CASE ANALYSIS:

EUREKA FORBES LTD. : Managing the Sales Effort

GROUP 8 : (Section B&C) SALES

Manukrishnan SR (147)
Munnaza Khan (148) AND
Nilay Waghela (149)
Palash Durugkar (151) DISTRIBUTION
Pradeep (153) MANAGEMENT
 CASE OVERVIEW
2004 revenues of EFL crossed INR 5 billion.
116 sales offices in 92 cities and 5000+ sales reps
Two main company products – EuroClean Vacuum Cleaner(22% of revenue) and AquaGuard Water Purifiers
(64% of revenue).

The sales system  was based on direct selling.

Possible to establish better relationships with customers and avoid sharing profits with
distributors or retailers.

Target Market
Households with monthly incomes in excess of price of its products
(Only 18 million households qualified this criteria in 2004)
25% market penetration  potential for growth

Target Customer
Who?: Housewives
Process: Cold Calling and demonstrations at home
Challenge : Vacuum Cleaners not considered essential item in houses

Alarm bells were ringing 

Sales of EuroClean softened over the past year and a half, sales closure
EFL’s Competitors
rates had decreased substantially while attrition at the EuroChamps level
Selling through distributors and dealers
had shot up.
Advantage: customer store visits for demos and watch the entire
product line at display , and choose based on requirements.
 24 million cold calls

SALES APPROACH 2.4 million product demonstrations

conducted
More than 5 lakh EuroCleans and
Aquaguards being sold annually
According to EFL, direct selling at
home is best

The job of the EuroChamp was to focus solely on

sales

Next three levels in the organizational structure

focused on selling as well as managing the sales
force.

Almost all the company employees had started their

careers at EFL as EuroChamps.

The company faced enormous difficulty in

maintaining homogeneity among the EuroChamps as
they all came from different backgrounds.

Homogeneity was critical to the company as the

EuroChamps were the face of the organization.

THE EURO-CHAMPS
During its early year, EFL recruited young men from middle
class homes, although women joined over the time
Recruits were expected to be Extroverted, enthusiastic
EFL looks for several attitudes and skills in their potential
Eurochamps such as-Minimum 2 years education ,reasonable
spoken communications, interpersonal skills, financially needy
The revenue of the EFL directly depends on the Eurochamps
attitude, skills and motivation
START
PLAN OF ACTION
Meet Group Leaders in morning and discuss with them plan of action
• No. of calls to be made
• No. of demonstrations to be made
• Cold Calls
DAY PLAN
• At Midday, complete activity reports, deposit payments, update
knowledge about product improvements
• Evenings, visit houses for demos and close maximum sales, ending with
another meet.
• Eurochamps worked 6 days a week.
Quotas and Territories
• Annual quota break down into monthly quota
• Requirements are:
60 Product demos ; At least 8 sales per month ; Contact 50 customers per day
• Initially, sales force was small and market was large but now territory conflicts are seen
due to changing demographics
• Senior Representatives claims for popular territory - assigned to new sales reps
• Absence of Formal customers contact database, seasoned rep takes advantage to gain
sales referral and sales lead
 CURRENT
RECRUITMENT
PROCESS
Decentralized
Managers recruiting for
their teams
Tools to reach prospects
Eurochamps are recruited
in a variety of ways by
flyers, billboards, poster
campaigns, and newspaper
ads are used
Campus Recruitments
Which target second-tier
colleges, and also relies on
career fairs, held in major
05
towns
Issues with Eurochamps
– Eurochamps missing an easy sale
– Missing simple cues
– Unclean and damaged demo equipment
– Responding to customer objections is neglected in training
Possible Reasons:
– Improper training from seasoned reps and team leads
01 – This can be due to stringent targets/ lack of time to senior
Friend-get a Friend reps
EFL’s Friend-get a friend – Senior reps have no incentive to train new reps who would
Scheme provides incentives
02 for employees to recruit encroach on their targets subsequently
friends.
Proposed: Centralised Recruitment Process
– Eliminates bias
Own Your Own Bike – Maintains transparency
03 One of EFL’s most powerful – Attracts bigger and better talent pool
recruitment tool is its ‘Own
Your Own Bike – Standardized process
Scheme’(OYBS)
04
 CURRENT
COMPENSATION
PROCESS
Commissions
Components
fixed salary, rent allowance, holiday bonus,
02 Commissions were issued on the basis
of sales made by the EuroChamps and
were provided over and above the salary..
medical reimbursements and travel
reimbursements wherever applicable.. 01 Problems
• Territory conflicts between seniors and juniors
• Possible Reason:
– Saturation in territories
– Reduced growth opportunities within the organization
• High attrition rate
Clubs
04 EuroChamps who sold over 22 units
every month consistently for six months
were inducted into the Silver club for that
year and were rewarded at annual
meetings.

Commissions
Commissions was a variable component and
effective salespeople at EFL were able to
earn commissions up to 70% of their
03
salaries.