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21
History of marketing in India
Hari Sreekumar and Rohit Varman
Introduction
Contemporary concepts and practices of marketing, and the ideologies which impel these,
originate from the social and economic contexts of the West, particularly the United States
and Europe (Ellis et al., 2011; Eckhardt et al., 2013). As a consequence of this Western
dominance, the marketing discipline became permeated with values such as individualism
and rationalism (Ellis et al., 2011). The Eurocentrism of much of marketing theory has
resulted in knowledge pertinent to contexts such as India being overlooked (Varman and
Saha, 2009; Varman and Sreekumar, 2015). In an early paper that appeared in the Journal of
Marketing, Westfall and Boyd, Jr. (1960) suggested that marketing practices in India were not
sufficiently ‘developed’, and called for a ‘modernization’ of marketing in India. In response
to such criticism, marketing academics in India adopted theories and practices of marketing
from the West, especially the US. Not surprisingly, these theories and practices were often
far removed from the realities of the Indian economy and consumers (Varman et al., 2011).
This is particularly ironic because India, like many other parts of the world, has a rich history
of markets and marketing. There is clearly a need to bridge this gap in our knowledge and
understanding about the rest of the world. This chapter on history of marketing in India
addresses this lacuna in the discipline.
While India as a nation-state is a relatively new entity, the broader geographical region
referred to as ‘India’ in historical work comprises a large area that includes present-day
Pakistan, Bangladesh, Afghanistan, Sri Lanka and even some of the south-east Asian countries
such as Myanmar. Moreover, the region has a history of trade and commerce dating back
more than 2,000 years. In providing an account of marketing history of such a vast area
over such a long period, one faces the challenge of disentangling marketing history from
the history of trade and business in general. In attempting to determine what constitutes
marketing history, we have relied on Jones and Tadajewski’s (2014) suggestion that marketing
history includes advertising, retailing, marketing channels, product design and branding
and consumer behaviour, but is not limited to these. We attempt to use the present state of
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marketing as a touchstone to look at business and trade events in the past, taking care to avoid
an anachronistic reading of marketing history (Fullerton, 2011).
Periodization is one of the vexing problems that historians face. It is common to divide
Indian history into ancient, medieval and modern periods. We concur with Thapar (2002)
that these classificatory terms are arbitrary, more so given the emphasis on marketing activity.
However, for purposes of simplicity and narrative ease, one has to follow some kind of
periodization of events. We follow a chronological order in describing India’s marketing
history, by dividing the time period under consideration into three phases. In the first part,
which we call the ancient and medieval period, we describe marketing practices from 2,000
years ago to the 17th century, when the British East India Company started operating in India.
The colonial encounter changed the marketing system and consumption in considerable
ways, and in the second part of our chapter we detail these changes. In the third part on the
post-colonial period we briefly touch upon some of the developments in marketing after
India’s independence in 1947. We believe that this classification takes into account the points
of inflection in India’s society and economy with respect to market activities.
bodies of traders and artisans that played important roles in this era. In a nagaram there were
kadai (shops), angadi (markets) and perangadi (a big market in the inner city) (Mukund, 2012).
Accordingly, unlike village exchanges that were primarily determined by patron–client
relationships or the Jajmani system, transactions in a nagaram were market-based. By the 12th
century ce most nagarams were associated with merchant guilds that played a significant role
in spreading markets to different parts of the region. Merchant guilds helped traders who
did long-distance trade to share their risks, provide credit and to tide over short-term needs.
Guilds were particularly useful for sellers to ward off physical dangers as they travelled through
unprotected parts of the country in groups. The temples were another important integrative
institution that attracted donations of gold, money, land and livestock, and contributed to the
spread of markets in south India (Mukund, 2012). While chetti (merchants) gained legitimacy
by donating, temple authorities circulated these donations in the local economies to support
commercial activities. In this period, temples were also important institutional buyers of
large quantities of oil, rice, lentils, spices, fruits, vegetables, flowers and aromatic substances
(Mukund, 2012). Hall (1977) provides further evidence of the important economic role of
temples in his analysis of inscriptions from the Chola period mentioning distribution of gold
and livestock grants to the local shepherds. Thus, religion and markets were intertwined and
strengthened each other in medieval India.
The present-day marketing system uses ports and harbours as points of contact with the
outside world for the export and import of goods and commodities. This system depends
on strong connections between the ports and their hinterlands, which is facilitated by local
governments and nation-states. However, the port towns of the medieval period carried on
selling and trade in a somewhat different manner. Hall (2010, 114) suggests what is referred
to as a ‘networked heterarchy’, wherein the regional ports that were located near the coast
would network with multiple other regional centres rather than with one omnipotent centre.
Relationships between merchants thus operated across maritime boundaries, and even
transcended language and cultural barriers, pointing to the prevalence of an unexpected level
of what is now referred to as ‘globalization’. This period also witnessed expansion in trade
with other parts of Asia and Europe and contributed to increase in sales of food grains, spices,
cotton and luxury goods such as silk, ivory and beryl (Mukund. 2012).
As in the contemporary world, urban centres were major sites for marketing transactions
in early India. Cities could be port towns such as Puhar in south India or inland centres of
religious or commercial importance such as Benares in north India. For rich descriptions of
cities, we can refer to Kautilya’s Arthasastra, considered to be a major ancient Indian treatise
on politics, society and the economy. The Arthasastra is dated around the Mauryan period
(320 to 185 bce), and describes a city that is highly planned and ordered, with selling places
for dealers in perfumes, flowers and toiletries and also storage areas for forest produce and
other items (Chattopadhyaya, 1997). In contrast to the planned, orderly city of the Arthasastra,
we have the city of Puhar which is described as a bustling urban centre with market squares,
boulevards and streets where people belonging to different professions lived all together,
constituting a hive of activity (Chattopadhyaya, 1997). The city is also characterized by an
abundance of goods, a profusion of activities and the accompanying noise and cacophony,
reminiscent of the bazaars and fairs of modern-day India. Mukund (2012) describes how
gold, food grain, toddy (an alcoholic drink, made usually from palm sap) and textile sellers in
the 10th century ce markets used flags of different colours to inform buyers about different
qualities of goods sold. Thus, urban centres in early India were major centres of commercial
activity in which markets and marketing flourished.
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Hari Sreekumar and Rohit Varman
There were, however, some limitations. The spread of markets to rural areas was restricted
because most Indian rulers accorded limited attention to physical infrastructure for long-
distance trade (Tripathi and Jumani, 2007). Merchants had to move in convoys because of
dangers of theft and violence. This was further complicated by political fragmentation of
the region for large parts of its history which meant that there would be several provincial
rulers and local chieftains who could extract taxes and duties for goods passing through their
territories. In the absence of political integration and market fragmentation, prices of goods
varied widely (Banerjee, 1999). In another account showing us some of the dysfunctional
aspects of the marketing system in the 14th century ce, the courtier Barani describes what is
assumed to be the city of Delhi, with its marketplaces, grain merchants and sellers (Sarkar,
2011). Barani decries the presence of swindlers, hoarders and cheats in the city against
whom action has to be taken, which tells us that the darker side of markets, with illegal
trade and selling practices, was very much a concern even in this period (Sarkar, 2011).
Occupational and living patterns in cities also contributed to particular forms of marketing
activity. For example, scholars suggest that during the Mughal king Akbar’s time (later 16th
century ce), the city was primarily seen as a place where craftsmen lived (Vanina, 1989).
The preponderance of skilled craftsmen and artisans in cities, along with the domination of
agricultural activities in villages, led to a marketing channel with a one-way flow of goods
from villages to cities, since villagers could not afford to purchase the luxury commodities
made by the city craftsmen (Vanina, 1989). In later years, with the advent of early forms of
industrial production, during the 18th century, this one-way flow of goods was partially
altered with the manufacture of mass-produced commodities in the cities, which were
cheap, enabling affluent villagers to purchase them.
With the spread of markets across much of urban India by the 16th century, merchants
became increasingly powerful entities. Even in periods of powerful dynasties such as the
Mughals, merchants continued to exercise influence in political decision-making and in
funding wars of territorial expansion and courtly rituals (Bayly, 1983). Knowledge about
trade and markets was complicated and certain caste groups, such as Khattris from Punjab,
Agarwals, Oswals and Maheshwaris moving out of the dry lands of Rajasthan, started to
become powerful in this period. Rulers devoted considerable attention to attracting rich
merchants and competition among kings often took the form of tax exemptions (Timberg,
2014).
Our analysis of the sites of marketing exchange in early India reveals that marketing
transactions happened in networks involving multiple actors such as merchants, itinerant
sellers, craftsmen and farmers from villages, who exchanged or sold goods at locations such
as urban centres, ports and cities. Goods were transported from producers to consumers
through land by caravans, or through sea routes. Many of these ports and urban centres had
some connections with the hinterland, and also with far-flung ports in foreign countries.
Cities, with their myriad activities, businesses, cacophony and confusion were very much
a part of the marketing system, providing a variety of goods to residents as well as visitors.
Systems of exchange
Given the lack of communication and control systems, we can safely assume that a centralized
economy could not have existed in early India. Even in later periods such as the Mughal
era (1526–1857), the emperor’s hold over the economy, especially in the hinterlands, was
tenuous (Moosvi, 1985). A common currency or coinage was difficult to implement in such
conditions, and unsurprisingly, barter was a major mechanism of selling and trade. Goods in
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kind were also used as means of payment. Inscriptions from the time of Rajendra Chola, in
the 11th century ce, talk about the equivalence of various items for trading. Furthermore, rice
appears to have been a standard of value, which could be used to purchase other items such
as spices, sugar, salt and luxury goods (Hall, 1977). Historians suggest that coinage emerged
quite early in India, around the first millennium bce (Ray, 1985). However, the state did not
have a monopoly over the issue of coins, with multiple types of coins in existence at the same
time, and local coins often being used in transactions (Ray, 1985). Early coinage facilitated
redistributive activities such as land transfers, and purchase by wealthy patrons of items that
were required for local temples, such as lamps and aromatics (Hall, 1999).
There is evidence in the literature of the prevalence of multiple currencies or modes of
exchange in the same region. The Bengal Sultanate of the 13th to 16th century ce had two
such currencies – a high value and relatively pure silver coin called tanka, which was used
for trade and transactions with the government, and lower value cowry shells that were
used for day-to-day transactions (Deyell, 2010). Furthermore, these currencies were serviced
by an elaborate financial industry comprising mint masters, money-changers, brokers and
accountants. In another instance of multiple currency circulation, in the Bahamani kingdom,
in addition to the royally sanctioned coinage, the coins of the Vijayanagar kingdom were
widely used, with recalcitrant money-changers even going to the extent of ignoring royal
decrees prohibiting circulation of these coins (Wagoner, 2014). In his analysis of a later
period, under Mughal rule, Habib (1969) describes the use of both cash and kind to pay for
taxes imposed by the government. Habib (1969) takes a negative view of monetization and
taxes, and argues that they led to impoverishment of the countryside and a one-way flow of
resources to the capital region. Moreover, he contends that monetization could have led to
adverse consequences for peasants by exposing them to widely fluctuating prices over which
they had no control.
An increase in market activities due to long-distance trade created a need for credit notes
or hundis issued by individual traders (Tripathi and Jumani, 2007). These credit notes were
safer and easier to carry from one place to another as they could be cashed in distant places.
Hundi was employed to make remittances, raise loans and to finance movement of goods
from one place to another. Like any other era, this was a period in which market economy
relied heavily on a moral economy for its functioning. Trade and credit relations over long
distances were dependent on conceptions of caste, status and mercantile honour (Bayly,
1983; Ray, 2011). Market disputes were primarily settled through caste-based organizations
and market committees, and excommunication of a buyer or a seller was the most potent
way of punishing offenders. A large group of traders were Marwaris, who belonged to
Rajasthan, and had developed extensive networks of institutions to support each other in
their market operations. Marwaris developed institutions for easy loans, access to markets
and created messes for market traders to get food and rest when they travelled. These messes
were informal training schools and sites for networking for new traders – Timberg (2014)
equated them with contemporary business schools for training in marketing and business
management.
In sum, we can conclude that, while the use of standardized coins was prevalent in early
India, it was limited in scope. Multiple coins, some of them locally issued, competed with
the royal issues. There were also other means of exchange such as cowry shells and hundi.
Coinage could have led to the establishment of market economy relationships between
people, but some historians also suggest that they facilitated redistributive activities such as
purchase of items to be used in local temples. Payments in kind and barter of goods coexisted
with coins, especially in hinterlands and villages outside the metropolitan areas. Credit notes
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Hari Sreekumar and Rohit Varman
facilitated conduct of trade over long distances, and had the advantage of being safer and
easier to transport, compared to coins or other valuables. Overall, we get the picture of a
society that relied on a variety of means in order to engage in the process of buying and
selling.
Pre-Mauryan period Middle of 1st millennium BCE Appearance of urban centres in north
(Ray, 1985) India, waning of sacrificial ritual leading to
surplus cash for consumers, early coinage
Mauryan period 320 to 185 BCE Early trade routes through land and sea
(Roy, 2012) to transport natural resources, Arthasastra
composed with normative prescriptions
on business, selling, and trade
Satavahana period First century BCE Emergence of external trade with
(Ray, 1985) Mediterranean regions, formation of
artisan guilds specializing in making
different goods
Chola period 850 to 1279 CE Specific sites such as nagarams established
(Hall, 1975) for marketing activity, temple as site of
economic redistribution, use of flags to
advertise, barter a dominant form of
exchange
Mughal period 1526 to 1757 Emergence of powerful merchant
(Heesterman, 2004) communities, specialized production of
goods in cities, one-way flow of goods
from villages to cities, indigenous credit
instruments such as hundi, occurrence of
famines and agrarian crises
Initial encounter with 1498 to 1857 Early encounter with the Portuguese,
Europe and early (Robins, 2006) middlemen such as banians play an
colonial period important role, specialized local markets
such as hats, bazaars and gunges,
early advertising in newspapers, Indian
manufacturing capabilities diminish,
railways increase market penetration
Later colonial period 1857 to 1947 The British Crown takes over Indian
(Authors’ periodization) administration from the East India
Company, the spread of British
consumption goods such as tea and
coffee, adoption of Western medicine
and consumption practices, consumer
anxiety at displacement of indigenous and
‘Indian’ consumption goods and habits
Post-colonial period 1947 to present day Centralized planning and state protection
(Authors’ periodization) for industry in the post-independence
period, low levels of consumer demand,
economic liberalization in the nineties,
emergence of Indian language
advertising, media proliferation and rise
of consumer culture, increasing economic
inequality
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Hari Sreekumar and Rohit Varman
about city life corrupting dharma (religion) and posing a threat to the way of life sanctioned
by the scriptures (Chattopadhyaya, 1997). Upward mobility using consumption was possible
during this period, with Durga (2001) describing how members of a lower caste could move
up through gift-giving to temples.
In summary, our analysis of marketing activity in the early period shows that littoral towns
played key roles in the economy as bustling sites of buying and selling. Major urban centres
could be located inland too, but were often near the coast, or on the banks of a navigable
river. The city was a major nerve centre of marketing activity with bazaars, shops, artisans
and numerous others providing goods and entertainment to consumers. For ordinary
consumers in the early period, many common present-day items such as spices and sugar
were luxuries. Wealthy consumers had no such constraints, and consumed many luxury
items. Famine and scarcity were common, and severely affected the lives of the poor. The
ambiguity surrounding excessive consumption existed even in this period, with the city and
its ostentation seen as potentially corrupting influences.
Colonial period
The early encounters of India with European colonizers started in the 16th and 17th centuries
with the Portuguese. Later, by the 18th and 19th centuries, Britain had entrenched itself as
a colonizer in India. The colonial encounter had wide-ranging effects on Indian industry,
economy, marketing systems and consumption habits. In this section of the chapter, we
provide an overview of the markets and consumption during the colonial period.
employed by the Company, and oversaw gomastahs, dalals and pykars who were subordinates.
The gomastah was a salaried agent of the company, advancing money to dalals and pykars, who
in turn provided these funds to producers of material such as weavers. The dalal was a broker
who connected the producers and buyers of goods such as cotton cloth. The dalal received
a small commission on successful transactions. Pykars purchased on behalf of the Company
and were also independent traders and financiers (Chakrabarti, 1994). The influence of these
middlemen can be understood from Robins’s (2006) description of Nabakrishna Deb, one
of the banians of Calcutta, who developed close relationships with Robert Clive (a powerful
official of the East India Company) and Warren Hastings (the first Governor-General of
India), and managed to amass a huge fortune. Chakrabarti (1994) suggests that far from
being willing and pliable accomplices of the Company officials, these intermediaries often
took advantage of the Company’s ignorance of local conditions by engaging in tactics such
as surreptitiously marking up prices, violating contract agreements and using advance
funds procured from the British to make and sell cloth to the French, Dutch and other
European traders. Merchants also played a critical role in the marketing of grain, a crucial
commodity. Datta (1986) highlights the powerful role played by intermediary merchants in
the channelling of grain from the countryside of Bengal to the urban areas. The merchant
was motivated by two priorities that included maintaining control over the supply chain of
grain so that the maximum amount could be sold or hoarded, and maximizing profit through
manipulating the price differentials that existed between urban and rural areas (Datta, 1986).
The supply chain of grain from its producers to the market was mediated by a network of
agents which was so complex that even the colonial government could not infiltrate it and
directly deal with the peasants (Datta, 1994).
There are conflicting interpretations of the role of byapari or merchants in this period
(Bayly, 1983). In the accounts of the East India Company, the role of the merchant, while
significant, was hardly a positive one. Accordingly, motivated by almost inhuman avarice,
merchants often played the toxic role of exacerbating shortages of food grains and converting
them into full-fledged famines. Datta (1994) describes the shocking ways in which merchants
profited from grain scarcity, going to the extent of denying supply to food-deficient areas in
order to profit by hoarding and high prices. Furthermore, the officials of the East India
Company often worsened crisis situations by engaging in their own private grain trade, again
to the detriment of consumers. Some other historians such as Bayly (1983) offer a nuanced
view of merchants. Accordingly, merchants were embedded within the social context and
their identities as pious credit-worthy Hindus were woven around conceptions of religion
and credit. While making profits, merchants were also seen to be agents who contributed to
the economy by supporting peasants, producers and artisans, and made donations to temples
and royal courts.
With the spread of trade by the 18th century, local markets started becoming increasingly
complicated and specialized. Datta (1986) describes three types of markets that engaged in
local trade. These were haats, bazaars and gunges, and they differed in terms of the days of
operation, types of trade and traders, and the commodities sold. The hats were markets that
operated only on certain days, and were used by petty vendors and traders, who put up
markets in available open spaces, and used flags to mark them. Bazaars were daily markets,
but on certain days they could even be located in the hats. Besides established shopkeepers,
there were also petty vendors who traded in these bazaars. In gunges, grains and other essentials
were sold in bulk and this was a wholesale market. However, these gunges could have hats and
bazaars located within them and goods available on retail as well (Datta, 1986).
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Hari Sreekumar and Rohit Varman
stage process evolved in the movement of rice and paddy to the market – first, the peasant
sold it to itinerant traders or the village haat from where it reached the larger markets, and
then on to regional sites of consumption (Dutta, 2012). However, this did not produce a
unified national market of goods and there were considerable differences across rural and
urban markets in terms of prices and availability of goods (Banerjee, 1999).
To summarize, during the colonial period, intermediaries or merchant middlemen played
an extremely critical role in the marketing system. British company officials and independent
traders were dependent on these middlemen. Some merchants engaged in unethical practices
such as hoarding grain in order to maximize profits. The marketing system was highly
decentralized with a profusion of markets of different types. The advent of new technology
such as the railways opened up large parts of the country to the producing regions, and led
to some consolidation but failed to create a national market with a high level of uniformity
of prices and availability of goods. Local institutions such as the bazaar continued to play a
critical role by linking up numerous small producers to end consumers.
policy by closing mints managed by these rulers that financed local consumption. This also
contributed to a liquidity crunch and losses for several native mercantile communities, and to
a decline in consumption for the poorer sections of the population (Bayly, 1983). Historians
further argue that the colonial state made only limited attempts to standardize markets across
the country. There were differences maintained across landlords and traders, and corporate
trading agencies, instead of acting as price levellers to help consumers, reaped the benefits
arising out of multiple prices of the same commodity (Banerjee, 1999).
In the period prior to the 18th century, there was a limited demand for European goods
(Tripathi and Jumani, 2007). Local cotton was considered superior and Indian exports were
dominant, with calicoes or Indian textile goods enjoying considerable price advantage in
the British market. However, the industrial revolution and mechanization of production
in England created a complete reversal of the situation in the early 19th century, with India
being reduced to an exporter of raw cotton and an importer of cotton fabric (Bayly, 1983).
While the rural population consumed coarse cotton fabric that was locally produced and
was outside the market economy, the richer classes in urban India switched to British
cotton goods in the 19th century. Habib (2006) notes that there were specialized centres of
production for cloths of higher quality such as calico and muslin, and textiles with complex
weaves and dyes. Moreover, Habib (2006) suggests that such textiles enjoyed the patronage
of the richer classes in Indian cities, and experienced a sharp decline in demand as the result
of the import of cotton goods from Britain. There were similar declines experienced by jute
handloom weavers and woollen manufacturers in different parts of the country with the
onset of cheaper industrially produced output from England that was adopted by the richer
consumer groups. This popularity of foreign goods among the elite became a particular point
of contest in the nationalist struggle when anti-colonial mobilizations in the late 19th and
early 20th centuries particularly focused on the rejection of foreign goods. British cloth was
actively targeted by nationalists and was rendered dirty and impure (Bayly, 1986). A defining
feature of the rejection of refined foreign cloth was support for the consumption of coarser
homespun cloth, which became a symbol of resistance and national identity (Trivedi, 2003).
The arrival of the colonial powers led to wide-ranging changes in the consumption
habits of Indian consumers. The British to a great extent, and the French and Portuguese
to a limited extent, imparted some of their consumption habits to the Indian populace. As
Robins (2006) points out, the East India Company’s motives were primarily economic, and
achieving political domination was a means to these economic ends. The connections formed
by trade, sometimes voluntary and often coerced, introduced many new consumption goods
into India. As Robins (2006, 109) eloquently puts it, ‘mixed with slave grown sugar from
the West Indies, the afternoon cup of tea perfectly expressed Britain’s emerging empire of
consumption’. These new consumption goods evoked mixed reactions. While they gained
widespread acceptance among consumers, they also evoked anxiety at the displacement of
old consumption goods and habits, anxieties that have outlasted the colonial experience and
continue even into the 21st century. For example, Guha (2008) in his analysis of a colonial
era literary work describes an exchange between a villager visiting Calcutta and a resident
of the city. The villager expresses displeasure at the city residents who dress like foreigners,
consume food prepared by Muslims (considered a taboo among religious Hindus), drink
brandy and even read literature mainly in English and Persian. The city dweller seeks to
alleviate the villager’s anxiety by reassuring him that the Hindu way of life was still prevalent.
Guha’s (2008) account informs us about the cultural anxiety evoked among Indians,
especially Hindus, by changes in consumption and lifestyle. Western medicine, which was
introduced initially for the benefit of Europeans, quickly spread to the Indian population,
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History of marketing in India
leading to indigenous medical systems such as Ayurveda coming under considerable strain
(Panikkar, 1992). Meat eating, more problematically consumption of beef, became prevalent
among some of the urban Hindus, leading to perceived shortages of milk, which was seen as
a healthier food (Chatterjee, 1997). Tea and coffee were the other important additions to the
Indian diet. In a fascinating account of the spread of coffee in Tamilnadu, Venkatachalapathy
(2002) observes that coffee displaced the traditional neeragaram (water used to cook rice that
was fermented and mixed with leftover vegetables and pickle) and became the drink of
choice, even among the lower classes. Coffee became incorporated into the Tamil middle-
class milieu, getting enmeshed in rituals of hospitality, as a drink to be served to guests and
even as a sign of exclusion, through the use of metal tumblers with rims so that consumers
could pour the coffee straight into their mouths without touching the glass, and avoiding
caste pollution (Venkatachalapathy, 2002). The beverage also evoked anxiety, perceived as
a Western product that infiltrated the pristine countryside, with even women finding it
difficult to do without it.
As these accounts reveal, Indian consumers’ encounter with the West was often marked
by discomfort, suspicion and grudging acceptance. Even when it came to life-threatening
illnesses and medical care, religious and caste customs prevailed over reasonable medical
advice. While some communities such as the Parsis readily accepted Western medical
practices, many of the Hindu castes, due to notions of ritualistic pollution and religious
beliefs, refused to take medical advice or help even for serious issues such as childbirth and
smallpox (Ramanna, 2000). The British contributed to this scepticism and hostility among
the Indians by their dismissal of local knowledge and products as being uncivilized, even
barbarian. For example, the British establishment was reluctant to accept that the tea plant
could be found indigenously in Assam, and instead claimed that such a refined product as tea
could originate only from China, and not from the fever-ridden jungles of Assam (Sharma,
2006). Even when evidence emerged that the tea plant could indeed be found in Assam,
attempts were made to characterize the variant as savage and uncivilized, and not suitable to
the delicate palette of consumers in London (Sharma, 2006). In the face of the onslaught of
imperial reason and Western science, Indian consumption practices and traditions struggled
to recast themselves as scientific and modern. These displacements contributed to boycott of
Western goods in the early 20th century as consumption and markets became important sites
for enacting nationalism and freedom in colonial India.
In summary, the Indian encounter with Britain and other colonial powers resulted in
changes in marketing systems and consumption habits. Middlemen played a vital, though not
always positive role in the supply chain. Markets were highly decentralized and diversified,
and the bazaar played a critical role in connecting supply centres in the countryside with sites
of buying and consumption in the urban areas. Colonization resulted in many changes in
the consumption habits of Indians, with the introduction of new goods and services such as
tea, coffee and Western medicine. Cultural changes produced by these encounters resulted
in considerable anxieties among consumers, with Western products appropriated into the
local social and cultural milieu, or resisted and denigrated as being inferior to Indian goods
and practices.
Post-colonial period
India secured independence in 1947 and although most of the marketing activities developed
during the earlier periods continued, the change in administration led to modifications in
the economy, enabling the country to move forward with economic policies more suited
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Hari Sreekumar and Rohit Varman
to its own interests. The state in the initial years after independence placed an emphasis on
planning. There was a considerable stress on heavy industry and public sector enterprises.
Nation-building was the priority, and private enterprises had to negotiate a complex system
of licences and permits to function. This period also saw emphasis on small and medium
enterprises, and several goods were exclusively reserved for these businesses as a form of
state protection.
In the aftermath of colonialism, India was struggling with severe problems such as
widespread illiteracy and poverty. Economic indicators were poor, and this reflected in
the state of consumption. Westfall and Boyd (1960) point out that in India consumption
expenditure in the 1960s was a mere US$54 per capita per annum, as compared to US$1664
in the United States. The stunted marketing system was partly due to the extremely low
levels of consumer demand as a result of colonial plunder. In a survey conducted in a small
town in the 1960s, Braunthal (1969) describes word of mouth as the primary means of access
to information for Indian consumers. Accordingly, radio was a key source of communication,
and a lack of access to newspapers was not only due to the inability to read, but also due to the
inability to pay even the small price of a newspaper. Moreover, 96 per cent of consumers cited
food scarcity as a critical problem facing India, indicating the extent of economic deprivation
(Braunthal, 1969).
For a long period of time after independence, the state, with its emphasis on welfare
measures, was guarded in its support for markets and marketing. In 1966 coverage of an
advertisers’ meeting in the Economic and Political Weekly, the correspondent reports that
advertisers were trying to persuade the government, led by then Prime Minister Indira
Gandhi to allow commercial advertising on radio and TV, which was yet to be introduced in
India. The reporter describes the Prime Minister’s concern as to whether commercial TV
would serve the national purpose, and then goes on to rather unimaginatively and myopically
suggest that mass communication would be useful when there was mass consumption,
which was not foreseeable in India in the near future (Economic and Political Weekly, 1966).
Since television was not available, newspapers, magazines and cinema halls were the
outlets for advertising. Even in such a constrained environment, there were a large number
of agencies. Banerjee (1968) reports that there were 279 advertising agencies with a turnover
of INR 350 million, and J. Walter Thompson was the largest agency with over a third of
the total turnover. In-house media planning and marketing research were also emerging in
the field (Banerjee, 1968). However, the media continued to be weak, with Banerjee (1968)
complaining that, in the absence of specialized trade publications, even engineering firms
selling expensive machinery were forced to advertise in the daily newspapers, leading to a
huge wastage.
The economic liberalization process started in the 1980s, and led to economic priorities
shifting from a welfare state-oriented model, to a right-leaning approach favouring more
business-friendly practices, which coincided with the development and consolidation of
national television (Rajagopal, 1998). This increased growth rates but is also criticized for
increasing inequality. For the marketing system, the biggest change has been the gradual
transition from a controlled economy to a consumption culture with myriad marketing
opportunities, albeit marked by persistent poverty and inequality. Television coupled with
globalization had a significant impact on the advertising industry. It created a national
market, with advertisers being able to reach rural areas. This led to advertising adopting
new languages, moving away from Anglophone domination to copy being written in Hindi
and regional Indian languages (Rajagopal, 1998). The last two decades are marked by the
development of several marketing institutions, such as organized large-scale retailing, retail
402
History of marketing in India
credit and e-marketing, with an increasing number of consumer goods and the spread of
consumer culture (Varman and Belk, 2012; Venkatesh, 1994).
While some of the literature on economic liberalization and its impact on India has been
unabashedly celebratory (e.g. Sheth, 2004), scholars have also raised concerns about rising
levels of consumption, and the consequent environmental degradation (e.g. Guha, 2003).
There are also concerns voiced in the literature about mass media fuelling consumer desires,
and leading to an increase in materialism among poor consumers, many of whom cannot
afford the luxury goods advertised on television (Varman and Belk, 2008). Writers such as
Shrivastava and Kothari (2012) have severely criticized the neglect of the poor and economic
degradation accompanying the neoliberal developmental agenda (also see Varman and Vikas,
2007; Varman et al., 2012). While the neoliberal agenda has definitely produced a proliferation
of consumer goods, and significant rises in standard of living for some consumers, it appears
to have had the perverse effect of stagnation or further impoverishing the weaker sections,
resulting in India achieving what Dreze and Sen (2013) aptly refer to as ‘an uncertain glory’.
In conclusion, our study shows that Indian markets had a number of institutions,
mechanisms and consumption goods that point to a fairly high degree of sophistication
even in medieval times. Indian marketing evolved over a long period of time impelled by its
specific historical experiences and institutional make-up. This chapter thus fills a significant
gap in extant understanding of markets and marketing. As the neoliberal economic agenda
leads to the expansion of marketization in India, this historical perspective will serve an
important sense-making role in our understandings of markets and consumers.
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