So you could do it with VLOOKUP but its a little bit more complex then that when you are looking to add a dropdown list.

Its difficult to explain without seeing what your working with but step 1 is to add the drop down list.

To add a list you select the cells that you want to have the option to use a drop down list.
Go to the 'Data' Tab
Select Data Validation
Select List from the Allow list.
Then you Select your source.

If you want PM me your email address and I can prob whip up a demo to show you better what to do.

What version of excel are you using?