HP Milkfed: Marketing Strategy for Dairy Products

In March 2022, Girish Thakur, marketing officer of Himachal Pradesh State Co-operative Milk Producers Federation Limited (HP Milkfed), was developing a strategy for marketing milk and other dairy products. HP Milkfed had been catering to the dairy requirements of government agencies and army establishments but faced a problem regarding surplus procurement of milk. Out of a daily average procurement of 70,000 litres of milk, the co-operative sold around 45,000 litres to government and institutional clients, while the remaining 25,000 litres were sold to the national milk grid at a loss of INR 1 per litre. With a view to selling this surplus to consumers, Thakur set out to conduct research on the dairy industry in the state of Himachal Pradesh, looking at the main industry players and the roles of distributors and retailers. Having identified the lack of a distribution system and poor consumer brand awareness as the main challenges facing HP Milkfed, Thakur applied his mind to crafting a strategy to enter the consumer market. What organizational and market parameters should he consider before planning a distribution channel from scratch? How should he design a distribution strategy to make a successful entry into the consumer market segment?