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 TECHNOLOGYPULLIKKANAM, 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 TECHNOLOGYPULLIKKANAM, 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 BACKUUMCorporate Care Division

3 GU350/450 ACorporate 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,

SH-VR PROXIMITYREADER,

SH-1 PROXIMITY READER

Readers

7 SH-VR PROXIMITY READER,

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

Cards

8 Conventional Fire Detection System,

Addressable Fire Detection System

Fire Alarm Systems

9 VCM110, VCM111, VCM211, VCM201,

VCM310, VCM311, VCM401

Surveillance System -

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 CHAIRMAN

MANAGING DIRECTOR

SENIOR VP

FINANCE

SENIOR VP

DIRECT SALES

SENIOR VP

RETAIL

SENIOR VP

INTERNATIONAL

MARKET

SENIOR VP

TECHNICAL

SENIOR VP

HUMAN RESOURC

E

SENIOR VP FACTORY

Structure of Main Division

SENIOR VP

VP

Branch Manager

Head of Customer Response Centre

Team Leader

Group Leader

Sales Representative

NU

MB

ER

OF

EM

PL

OY

EE

S D

EC

RE

AS

ES

Deputy General Manager

Regional Sales Manager

Area Sales Manager

Senior Divisional Manager

Division Sales Manager

Deputy Divisional Sales Manager

General Manager

STRUCTURE OF SUPPORTING DIVISIONS

DIVISIONAL GENERAL MANAGER FINANCE

SENIOR MANAGER FINANCE

MANAGER FINANCE

ASSISTANT MANAGER FINANCE

EXECUTIVE FINANCE

SENIOR VICE PRESIDENT FINANCE

VICE PRESIDENT FINANCE

GENERAL MANAGER FINANCE

OFFICERS FINANCE

SUPERVISORS FINANCE

SENIOR MANAGER MARKETING

MANAGER MARKETING

ASSISTANT MANAGER MARKETING

EXECUTIVE MARKETING

OFFICERS MARKETING

SUPERVISORS MARKETING

DIVISIONAL GENERAL MANAGER MARKETING

SENIOR VICE PRESIDENT MARKETING

VICE PRESIDENT MARKETING

GENERAL MANAGER MARKETING

SENIOR MANAGER MARKETING

DIVISIONAL GENERAL MANAGER MARKETING

SENIOR MANAGER HUMAN RESOURCE

MANAGER HUMAN RESOURCE

ASSISTANT MANAGER HUMAN RESOURCE

EXECUTIVE HUMAN RESOURCE

OFFICERS HUMAN RESOURCE

SUPERVISORS HUMAN RESOURCE

DIVISIONAL GENERAL MANAGER HUMAN

RESOURCE

SENIOR VICE PRESIDENT HUMAN RESOURCE

VICE PRESIDENT HUMAN RESOURCE

GENERAL MANAGER HUMAN RESOURCE

SENIOR MANAGER TECHNICAL

MANAGER TECHNICAL

ASSISTANT MANAGER TECHNICAL

EXECUTIVE TECHNICAL

OFFICERS TECHNICAL

SUPERVISORS TECHNICAL

DIVISIONAL GENERAL MANAGER TECHNICAL

DIVISIONAL GENERAL MANAGER TECHNICAL

SENIOR VICE PRESIDENT TECHNICAL

VICE PRESIDENT TECHNICAL

GENERAL MANAGER 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)

Rupees

(2004-05)

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

Deferred Tax11,98,48,588 9,36,05,722

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 29 th 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.