Kamdhenu Dairy

Kamdhenu Dairy was one of the biggest dairy unions in India that came into being in 1969. Kamdhenu dairy, with an annual sales turnover of Rs.5250 million, was procuring its milk from the regular suppliers residing in the villages using its own procurement network. The same network was being used to market other dairy products and essential items like fodder and medicine for the cattle to the milk suppliers. The company had recently chosen to sell tea using the same procurement network. The entry of Kamdhenu Dairy into tea marketing was justified as tea was a high margin product and did not require additional resource allocation for marketing in the local rural market. As the marketing of Kamdhenu Dan (cattle feed) and Kamdhenu Ghee had been quite successful, Mr. Samal, the CEO of Kamdhenu, thought the same network could be used to market Kamdhenu tea as well.However, Mr. Samal was worried over the stagnation of tea sales in recent times though initial sales were encouraging. There were already many national and local players who were quite entrenched in the regional tea markets of India. Kamdhenu dairy was neither a national player nor was it a leader in the local market. This forced Mr. Samal to think about the marketing strategy for Kamdhenu tea to achieve success in market penetration in India. Mr. Samal was carefully pondering over possible alternatives to decide how best he can deal with the situation. This case is useful for examining the issues related to market penetration strategy.