dm project (phase1)

8/20/2019 DM Project (Phase1)

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Project:Distribution Management

Company Name:NESTLE JUICES

Submitted By:

Abeera Butt 11108010

Rabia Khan 11108016

Mishal Javaid 11108017

Ayesha Khalid 11108055

Ahmed Waqas 11108045

Submitted To:

Mr. Umer Mukhtar


2/22

Company Name: Nestle juices

History of Nestle juices:

A well-known brand, FROST was introduced in 1986 and has the larest share o! thecountr"wide #arket$ %ositioned as a cold drink and alternate to cola drinks, its strenth lies in the

con&enience attached to its usae$ N'ST(' )*+'S encouraed b" the consu#er resonse to

N'ST(' ORAN.' )*+' that was launched in 1996, the cateor" o! N'ST(' juices was

e/anded with the introduction o! 0ano-Orane and 0ano !la&ors in the "ear 222$ This has

!urther strenthened the osition o! Nestle as leader in the &alue added3re#iu# drinks #arket$

onsu#er resonse to these new !la&ors has been &er" ubeat and is e/ected to ain !urther$

Now nestle co#an" ha&e launch !ollowin juice brand in %akistan$

Indulge in the pure pleasures of a healthy life!

Nestle brins "ou a rane o! juices that will scintillate "our taste-buds and add &ariet" to suit

e&er" #o#ent$

ISSIN ST"T##NT

“Nestle is dedicated to providing the best foods to people

throughout their day, throughout their lives, throughout the

world. With our unique experience of anticipating

consumers' needs and

Creating solutions, Nestle contributes to your wellbeing and

enhances your quality of life.!

Nestle is not onl" Swit4erland5s larest industrial co#an", but it is also the orld5s (arest

Food o#an"$ The #ission state#ent e#hasi4es on the !act that Nestle roducts are a&ailable

in nearl" e&er" countr" around the world$ here&er one #a" li&e, onl" Nestle can ro&ide the

best and #ost reliable !ood and be&erae roducts to #eet his3her needs throuhout the da",

throuhout the li!e$ 'seciall", eole on the #o&e want to be able to !ind ood !ood where&er


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the" are, whate&er the ti#e o! da"$ The" are o!ten reassured that the" will !ind well-known

brands out o! ho#e$

This state#ent also re!lects the i#ae o! hih 7ualit" roducts that Nestle o!!ers$ Nestle

has the ad&antae that it o!!ers caterers, !ast !ood chains and other restaurants a co#lete rane

o! hih 7ualit" inredients, base roducts and #eal co#onents, as well as leadin consu#er

brands such as Nesca!e$ ualit" is the cornerstone o! the success o! the Nestle o#an"$ '&er"

da", #illions o! eole all o&er the world show their trust in the co#an" b" choosin Nestle

roducts$ This trust co#es !ro# a 7ualit" i#ae that has been built u !or o&er a centur"$

There!ore, the 7ualit" o! the roducts ulti#atel" enhances the 7ualit" o! the consu#ers li!e$

+n addition, the #ission state#ent declares that Nestle has the abilit" to anticiate :;

consu#ers needs and create solutions;$< Nestle has ro&en this abilit" a nu#ber o! ti#es b"

introducin new roducts that were re7uired b" consu#ers$ 'seciall", the launch o! Nestle %ure

(i!e in %akistan ro&es the accurac" o! this !act$ +n %akistan, there was a need !or sa!e and

health" drinkin water and Nestle resonded to this consu#er need b" introducin Nestle %ure

(i!e$

Finall", it is 7uite e&ident that the orani4ation has actuall" i#le#ented its #ission

state#ent in the business ractices that it carries out$ Also, the #ission state#ent has been an

i#ortant uideline !or an" S=* that the !ir# has started and this is ortra"ed b" the success that

each S=* o! Nestle enjo"s$

H$ N#ST%# 'IN# "()#TIN*:

=uildin custo#er relationshi based on custo#er &alue and satis!action is at the &er" heart o!

#odern #arketin$ The two !old oals o! Nestle #arketin is to attract new custo#ers b"

ro&idin suerior &alue and to kee and row the current custo#ers b" deli&erin satis!action$

Nestle de!ines #arketin as>

: A social and managerial process whereby individual &

groups obtains good food and good life through creating and

exchanging products and values+


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N#ST%# B,SIN#SS P(INCIP"%S:

• Nestl?5s business objecti&e is to #anu!acture and #arket the o#an"5s roducts in such

a wa" as to create &alue that can be sustained o&er the lon ter# !or shareholders,

e#lo"ees, consu#ers, and business artners$

• Nestl? does not !a&or short-ter# ro!it at the e/ense o! success!ul lon-ter# business

de&elo#ent$

• Nestl? reconi4es that its consu#ers ha&e a sincere and leiti#ate interest in the

beha&ior, belie!s and actions o! the o#an" behind brands in which the" lace their

trust and that without its consu#ers the o#an" would not e/ist$

• Nestl? belie&es that, as a eneral rule, leislation is the #ost e!!ecti&e sa!euard o!

resonsible conduct, althouh in certain areas, additional uidance to sta!! in the !or# o!

&oluntar" business rinciles is bene!icial in order to ensure that the hihest standards are

#et throuhout the orani4ation$

• Nestl? is conscious o! the !act that the success o! a cororation is a re!lection o! the

ro!essionalis#, conduct and the resonsible attitude o! its #anae#ent and e#lo"ees$

There!ore recruit#ent o! the riht eole and onoin trainin and de&elo#ent are

crucial$

• Nestl? continues to #aintain its co##it#ent to !ollow and resect all alicable local

laws in each o! its #arkets$


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Types of Nestle juice -S),s.:

Name l

Pure range 1222 #l 22 #l

Clear "pple nectar 1222 #l 22#l

(ed *rape nectar 1222 #l 22 #l

Pine "pple nectar 1222 #l 22 #l

ango range 1222 #l 22 #l

Chaunsa nectar 1222 #l 22 #l

*ua/a nectar 1222 #l 22 #l

ango 1222 #l 22 #l

Primary "cti/ities:


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1. Inboundlogistics

2.Operati

ons

3. Outboundlogistics

4. Marketing& sales

5.

0+ Inbound acti/ities:

0ajor raw #aterials o! Nestle orane juices are di!!erent uls o! orane which the" i#ort !ro#

.er#an" and France$ Nestle co#an" et their other raw #aterial !ro# local #arket in %akistan$

Nestle juices raw #aterial include inredients such as !resh !ruit, nectar o! #ano, ale, and

ineale, orane$

1+ perations:

%rocess is an" art o! an orani4ation that takes inuts and trans!or#s the# into outut o!

reater &alue$ Fruit )uice roduction rocedures in&ol&ed in !ruit drinks #anu!acturin deends

on t"e o! juice unit is oin to #ake$ For urose o! this- !easibilit", Nestle roose @ token

juice drink o! citrus !ruit BOraneC, 0ano and ineale$

The t"e o! rocess that Nestle uses is #ake-to-stock as it roduces standardi4ed roducts$ The

rocess is #ultistae as !ew staes are si#ilar !or all juices and !ew are di!!erent$

2+ Process Type:

The rocess !or Nestle )uices is continuous !low rocess as juice, which is li7uid, !lows throuh

the roduction rocess$

3+ utbound acti/ities:


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+n Nestle o#an" the acti&ities that include in outbound loistics are, the" establish their sale

and distributi&e o!!ices in bi cities like Darachi, (ahore, +sla#abad, Faisalabad, .ujranwala etc$

and also hire suitable distributors on areed ro!it #arins$ ho bouht !ro# nestle o!!ice o! the

cit" and tr" to distribute to the each retailers and sho keeer in the cit"$

4+ Ser/ices

o#an" established the custo#er center in each o!!ice in a cit"$ And also i&en toll !ree nu#ber

as a hel line nu#ber which #eans that i! custo#ers !eel an" roble# then the" can contact

throuh our hel line$

Customer "ttitude5&emand Nature

The #ain concern that the consu#ers o! Nestle Orane juices ha&e reardin the juice is related

to the urit" o! the juice$ The !actor and the !eature that the" are #ost concerned with is that is

the juice 122 ure and health"E

The resonses o! rior studies re&eal>

• %eole actuall" think that !ruit juices are not that reat !or the# because o! the !ructose

B!ruit suarC$ The" think that when this !ructose is rocessed its ure suar ets

T'RR+=(' !or their health$ So the solution to the# is that i! the" want to ha&e a taste o!orane the" should tr" ha&in an actual orane because the !iber in the ul skin and

rouhae will slow the absortion o! the !ructose$

• Another rou o! eole suests that instead o! ha&in acked juices one should o !or

natural ones with ul and !iber etc$ The" think that, that is #uch better !or their health$

Onl" when one is in hurr" one should o !or rocessed juices$

• et another reall" in!le/ible lot thinks that juices are #ade !ro# concentrated stu!! which

as er the# is not health" at all$ So the" should alwa"s o !or !resh juices reardless o!

the !act that the" are in a hurr" or not$ And i! the" cannot et hold o! !resh juices, the"

should ski juices altoether$

• As er the sta!! o! Nestle, eole are ettin di&erted towards i#orted drink which

includes orane juices as well$ As eole are ettin #ore health conscious, the" are

willin to send #ore on their health and thus are willin to urchase i#orted juices


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reardless o! the cost !actor$ %eole recei&e Nestle juices to be better than i#orted

juices$

S,PP%6 CH"IN P(C#SS:

C,ST#( S#(7IC# IN P(&,CT &IST(IB,TIN:


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Nestle -8IT9anufacturing System.

:The concet o! )+T is to ettin the riht 7uantit" o! oods at the riht lace and at the riht

ti#e$<

• Raw 0aterial

• Reduce sace re7uire#ents

• ontinuous i#ro&e#ent

• (ower roduction cost

• +ncreased !le/ibilit"

• +ncreased #achine utili4ation

• (ower in&entor" cost

Nestle -Supply Chain anagement.

• .ood sulier relations

• %rice ad&antae !or #aterials

(#SPNSIBI%IT6 ' SC "N"*#(:

• To bu" raw #aterial as an inut$

• To use raw #aterial in econo#ical wa"$

• To sul" all o! the #aterials to the custo#ers$

CH"N#% ' &IST(IB,TIN:

Nestle ure li!e is #akin !ull e!!orts to sul" its roduct to ulti#ate consu#ers$ For this

urose the co#an" uses the con&entional #arketin channels o! distribution to sul" the

roduct$ +n this #ethod co#an" sul" the roduct to whole seller who resond it to retailers

who sul" to ulti#ate user$

+n this #ethod Nestle !eel little consu#tion o! ti#e because retailers cannot directl" aroach

u to the co#an"$

The co#an" also uses the &ertical #arketin s"ste# in which retailers also take sul" !ro#

directl" co#an" resources without contact with whole sellers$

7ertical areting System Con/entional areting System

Pure Life WaterPur Life Water


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.

S#*#NT"TIN:

Nestle has di&ided the whole %akistan in to three 4ones>

• Northern Gone

• entral Gone

• Southern Gone

ajor Products of Nestle distributed by (S;'

• 0ilk%ak

• Nestle ure-li!e

• erelac

• Nesca!e

• Nido

• '&er"da"

&istribution Plan of ultan

There are @ distributors and #an" sub-distributors o! Nestle workin in %akistan$

T


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CH"$"%" group

hawla .rou is the biest distributor o! Nestle in %akistan$ =ut our #ain urose is to discuss

the distribution lan o! 0ultan$ And %NI .rou is situated in 0ultan which is the second

biest distributor o! Nestle in %akistan$

PN& *roup

This distributor is second biest distributor o! Nestle in %akistan$ Nestle co#an" does not

ro&ide an" incenti&e or discount in roduct to distributor but co#an" ro&ide discounts to

custo#ers$ The owner o! %NI .rou is Dhawaja Salahu-d-din$ He is not onl" the distributor o!

Nestle but also the distributor o! *ni-(e&er (td$

Total taret i&en b" the co#an" in the last "ear Iec-212 to %NI was 620illion$

Now co##ission includes all e/enses bear b" the Iistributor$ Nestle o#an" does not

ro&ide an" e/tra e/enses$

PN& ,%T"N97#(7I#$

• Total Area Radius Jk#

• Towns 68BHaraa to Sadi7abadC

• Total e#lo"ees 22

• Fi&e Iistricts BKehari, 0$arh, I. Dhan, (a""ah, DhanewalC

• Total Shos 98L


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• Nestle o&ered Shos M882

• N%( Shos B229C LL82

• N%( Shos B212C @112

• Taret Shos 212 @L22

• Sub-Iistributors L2

• o#bine Kans 6

• Three heelers L

• N%( '/clusi&e Kans 21

• N%( '/clusi&e Order =ooker 21

• o#bine Sales 0en L

There are three departments that are


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o! rest o! the e#lo"ee workin in the distribution which includes storekeeer, sales#en, order

booker, sul" #en$

Their hierarch" is i&en blow>

Iistribution 0anaer 1

Suer&isor

Sul" 0en @

Store Deeers

Sales 0enIeli&er" 0en 11

De" accounts lare roceries Bo$bC 1

De" accounts lare roceries Bs-#C 1

hilled dair" Bs-#C

Order =ookers Bli7uidC 6

Order =ookers BowderC J

hole Sale Bo$bC


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(S;' &istribution House:

-Po


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3'%

22%"'%

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M(L) P*) +,+RD* C+R+L*C N(DO

./(C+S O0/R1 N+SC*!+

&istribution channel:

%ath or 5 ieline5 throuh which oods and ser&ices !low in one direction B!ro# &endor to the

consu#er C, and the a"#ents enerated b" the# !low in the oosite direction B!ro# consu#er

to the &endorC$ A distribution channel can be as short as bein direct !ro# the &endor to the

consu#er or #a" include se&eral inter-connected Busuall" indeendent but #utuall" deendentC

inter#ediaries such as wholesalers, distributors, aents, retailers$ 'ach inter#ediar" recei&es the

ite# at one ricin oint and #o&es it to the ne/t hiher ricin oint until it reaches the !inal

bu"er $

&istribution Channel of (S;':

Accordin to distribution #anaer o! RSF distribution the" ha&e distributed the 0ultan reion

into !our cateories$ hich includesE

• De" accounts

o (are roceries

hole-Sellers

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Retailers

)ey "ccounts:

De" accounts are the er#anent bu"ers o! RSF distribution$ The" ha&e the hihest sale

turno&er a#on all the cateories$ Tarets are i&en to the ke" accounts er #onth$ On achie&in

these tarets di!!erent rewards are i&en to the ke" accounts$ 1L shos are include in ke"

accounts like !ood !esti&als, Shanri-(a cuisine etc$

%arge *roceries:

(are roceries are the second larest sale ro&ider to RSF distribution$ +t includes 2 shos

like NN =akers, 0ehboob =akers, and %rince Ieart#ental Store etc$

$hole9Sellers:

There are 92 whole seller which also enerate a reat art o! sale o! nestle roducts$

(i7uid related roduct whole sellers are J2 and %owder Food related roduct whole sellers are

@2

(etailers:

L118 shos are under the retailers and %NI also does not ro&ide roducts on credit to the#$

(S;' are pro/iding ser/ices T00

0edical Stores J2 shos

%otential =u"ers 1J2 shos

Types of &istribution

There are two t"es o! distribution that %NI does$

Handling &istribution


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&istribution

Handling &istribution:

%NI rou ro&ide roducts to sub-distributors that is called handlin distribution$

&istribution:

+t is that distribution that ro&ides roducts directl" to custo#ers$

rder booing methods

RSF distribution in 0ultan !allow two t"es o! order bookin #ethods

Pre9order booing

Spot selling

Pre9order booing:

+n reorder bookin the order booker &isit the #arket one da" be!ore the deli&er" and the &er"

ne/t da" deli&er" is disatch$ On order booker usuall" co&er J2 shos a da"$ And the ne/t da" a

&an #ake the deli&er" to those shos$ One &an co&ers the one order booker$

Spot Selling:

+n sot sellin the sales#en take the roducts with the# in the distribution &an and ro&ide the

roducts to the shokeeer without an" reorder #ostl" nestle ure li!e and "ourt are sold in

this #ethod$

Transportation Plan

Total 7ans ; $orers $oring in ultan City

'or Po


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Kans J

Ieli&er" 0en J

Order =ooker J

'or %i=uid:

Territories M

Kans 6

Ieli&er" 0en 6

Order =ooker 6

'actories in Paistan

There are two !actories that are #akin roducts o! Nestle$ The" are located in Sheikh-u-

%ura Bnear (ahoreC and the second one is in Dabir-ala Bnear 0ultanC$ These !actories ro&ide roducts to %NI .rou$

Sale of PN&

Sale o! %NI rou !or last #onth was Rs$62#illion

A&$ sale 3 #onth 229 Q82 tons

A&$ sale 212 QLJ9 tons

Commission policies of Nestle:

The Nestle ro&ided J co##ission to distributor and it is !i/ called !i/ed #arin

Credit policies of Nestle:

%NI rou ro&ide credit to lare rocer" and ke" accounts with #a/i#u# a#ount o! Rs$122,2223Q with a li#it o! M da"s$

Pro/ide (efrigerator:

The" %ro&ide Re!rierator to custo#er whose sale is$ RsQ 62,222 er #onth !or li7uid$


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B8#CTI7#S ' N#ST%#@S &IST(IB,TIN C#NT#(S ( $"(#H,S#S:

There are three #ain objecti&es o! Nestl?s distribution centers$

• 0eetin the tarets

• Iistribution at Riht ti#e

• At Riht lace

Storage at


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Ad&ertise#ent is a tool to introduce the roduct in the #arket$ To increase sales and build an

i#ae in the #ind o! consu#er co#an" ad&ertise their roduct in di!!erent wa"s, as !or as

Nestle ure li!e is concerned co#an" use>

Tele&ision

Radio News %aer

=ill =oard

Hoardin etc$

So#e ti#e co#an" also #akes !ree sa#lin, held stalls at di!!erent rora#s like Health

0ela$

%ure (i!e5s co##unication strate" is weak as the" !ollow e#otional black #ailin$ +n

ad&ertisin the" show e#otional !eelins to their custo#ers$

Problems of distribution face by &istributor:

Followin are the #ajor roble#s !ace b" nestle in their distribution$

• ost o! workin caital is increasin ha&e not enouh !und to send on distribution

throuh which cause a hurdle to e/and the distribution round$

• (aw and order roble# is a!!ectin &er" badl" the distribution rocess like strikes etc

• +n!rastructure roble#s like bad roads, are also a!!ectin the s#ooth distribution,

• 'cono#icall" instabilit"$

•

.o&t$ olicies are instable which also a!!ect the distribution olicies o! nestle$• All e/enses are bearded b" distributor$

Solution to the problems

• The roble# could be o&erco#e b" increasin the workin caital$

• Nestle co$ should ro&ide so#e e/enses to their distributors$

• (aw and order situation should be &er" stron$

• 'cono#ic conditions should be stable$

•

Securit" uards should be ro&ided !or each &an$

Conclusion:

A!ter stud"in and discussin the distribution o! Nestle$ e co#e to the conclusion that

distribution o! %NI rou is &er" stron co#are to their co#etitors$ The" are ro&idin the


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roducts o! nestle in each and e&er" lace which the" ha&e tareted$ e can easil" !ind Nestle

!ro# an" sho$ =ut we ha&e also !ound so#e weakness related to distribution$ No e/tra bene!its

are ro&idin to the e#lo"ees e/clude salar" thats wh" the" are de#oti&ated$ And the" do not

ro&ide an" credit to retailers or whole sellers$ +! the" ro&ide credit their sale #a" be increases$

dm project (phase1)

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