Channel & Distribution System

of Nestle India Ltd

Presented By:
Gopal Kumar
Tapabrata Banerjee
Prateek Tiwari
 Pedagogy
• Nestlé's Principle
• SKUs
• Distribution Channel
• Order Delivery System
• Counter Analysis
• Schemes
• Terms of Operations
• Distributor’s Cost
• DB’s ROI Calculation
• DIP Training
 Nestle’s Principle
Nestlé is based on the principle of
decentralization, which
means each country is responsible for the
efficient running of
its business - including the recruitment of its
staff.
 Nestle India
Milk Products & Beverages Prepared Dishes & Chocolates &
Nutrition Cooking Aids Confectionary
Nestle Milk Nescafe Classic MAGGI 2-MINUTE Nestle Kitkat
Noodles
Nestle Slim Milk Nescafe Sunrise MAGGI Imli Nestle Munch
Premium Pichkoo
Nestle Dahi Nescafe Cappuccino MAGGI Sauces Nestle Bar One

Nestle Bhuna Jeera Nescafe Sunrise MAGGI Healthy Nestle Milky Bar
Raita Soups
Nestea Nestea Iced Tea MAGGI CUPPA Nestle Polo
MANIA
Nestle Milkmaid MAGGI Vegetable Nestle Eclairs
Atta Noodles
Nestle Everyday MAGGI Pazzta
Whitener
 Distribution Channel
Mother
Godwon

Carriage & Forward Agency

Distributor
Super Stockist

Whole saler
Retailer Re-Distributor

End Customer Retailer

 Selection of Channel Partners
 Capital Investment
 Varies from region to region
 C & F Agent :3-5 Crores
 Super Stockist:60-80 Lakhs
 Distributor:25-30 Lakhs
 Relevant experience
 Prior experience in FMCG sector is preferred to save on training expenses
 Distributor should not be dealing in Competitor’s product
 Should handle entire range of Nestle products (Both fast and slow moving
SKU’s
 Infrastructure
 Godowns / Storage space with appropriate refrigeration as per product
needs
 Delivery vehicles
 Salesmen
 Order Delivery System
DBSRs take the order in morning and delivery
takes place in evening or next day morning by
delivery boy.
 Counter Analysis
Types of Counter
• Super Market
• Small Grocery Store
• Big Grocery Store
• Convenience Store
• Paan Plus
• Chemist
 Nestle’s Margins
C&F Super Stockist Distributor Re-Distributor Wholesaler Retailer

1.5% 2-2.8% 5.8% 3.8% 1.5-2% 7-8%

 Schemes
Secondary schemes: Promotional schemes to
consumers & Trade Partners
Such as free packs for
Consumers,gifts,bundling,price off etc.
For retailers:Coupon,Bulk discount,Additional
Margin,Free packs
 Terms of Operation
Sales force of distributor is divided into 3 heads namely:
1. Milk Products
2. Chocolates
3. Other products
• All the 3 teams visit the retailers once in a week on different
Days

• Sales force is complimented by a weekly visit to the district

by the sales executive of the company

• Idea is to supplement the lags in the distribution by

wholesaler and in certain specific cases to push extra stock in
the market
 Terms of Operation(contd..)
Credit Policy

• Distributors are termed as Cash Distributors because

the company charges the distributors before the stock
is delivered

• Company has connected the distributor online and

the transactions happen online

• The distributor sells goods on credit; the period of

credit ranges from 1-2 week

• The wholesaler allows discount of 1% on cash

payment (policy followed by the wholesaler)
 Terms of Operation(contd..)
Stock Policy

• As per the company regulations the distributor is supposed to

maintain a stock of 3 weeks which in monetary terms equals to
Rs. 30 lakhs for the distributor.

• Stock is formalized by the company; the dealer can negotiate on

3-4 end days, the stock policy is formed for the month

• Distributor to push in slow moving SKU’s clubs them with fast

moving SKU’s for the retailers

• Company DUMPS significantly on the distributors, the distributor

has to mange the supply by the company
 Terms of Operation(contd..)
Lead period

• Lead periods in providing stocks to the dealers differs from the

SKU and quantity ordered
• Some SKU’s like dairy products are delivered correspondingly
with taking order but some are sent from the warehouses
• A higher quantity ordered has to be replenished from the
Warehouse

Return Policy

• Company follows a policy of return when the product has past its
expiry date, damaged or has a defect
• Replenishment is done with cash and happens at the end of
every six months

Return on Investment

• Company does not give any guarantee to the distributor

 Terms of Operation(contd..)
Storage policy

• Distributor maintains Cold Storages and Deep

Freezers for thestorage of the products

• Distributor has to bear all expenses pertaining to

Infrastructurerequirements
Sales Force

• The remuneration and all other expenses for sales

force areborne by the distributor.
 Merchandiser’s jobs
• Presentation to potential clients

• Researching Costs, new design ideas, images &

graphics.

• To observe the visibility of the product of an

outlet in window, banner, poster
 DIP Training
Training programs for C&F agents which includes
modules on:
• Nestle Quality System
• Good Warehousing Practices (GWP)
• Good Distribution Practices

Major aspects of the training program are;

1. Stacking as per norms
2. Good Warehousing practices
3. Accounting
4. Handling of Bad goods
5. Temperature control for chocolates and dairy products
Thank You