Abstract

The case “Nestlé India: Adopting a Regional Approach in its Distribution Strategy” discusses the logistics and distribution strategy of Nestlé India Limited (NIL), the Indian subsidiary of the world’s largest food and beverage company, Nestlé SA. The case gives a brief insight into the distribution structure of Nestlé, and the terms of operations it employed for its intermediaries. It then provides details about how technology helped NIL’s outbound logistics system at NIL. The case moves on to discuss the possibilities of channel conflicts and stresses upon the need for NIL to strengthen its own distribution channel in order to avoid differences between prices of its products in different regions, product positioning, and promotional campaigns. The hyper local cluster approach of NIL is dealt with as well – wherein it divided India into various clusters and then crafted product placements, distribution, marketing, and promotions for each cluster. Suresh Narayanan, Chairman and Managing Director of NIL, was hopeful that NIL would continue to improve its distribution strategies to serve the Indian markets better.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the importance of an efficient distribution and logistics management system in reducing costs and creating value for customers.
• Get insights into the distribution operations and the distribution channels utilized by a leading FMCG company.
• Devise ways to manage relationships with intermediaries.
• Recognize the most common reasons for channel conflict.
• Examine the role played by technology in the outbound logistics of a retail company.

Keywords

Managing Distribution; Distribution Strategy; Relationships with Intermediaries; Hyper Local Cluster Approach; Stock Policy; Sales Forecasting; Target Setting; Technology in Outbound Logistics; Channel Conflict; Holt-Winters model; Demand Forecasting; and Supply Chain Management; Sales force Management; Retail Management; Production & Materials Management