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It’s an incredibly common approach to marketing when you don’t have a marketing plan to provide you with structure.
Your plan doesn’t need to be 50 pages long and filled to the brim with complicated or expensive strategies. You don’t necessarily have to embrace all those time consuming social media options after all – that’s often the biggest relief for a client when we are developing their Marketing Plan together! Pakistan is the sixth most populous country in the world, with an estimated population of over 160 million, 25 growing at a rate of more than 1.8 percent per annum. With an almost 50 percent contribution, livestock is by far the most important subsector in agriculture. Despite being the most lucrative livestock product, milk production is the least commercialized enterprise in the agricultural economy. As a food item, milk (both milk and liquid milk equivalents) is second only to cereals in the level of per capita consumption in Pakistan ,32 which nationally is 190 litres.33 Province-wise, per capita consumption stands at 246 kg in Sindh, 132 kg in Punjab , 86 kg in North-West Frontier (NWFP) and 108 kg in Baluchistan .
Due to rising inflation and high poverty levels, the majority of Pakistani consumers are price conscious. Milk markets in Pakistan can be classified into three categories: rural, urban and international.
A significant proportion of the milk produced in rural areas is consumed at source within the hamlet or village, either through farmstead consumption or in some cases, direct sales by the farmer to the neighbourhood. Urban consumers in Pakistan consume an estimated 9–12 million litres of milk every year.
As depicted in Figure 2, the urban milk marketing chain, the producer has relatively more control over the supply because the consumer is easily accessible and is also willing to pay a high price for milk.
Milk production and marketing in Pakistan is exclusively dominated by the informal private sector, consisting of various agents, each performing a specialized role at the relative link in the supply chain. Subsistence farmers constitute the majority of dairy farmers in the country and are responsible for 70 percent36 of the milk produced. Due to lack of proper management practices and poor breeding, animal production tends to be very low. Production and consumption of milk in Pakistan are affected by seasonal fluctuations (Figure 4) that are at relative odds with each other.
Smallholder dairy farmers in Pakistan are unorganized and mostly carry out production and marketing in isolation from each other.
For smallholders, milk sales are a way of regular cash flow, and the livestock owned by them constitutes an invaluable asset.38 But in the absence of financial services, such as insurance and credit, they do not have a financial recourse in times of emergency, such as livestock disease or mortality. On the other hand, in their capacity, middlemen also fill the gap of essential support services, such as provision of credit and veterinary care. The primary reason behind the unavailability of cold chain facilities is the operating expense.
By regulating the price of milk, the Government plays a significant role in milk marketing.39 Because the law generally gives broad authority to the local government in setting foodstuff prices, the specific law followed can be different from one locality to another within a province (see Box 1 for a description of t he two common laws used in regulating milk prices). Under the law, the Provincial Food Department can declare various commodities, including milk, to be foodstuff.
When the committee re-sets a price, a notice is circulated among various government agencies and other stakeholders, such as the provincial secretary, the district and town Nazims (mayors), district and session judges, the chief of police, the Information Department, the Food Department, the Agriculture Department, the rationing controller and the official gazette.
Interestingly, in some instances, the local government has used the wrong law while re-setting a price. Preamble: Whereas, it is expedient to provide for price control and prevention of profiteering and hoarding. Provided that, if a person convicted for an offence punishable under this subsection is again convicted for such offence, the term of imprisonment awarded shall not be less than one year. The imbalance between gains in production and output costs has an inverse affect on farm productivity because farmers are barely able to recover their production cost. Currently, there are more than 25 dairy processing plants, producing UHT milk (predominantly), butter, cream and lassi.
Dairy processing units collect milk from smallholders situated in the far-flung rural areas of Punjab.41 This has led to a saturation of supply in the province. Moreover, factors such as lack of cold chains, a fragmented farm base and distance to dairy farmers affect the processing operations. The Government and international donors have been very supportive of the processing industry. Other examples of government and donor championing are the mega projects initiated to improve dairy development; however, almost all of them were designed to immediately benefit medium- to large-scale farmers with minimal practical interventions for smallholders. Despite the extensive government support in the form of loans,42 subsidies, tax breaks and project assistance, many fear the renewed interest in corporate dairy may be short lived.
Currently, the dairy sector has received unprecedented investment from the Government and international donors. The project titled Milk Packaging Project in Central and Southern Districts of the Northwest Frontier Province (NWFP) is an innovative initiative of NWFP’s Livestock and Dairy Development Department. The project was designed to create groups of smallholders, with the ultimate objective of sustainably reducing poverty in remote areas of central and southern districts through increased livestock productivity via the provision or establishment of milk-marketing channels. Within the project, dairy farmer groups have been formed in selected villages with the purpose of promoting organized milk production and marketing (see Box 2 for terms of membership). The project was initiated with three partially operational associations collecting an average of 550 litres of milk per day. However, in a period of just two years, intensified farmer interest in the area led to an expansion of the project and resulted in the number of associations increasing to 36, with a total representation of 873 members and daily collection of 7 275 litres.
A compulsory 50 paisas per litre of profit must go into the association’s savings fund. The purchase price of milk by the association will be based on mutual recommendation of the farmer association and the Livestock Department. The project is to provide support services, including veterinary care, breed improvement, training of member farmers on livestock management and introduction of improved fodder variety and feed supplements. Based on this tremendous success, the provincial government is planning to build a milk-processing plant near these localities. Lessons learned: A critical lesson is that organizing local farmers around a profitable initiative is a possible goal to achieve within the current context of the Pakistani dairy industry.
The project objective is to promote women’s role in livestock development by creating a cadre of community livestock health workers. In addition to training women livestock extension workers, the other major component in the project design was the provision of credit for enterprise development through links with financial institutions.
The project is relatively new, limiting the lessons until it is further along in implementation.
Smallholder dairying in Pakistan has inherent weaknesses and is confronted with various threats. At the national level, the following issues will need a concerted response from both the Government and the private sector to enable the participation of smallholder dairy farmers in dairy markets and to help them competitively supply expanding consumer markets. Issue 1: Lack of proper livestock management practices and inaccessibility to support services leads to low animal productivity. Issue 4: The local government is authorized to fix the price of milk on the pretext that it is an essential commodity. Issue 6: Despite proximity to milk-deficit regions, including Central Asia and the Middle East, Pakistani producers do not export their products.
Issue 7: Currently, most equipment for storage and processing is imported from Western countries.

Often, lessons learned from countries with different socio-economic environments are presented for replication in Pakistan, resulting in unanticipated outcomes. Marketing: All the activities that are involved in moving products from producers to consumers. Marketing chain: The flow of commodities from producers to consumers that brings in economic agents who perform complementary functions with the aim of satisfying both producers and consumers. Marketing agents: Individuals, groups of individuals or organizations that facilitate the flow of dairy products from producers to consumers through various activities, such as production, purchasing, processing and selling. Milk producers: Rural subsistence farmers, rural market-oriented farmers, commercial dairy farmers and city and peri-urban milk producers.
Milk collectors: Dhodhis , contractors, village milk collection centres and dairy cooperatives (MPOs). Retailers: Milk shops, peri-urban farmers-cum- dhodhis , traditional dodhis , rural subsistence and market-oriented farmers and retail shops.
40 Collection operations in Sind are problematic due to socio-economic constraints, such as security and road conditions.
41 To ensure profitability, the processing industry is forced to purchase milk at low prices from far-flung areas. 42 Most local investors have borrowed heavily from state-run banks to set up dairy processing.
43 Experience shows that large-scale dairy processing, not a very cost-effective enterprise, is only profitable if the company has investments in other lucrative yet low-cost products, such as Nestlé, whose biggest source of cash flow in Pakistan is its bottled mineral water. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.
It doesn’t matter what industry you are in, having a marketing plan provides you with vision and focus and these lead in turn to integrated actions. On the contrary, developing a marketing plan for your business will actually cut down on the long list of possible marketing tools and strategies that you can implement. Implementing it is another which is why when you choose me as your Business and Marketing Coach, you can also opt to continue to work with me after your marketing workshop so you have continued accountability and a sounding board for new ideas and opportunities. The majority of the national livestock herd is distributed in small units throughout the country. According to a FAO study on milk marketing in Pakistan in 2003, 80 percent of the milk in the country was collectively produced by rural commercial and rural subsistence producers.
Only 7 percent of the dairying farms in the country could be considered large, with more than 50 animals. Similarly, the three marketing chains in Pakistan are rural, urban and processed marketing chains, as the following explains. The remaining 30–40 percent is marketed through an intricate marketing chain, consisting of multiple layers of intermediaries. To satisfy some of this demand, milk is produced in urban and peri-urban areas of the country, accounting for 5 percent and 15 percent of the total milk production, respectively. These are usually owned by market-oriented farmers and can be classified into two general groups, distinguished by herd size. Hence, in many instances, farmers in the urban milk marketing chain integrate production and marketing functions in their operations.
According to industry estimates, only 3–5 percent of the milk is marketed through formal channels as processed milk.
The remaining 97 percent is produced and marketed in raw form by informal agents in the marketing chain. Milk production is associated with the availability of green fodder and is at its maximum between January and April, hitting a low from May to August.
Similarly, smallholders do not have ready access to credit that enables them to improve their enterprise, such as the addition of improved marketing infrastructure. Drawing on their monopolistic role, middlemen can exploit farmers by paying low prices, executing binding sales contracts and not passing on gains when prices are seasonally high in response to lower supply. But agents in the marketing chain in Pakistan rarely have access to cold storage facilities; consequently a major portion of their milk is lost.
For instance, the purchase cost of a 1 000-litre capacity cooling tank is approximately 300 000 rupees ($5 000), a sum well beyond the reach of a small farmer. A District Price Review Committee regularly reviews milk prices; it can set different prices for different localities in the district.
For example, in the district of Narowal, the Punjab Essential Articles (Control) Act, 1973 is cited even though milk is not listed in its commodity schedule. On the contrary, the prices of some essential inputs have increased by 100–200 percent in the past five to six years (Table 3). With growing inflation, this price imbalance recently prompted many well-established large farmers to shut down operations; it also has discouraged new investment in dairy production. In the past two to three years, the private sector has shown a keen interest in the dairy industry, leading to large-scale investment in refurbishing old plants and, in some instances, setting up new processing units.
The competition has resulted in price wars in collection zones and the establishment of additional processing units by some of the major corporations, such as Nestl é.
This is evident in the 2006–2007 budget in which the Government announced numerous subsidies and tax breaks for the dairy-processing industry, including exemption of sales tax on packaged milk and the subsidized import of processing and other equipment.
These include projects such as the Pakistan Dairy Development Company and the Livestock and Dairy Development Board.
This apprehension is based on several underlying factors: i) scarcity of supply and increasing prices of input for smallholders, ii) inability of processors to collect milk required due to transport and cold chain problems, iii) reliance of processors on limited and undiversified products,43 iv) lack of sustainable farmer-development policies and v) the history of dairy processing in Pakistan (in the 1970s and with the help of the Asian Development Bank, as many as 22 processing units were initiated but failed in a few years due to similar problems). However, apart from a few exceptions, most of the programmes are geared towards the development of medium- and large-scale dairy farmers. Project activities include technical and management support services in the form of breed improvement, animal health, feed enhancement, management training for women, training of village extension workers and farmers, establishment of milk collection and processing units, and developing marketing links. Upon formation of a farmer association in a targeted village, a small milk-collection centre equipped with a cooling tank is set up. These initial associations received four cooling tanks and two power generators, which they operate and manage. However, such an initiative requires comprehensive measures instead of a limited focus on production. UNDP is bearing 82 percent of the project cost, with the private partners providing the remainder in the form of cash and kind. The University of Veterinary Animal Science, a leading public sector institute, provides technical support in training the master trainers and 3 600 women livestock health workers.
Moreover, it tends to be biased in favour of the large corporations: animal productivity will be enhanced in the milk sheds accessed by the two corporate partners, thereby increasing the supply available only to them.
Women in dairying households are responsible for most activities related to animal management, including feed, shelter and some veterinary care.
However, the project thus far has had difficulties in finding a partner in the finance industry for such support.
A large criticism so far has been the negligible contribution provided by the corporate partners, despite the long-term economic benefits headed their way.
However, the sector can build on its strengths and use opportunities to satisfy the increasing demand. This includes tax incentives for collective marketing and a subsidized provision of inputs, such as veterinary services, feed and electricity.
However, the prices of inputs are not regulated in the same manner and keep increasing with the growing inflation.

Improved market information is a must to facilitate effective planning and investment by all stakeholders. For example, an international corporation recently mobilized medium- to large-scale farmers to buy high-yielding cattle from Australia.
Examples of market agents include farmers selling dairy products, retailers, wholesalers, dairy cooperatives, importers and exporters. Pakistan Smallholder Dairy Production and Marketing , Ministry of Food, Agriculture and Livestock Livestock Wing, Islamabad, Pakistan.
This has even led Engro to also shift its operations to Punjab by setting up an additional processing unit in the province.
In these areas, farmers do not have access to the urban fresh milk retail market, which tends to be more profitable for the farmstead. This also was the practice during the 1970s and led to the failure of most dairy processors, leading to massive defaults and closures. Without a plan to work to, it’s unlikely that you will have clarity on what marketing strategies and tools to implement in your business.
When you are clear on your vision for your business, the ideal clients you’d like to work with and the services you’ll be offering (all core components of a succinct marketing plan) it becomes so much easier to recognize the watering holes where they are likely to be found and hence, the communication channels you’ll need to utilize to reach them.
About 55 million landless or smallholder farmers produce the bulk of the country’s milk supply. The peri-urban producers account for 15 percent of the total production, whereas urban producers contribute 5 percent.31 Annex III shows the distribution of milk as it moves along the various links in the overall supply chain.
From July 2006 to November 2007, dairy products34 worth 2 320 million rupees (US$38.6 million)35 were imported.
Figure 1 elaborates the rural milk marketing chain and the price of milk at each node in the chain. Because this quantity is not sufficient to meet the entire urban demand, the deficit is met by rural producers.
The following is an overview of the informal and formal channels as a way of imparting a description of the opportunities and problems associated with dairying enterprise in Pakistan. The following characteristics typically define the informal production and marketing channels. Alternatively, milk consumption is low during the winters and is at its peak during the summer due to heightened preference among consumers for products such as lassi, yogurt and ice cream. Where it occurs, collective marketing enables individual farmers to reach more markets and results in increased revenue. According to an Asian Development Bank report an estimated 15– 20 percent of the total milk production in some areas is lost due to the unavailability of cold storage. The committee consists of representatives from the livestock department, dairy farmers, milk retailers and consumers. The price set by districts studied for this case study report varied between 16 and 30 rupees per litre. Hence, many processors have been eying options to reduce or eliminate their reliance on individual smallholders for their supply.
The following two case studies assess the impact of recent support programmes on smallholder dairy farmers. These measures range from encouraging farmers to form groups by providing support in the areas of technology transfer, market links and enterprise management. The project area is limited to the milk-collection zones of each of the two private companies involved. Hence, they will enjoy the major long-term economic benefits through a minimal investment in an otherwise social sector initiative.
This implies that new and innovative ways to tap into credit facilities need to be identified, particularly those that link the timing for repayment of loans with the biological cycle of the specific animal species, in this case dairy cows and buffalo. Based on the current situation and an analysis of smallholder dairy producers in Pakistan, the following national and regional strategic initiatives for public and private stakeholders are recommended. In other instances, MPO members can play the role of middlemen by linking producers to markets in return for fees and trade concessions. Due to the heat and climate stress, many of the animals perished, which resulted in a loss of over 100 000 rupees ($1 666) per animal. Value addition opportunities in dairy sector of Pakistan in a national and global perspective.
Development of the Livestock and Dairy Development Board for a dairy development strategy in Pakistan by Khalili, M. Proceedings of the FAO-China Regional Workshop on Small-scale Milk Collection and Processing in Developing Countries by W. Concept paper: Provision of milk chillers to farmers for collection, preservation and marketing quality milk. Establishment of milk collection, preservation and marketing centre for the supply of quality milk to the public in Quetta. Action plan for livestock marketing systems in Pakistan by Social Sciences Institute, NARC. You’re far more likely to end up “binge marketing” – reacting to fires in the business rather than responding to opportunities. 28 The higher growth in the livestock sector has been mainly attributed to growth not only in the headcount of livestock, which is commercially important, but also in milk production. More than 90 percent of the marketed milk is collected and sold unprocessed through the informal market by a multi-tiered layer of marketing agents. Where the Government supplies electric power, it is expensive because dairy farmers do not get subsidies similar to the ones given to agricultural farmers on equipment (such as tube wells). Two of the favoured options being considered are i) vertical integration of activities by piloting corporate farming, an idea new to the national dairy practices; and ii) providing additional support services to medium- and large-sized farmers in return for selling bulk quantities of fresh milk to the processors. The CELDAC project has trained a cadre of women extension livestock workers despite the stereotypical belief that women cannot be formally trained due to the social barriers imposed on them. Value addition opportunities in the dairy sector of Pakistan in a national and global perspective. This latter category of farm is either owned and operated by a progressive farmer individually or is part of the peri-urban cattle colonies. Similarly, an international donor promoted the use of automated milking without considering the almost impossible break-even numbers on equipment costs because cheap labour is readily available for such operations.
A review of milk production in Pakistan with particular emphasis on small-scale producers .
A methodology for characterizing dairy marketing systems , International Livestock Research Institute ILRI. Despite decades of oversight by the Government, Pakistan is the fifth-largest milk producer in the world.
29 According to the 2006 livestock census (Table 1), 30 milk production had increased by 36 percent since 1996.

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