323Percentage of Total Service RevenueRevenue( Service ) 2003-042004-052005-062006-07Direct Sales90.991.089.786.1Retail Channel6.05.97.210.4Industrial Division3.13.13.13.6Growth Rate in ServiceRevenue( Service ) 2004-052005-062006-07Direct Sales32.519.728.3Retail Channel29.747.993.0Industrial Division31.624.051.6Channel PenetrationChannel Penetration2004-052005-062006-07Direct Channel: SalesPeople3051.03623.04154.0Retail Channel : Retailers4150.05500.06900.0New Channel : SalesPeople40.040.081.0The Percentage increase in growth rate for number of retailers is higher than the growth rate in increase of sales people, thus we can say that people are preferring to go to retail stores as well.Percentage Growth in Revenue from Direct Sales is Decreasing( It has reduced from 90% to 84.5 % )Although Growth rate for direct selling has reduced but it is still the dominant earner for EFL.

To maintain the high margins, the direct sales channel needed to hire and retain hordes oftalented salespeople capable of creating unique value for customers through the customizeddialogue and demonstrations Retail Division becoming ProminentThe consumer division has seen considerable growth in % revenue earnedfrom the consumer division (6.5% to 10.5%).Consumer Acceptance for Organized RetailOrganized retail growing at a rapid pace (2007-12 CAGR = 51.47%)10 Year CAGR = 36.93% (2007-2017)5 Year CAGR = 23.79% (2012-2017)

Percentage revenue earned through Industrial Division is also graduallyincreasing.TrendChannel Suitability:Direct Selling apt for high end products (Aquaguard, Aquaguard Total) serving luxury and premium class who demand better service experience. However, growing prominence of the retail sector means these products should also be made available at large retail outlets.Retail Selling apt for low end products like AquasureFranchise network could be developed to push low end products through mass market approach for products like SureBoil and PowerBoil

Preferred Model7. After sales service- Aqua-sureYes, the company should bring in the channel partners for servicing of AquaSure products. This is because of the following reasons:

Incentive: Service income would incentivize dealers to promote AquaSure products over the competitor products

Penetration: The company can not provide after sales to the last point if it wants to grow across geographies with its current sales force of around 6500.

Cost/Benefit: Since AquaSure products have been priced lower. After Sales Service income would not be enough to maintain dedicated centers for servicing in each territory.

Supplies: company can capture the surplus of service providers by charging higher price for the supplies used in servicing. This way company would be able to earn service income without bearing the cost of channels.Should there be channel partners for servicingThank you