Dr Darmp Sukontasap, senior vice president of Tesco Lotus, and Liz Kynoch, trading law and technical director of Tesco in the United Kingdom, demonstrate product assessment at the new Tesco Research Centre in Sukhapiban, Bangkok.

Located at the Tesco Lotus store in Sukhapiban in Bangkok, which is also the site of the company's new head office, the new centre will conduct consumer surveys, including blind tests to find out shoppers' opinions on Tesco's house brands compared with principal brands.

The purpose is to improve the quality of house brands based on customers' requirements.

Tesco Lotus senior vice president Dr Darmp Sukontasap said that Tesco Lotus aimed to expand dramatically its house-brand business in the near future.

"We currently have over 2,000 house-brand products available in our Tesco Lotus stores. We plan to increase them up to about 3,000 by the end of this year. We also want to increase the house-brand business from the current 10 per cent of total sales to 15 per cent by the end of this year," said Darmp.

Darmp said that Tesco's house-brand products - Tesco and Khum Kha brands - were now available at prices between 10 per cent and 15 per cent cheaper than principal brands on the market.

"However, in this current economic situation, Thai consumers intend to purchase products which offer them good value for money by considering both price and quality as two major priorities," said Darmp, adding that today shoppers need good-quality products at reasonable prices.

Darmp said the research centre would conduct activities beyond the conventional development process that the company had used with house-brand suppliers.

"We have previously joined with individual suppliers in producing house-brand products which are legally able to comply with all government directives issued to protect consumers. They now need to manufacture house-brand products which meet with the quality standards set by the company," said Darmp.

Tesco Lotus would monitor the suppliers' production processes as well as co-develop all house-brand items with them, he said.

"The new research centre will help us to get products that the customers want with consistent quality. It will also ensure that our house-brand products will meet the tastes and preferences of customers," said Darmp.

Liz Kynoch, trading law and technical director of Tesco, said that under current economic conditions the company believed that Tesco's house-brand products will be an important alternative for consumers.

Product assessment is an important activity for Tesco, which takes customers' opinions about its own brand items very seriously in order to develop the right products to fit their demand, she said.

"Tesco Group has long experience in product assessment with five centres functioning in the UK, and has successfully transferred its advanced methodology, standards and know-how to the Thai market," said Kynoch.

"Thailand itself gains many benefits from these assessment centres. Besides the transfer of retailing know-how, our trade vendors stand to gain from becoming involved. Product assessment enables vendors to cut their manufacturing costs and offer better value to customers."

According to Kynoch, Tesco's first product assessment centre in Asia was opened at the Tesco Lotus store in Bangkapi in 2002, which was a pilot project for Asia. After Thailand, more assessment centres have been opened in countries such as Malaysia, China and South Korea.

Kynoch added that Tesco would consider launching its premium house-brand products under its Tesco Finest label in Thailand when the time is right, aimed at serving a wider range of customers.

She said Tesco Finest products were introduced in the UK in 1999 and expanded into South Korea three years ago.

Kwanchai Rungfapaisarn

The Nation