Marketing Research on Tea Industry in India

Topics: Tea, Green tea, Caffeine Pages: 5 (1544 words) Published: October 21, 2012

Siddhartha Lodha PG-A

History of Packed Tea in India
The history of tea dates back to 750-500 BC. Researchers have found that the cultivation and consumption of tea has been taking place since more than a thousand years. However, commercial consumption of tea started with the British rule. It has now become a part of the Indian culture. Tea laid it’s foundation in India at the turn of the 20th century, when the major emphasis was on the exports of Tea. Earliest reference to a domestic market came from MacKay of Brooke Bond. Equipped with capital and premises, Mackay settled down to serious business. Mackay clearly identified his objectives as to pick up teas suitable for Brooke Bond blends at home, rather than getting them at London and to create and make profitable, a packet and blended tea trade in India and generally in the East. In the early 20th Century, much of India was orthodox and all foreign habits were considered alien and against Indian ethos and culture. In fact, later, when tea was officially promoted by the Tea Market Expansion Board, strong religious pressure groups launched antitea campaigns against tea drinking. The domestic market was very small and hardly able to sustain. Packing material, mainly caddies and cardboard cartons, were imported the UK and the tea was floor-blended and hand-packed. Sales totalled around 17,000 lbs. and the whole operation produced a loss without inclusion of overheads and other costs. It therefore needed a great commitment to persevere this kind of a venture. Backed by the promotion and propaganda efforts of the Tea Market Expansion Board that became the Indian Tea Board through the pioneering efforts of Brooke Bond (more about this later), a strong demand was created for tea as a beverage and the Indian masses avidly took to tea. However, much of the fallout of this phenomenon went to loose teas because of the price factor, so we see a strange development in the packet teas trade in India. In the early years, i.e. the first three decades of the century, the trade was predominantly in the hands of foreign companies and the incipient demand was centered on a small segment, introduced to tea through the Western industrial civilization. The early brand names were based on colors — Red label, Violet label, Green label. The first sale record in India was in April 1903 and the entry reads: Red Label ... 720 lbs. Violet Label ... 300 lbs. Green Label …180 lbs.

The fact that Brooke Bond Red Label recorded 720 lbs. was a very auspicious augury for this famous brand, which attained dizzy heights in later years to become the largest selling brand in the world. The early entrepreneurs of packet tea marketing realised that if the trade had to expand, the purchase price of the tea had to be more affordable for their Indian consumer and the tea had to be better presented. In India however, the main consideration was price, one that the lower economic section of the Indians could afford. When the brands were first launched in the first decade of the century, the cost of the tea in the packet was roughly 60% of the total price. Despite this, prices were considered high. But the demand had been created and was snowballing — opening the floodgates to loose teas, which were at least 20% cheaper than the corresponding tea in packets. Opinions on the worth and prospects of the internal business seemed gloomy. One opinion was that “Indians can never become tea-minded”. This was based on the English custom of brewing tea in pots, using a long leaf — a leisurely and luxurious habit. It is interesting to note that very early in the century, the marketers of packet tea recognised that if tea had to be made popular among Indians, it had to be presented differently, keeping in mind the Indian cooking habit of boiling. So dust tea was born. ‘Kora’ was the first brand to be introduced by Brooke Bond in paper form packets. The real expansion of the...
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