Abstract:
Tea sector is an important part of Kenya’s economy as a leading export earner. Kenya Tea
Development Agency (KTDA) farmers’ earnings in bonus payment fluctuate based on variation in tea prices,
however farmers in the West of rift valley under KTDA factories are paid less compared to East of rift valley
and this disparity has caused economic difficulty. The purpose of the study was to investigate the relationship
between objective quality and price variation in tea marketing. This was anchored on the quality dimensions’
framework. The study employed correlational research design with cluster and purposive sampling
proceduresadopted to collect secondary and primary data. A sample of 7 factories representing 7 clusters with
69 tea factories was used to sample 2,142 invoices consisting of 19,890 panel data. The panel data was obtained
using data extraction tool from secondary sources while primary data was obtained using questionnaires. The
primary data utilized a census of 128 tea brokers, tea warehouses and buyers who handle tea in Mombasa tea
Auction. Cronbach alpha obtained for objective quality were 0.895. Descriptive and inferential analysis was
done using Microsoft Excel, SPSSand STATA. Panel multiple regression analysis was used to test research
hypotheses at 5% significance level. The findings indicated that there is significant difference in objective
quality of tea from East and West region (P<0.05)with quality of tea from KTDA factories in East better KTDA
factories in West of rift valley. The study also found that objective quality had significant relationship with price
variation. The study concluded that objective quality had significant relationship with price variation and supply
had negative moderating effect on this relationship. The study recommended that KTDA factories and small
scale farmersin West of rift valley should benchmark against KTDA factories in East of rift valley tea quality to
improve quality of their tea.
