Channel & Distribution System

of Nestle India Ltd

Presented By:
Gopal Kumar
Tapabrata Banerjee
Prateek Tiwari

Pedagogy

Nestl's Principle
SKUs
Distribution Channel
Order Delivery System
Counter Analysis
Schemes
Terms of Operations
Distributors Cost
DBs ROI Calculation
DIP Training

Nestles Principle
Nestl 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 &

Nutrition

Beverages

Prepared Dishes & Chocolates &

Cooking Aids
Confectionary

Nestle Milk

Nescafe Classic

MAGGI 2-MINUTE
Noodles

Nestle Kitkat

Nestle Slim Milk

Nescafe Sunrise
Premium

MAGGI Imli
Pichkoo

Nestle Munch

Nestle Dahi

Nescafe Cappuccino MAGGI Sauces

Nestle Bar One

Nestle Bhuna Jeera

Raita

Nescafe Sunrise

MAGGI Healthy
Soups

Nestle Milky Bar

Nestea

Nestea Iced Tea

MAGGI CUPPA
MANIA

Nestle Polo

Nestle Milkmaid

MAGGI Vegetable
Atta Noodles

Nestle Eclairs

Nestle Everyday
Whitener

MAGGI Pazzta

Distribution Channel
Mother
Godwon

Carriage & Forward Agency

Distributor

Retailer

End Customer

Super
Stockist
Whole
saler

Re-Distributor

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 Competitors product
Should handle entire range of Nestle products (Both fast and slow moving
SKUs
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

Nestles Margins
C&F

Super
Stockist

Distribu
tor

ReDistributo
r

Wholesal
er

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 SKUs clubs them with fast
moving SKUs 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 SKUs 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.

Merchandisers 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