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 Asias 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 worlds 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 2 3 4 5 6 7 8 9 10 Aquaguard booster Aquaguard Hi flo Aquaguard classic Aquaguard Compact Aquaguard Total Gold Nova Aquaguard Total I Nova Aquaguard Total NF Aquaguard Total RO Aquaguard Total RO smart Aquaguard Ultra Ultra Violet Ultra Violet Ultra Violet Ultra Violet Ultra Violet Ultra Violet Membrane Membrane Membrane Membrane Direct Direct Direct Direct Direct Direct Direct Direct Direct Direct 7940 9190 7190 7190 9590 8350 14500 14500 9150 7500

Retail Models 1 2 3 4 5 6 Forbes Aquaflo Forbes Crystal Forbes Designa Forbes Spring Fresh Forbes AquaSure- Storage- Jr Forbes AquaSure On Tap Ultra Violet Ultra Violet Ultra Violet Membrane Resin HP Resin HP Retail Retail Retail Retail Retail Retail 5600 7250 6750 14000 1800 690

DSA + Multichannel 1 2 3 4 5 6 Forbes AquaSure Storage Sr Forbes AquaSure AquaSure Sr with Iron remover AquaSure On tap Forbes AquaSure Ultra Forbes AquaSure Cool Cello model Resin -HP Resin -HP Resin +HP Resin Iodine UF candle Resin HP DSA+ Multi 2750 DSA+ Multi 1800 DSA+ Multi 3490 DSA+ Multi 690 DSA+ Multi 3950 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. 1 2 3 4 5 6 7 8 9

Product Euroclean Ace Euroclean Futuro Euroclean Supremo Euroclean Turbo Euroclean Ultima Euroclean WET & DRY Forbes Easy clean Forbes Trendy Cherry Forbes Trendy Steel

Channel Direct Direct Direct Direct Direct Direct Dealer Dealer Dealer

Price (RS) 6990 6990 7990 3990 23500 9690 2195 5750 5750

SI No. 1 2 3 4 5 GD 930

Product

Channel Corporate Care Division Corporate Care Division Corporate Care Division

BACKUUM GU350/450 A WD -225 Z POWER 3 IN - 1 Corporate Care Division 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. 1 2

Product AP 2000 Euro Geneus

Channel Direct Direct

Price (RS) 6400 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. 1 2

Product Home security Solution I SEE I SPEAK

Price (RS) / Type 9990 3850

3 4 5

SECURI T - LINK PC585, PC 1565, Detector Access SY200NT2 SY200NT4 KANTECH PC 4020 FT/KT control System

10500 Intrusion Alarm System Controllers

CONTROLLER, CONTROLLER, PROXIMITY KT 200,

SYRIS SH-VR SH-1

PROXIMITYREADER, Readers PROXIMITYREADER, PROXIMITY READER PROXIMITY READER, Cards PROXIMITY READER, PROXIMITY READER, PROXIMITY READER, PROXIMITY READER, PROXIMITY READER, PROXIMITY READER, PROXIMITY READER Fire Detection System, Fire Alarm Systems

SH-VR SH-1 SH-2 SH-2KP SH-4 SH-5 SH-6 SH-7

Conventional

Addressable Fire Detection System

VCM110, VCM111, VCM211, VCM201, Surveillance VCM310, VCM311, VCM401 CAMERAS MONITORS TIME LAPSE

System

10 11

SAM 9, SAM 14M, SOS 2W, SAM 12, STR 24/48, STR 960, STR 961

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 Forbess 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 worlds 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. b. c. d. Technical Research and Development Manufacturing Team Manufacturing Division

e. f. g. h. i.

Logistics Euro Value Human Resource Management Marketing 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 INTERNA TIONAL MARKET

SENIOR VP TECHNIC AL

SENIOR VP HUMAN RESOURC E

SENIOR VP FACTORY

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

Head of Customer Response Centre

Team Leader Group Leader Sales Representative

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

EXECUTIVE MARKETING

OFFICERS MARKETING

SUPERVISORS 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 HUMAN RESOURCE EXECUTIVE HUMAN RESOURCE

OFFICERS HUMAN RESOURCE SUPERVISORS HUMAN 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 TECHNICAL

EXECUTIVE TECHNICAL SUPERVISORS OFFICERS 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 customers 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. provides a Eureka Forbes provides ample scope for learning for the employees through its SELF LEARNING PROGRAM (SLP) and 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 staffs 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 familys 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, needsbenefit, 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 managers 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 Sales and Other Income Profit before Depreciation Less : Depreciation Profit before Tax Less : Provision for Current, Fringe Benefit and Deferred Tax Profit after Tax

(2005-06) Rupees 6,33,57,03,128 42,37,45,077 8,41,60,633 33,95,84,444 11,98,48,588 21,97,35,856

(2004-05) Rupees 5,50,24,35,405 38,14,49,368 6,00,52,303 32,13,97,065 9,36,05,722 22,77,91,343

Less: Prior year's Tax adjustments (Net) Profit after Tax and prior years' adjustments Add : Balance brought forward from previous year Amount available for appropriation APPROPRIATIONS : Interim Dividend Tax on Dividend Transferred to General Reserve Balance carried to Balance Sheet DIVIDEND:

NIL 21,97,35,856 10,47,50,156 32,44,86,012 8,52,00,000 1,19,49,300 9,83,50,000 12,89,86,712

20,05,927 22,57,85,416 20,88,09,940 43,45,95,356 24,75,00,000 3,23,45,200 5,00,00,000 10,47,50,156

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 15 th April, 2005. Consequently, the total paid up capital of the company as on 15 th 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 companys 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. ii. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; 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 EFLs 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 SAPs 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 organizations 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 reengineering 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 companys 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 informations about the complaint of the product/need. Get the nature of the complaint fully and pass this informations 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 informations 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 whats 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 generations 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, lots of organizations are focusing and investing money on these areas and it would creates the competition.