Eureka Forbes: Responding to Changing Market Dynamics
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Case Code: BSTR467 Case Length: 15 Pages Period: 2011 - 2013 Pub Date: 2014 Teaching Note: Not Available |
Price: Rs.400 Organization: Eureka Forbes Industry: Water Purifiers Countries: India Themes: Market Agility |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
In June 2014, consumer durable company, Eureka Forbes Limited (Eureka Forbes), reported that for the financial year (FY) ended 2013, it had a 36 percent market share in the Reverse Osmosis (RO) water purifier segment. The company was facing stiff competition in the rapidly growing RO segment from Kent RO systems, which had cornered a 30 percent market share.
Eureka Forbes had been the market leader in the water purifiers segment ever since it launched its Aquaguard range of water purifiers in 1984. Over the years, the company had launched several products in the water purifier segment. For the fiscal year ended 2012-2013, the water purifier business accounted for 50 percent of the company's revenues. During the same period, the company was a market leader in the ultraviolet (UV) purifier market with a 70 percent market share. However, competitors such as Kent RO were eating into its market share by underlining their RO water purification technology. In addition to this, Eureka Forbes was also facing competition from other emerging players such as HUL, Nasaka, and Ion Exchange.
Some industry experts opined that Kent's success in the RO market was attributable to its aggressive advertising. The publicity had helped the company rise from obscurity to become the second largest water purifier company in India, and to transform itself from a Rs. 0.25 billion company in 2005 to an industrial giant worth Rs. 6 billion in 2014.
Industry experts stated that Eureka Forbes was losing its market share to Kent since it was slow in responding to changing industry dynamics. On the other hand, its competitors were launching several products to cater to the different needs of consumers in the water purifier market. Some industry analysts opined that the company's reliance on direct sales was also not working in its favour. They felt that cold calling as a marketing strategy was not effective with the emergence of gated communities. The company also did not focus much on generating sales through retailing channels, while Kent and HUL's water purification products were more visible on retail counters. Commenting on this, Suresh Goklaney (Goklaney), executive vice chairman, Eureka Forbes, said, "We believe that direct sales is our core and we would persist with the strategy."...
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