1. University of Malaya
Faculty of Business and Accountancy
Graduate School of Business
Master of Business Administration
___________________________________________
CMGB 6101 – MARKETING MANAGEMENT
PRODUCT : PROTON EXORA 2
For: Michael M.Dent Msc, MPhil, MCIM
Prepared by:
Halisah Ashari CGA 080108
Linda Sim Siew Kian CGA 080016
Teh Chye Beng CGA 080035
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2. CONTENTS
EXECUTIVE SUMMARY 4
1. INTRODUCTION
1.1. AUTO INDUSTRY IN GENERAL 2009 4
2. COMPANY BACKGROUND 7
2.1. PRODUCTS AND SERVICES 8
3. PROBLEM IDENTIFICATION
3.1. PROTON CONTROVERSIES 9
3.2. BUSINESS MODEL 10
3.3. QUALITY CONTROL 11
3.4. ECONOMIC FACTOR 11
3.5. POLICY 13
3.6. STAFF AND VENDOR 14
3.7. OTHERS 15
3.8. THE CHOICE OF DECISION FACED BY THE KEY PERSON 16
4. PROBLEM ANALYSIS
4.1. MARKET OVERVIEW 17
4.2. SWOT ANALYSIS 18
4.3. COMPETITORS ANALYSIS 21
4.4. POINTS OF PARITY AND POINTS OF DIFFERENCE
4.4.1.POINTS OF PARITY 22
4.4.2.POINTS OF DIFFERENCE 23
5. DECISION CRITERIA
5.1. BUSINESS PROPOSITION 24
5.1.1.MEASURABLE AND ATTAINABLE OBJECTIVE 26
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3. 5.1.2.TARGET MARKET 26
5.1.3.STRATEGY STATMENT 29
5.1.4.KEY PLANING ASSUMPTION 29
5.1.5.POSSIBLE SOLUTION 29
6. RECOMMENDATION & IMPLEMENTATION
6.1.1.MARRKETING MIX- ACTION PLAN 32
6.1.1.1 PRODUCT 32
6.1.1.2 PRICE 33
6.1.1.3 PLACE 33
6.1.1.4 PROMOTION 34
6.1.2 IMPLEMENTATION 37
6.1.3 EVALUATION 38
6.1.4 RECOMMENDATION 39
7. CONCULSION 41
REFERENCES
APPENDICES
i) Nissan Grand Livina Specification
ii) Proton Exora Specification
iii) Campaign Flow Chart
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4. EXECUTIVE SUMMARY
Proton Exora is a compact multi-purpose vehicle (MPV) model produced by Malaysia car
manufacturer known as Proton Holdings Berhad (Proton). The new model car was launched
on 15 April 2009, which is the first Malaysian designed MPV. Proton Exora is a new lifestyle
family vehicle, which combines advanced styling, spacious interior, which accommodates 7
adults and has multiple usage, high quality design and good performance with emphasis on
the value for money factor.
Despite the benefits offered by Proton Exora, our group had identified few major problems
faced by Proton. One of the major problems faced by Proton is Proton has lost its market
share to local and foreign competitors from 60% of the domestic passenger car market in
2001 to 29% for the first half of 2008 (Malaysian Automotive Association 2008). Proton’s
brand value has also dropped from RM239 million in 2007 (rank 19) to RM150 million in
2008 (rank 23). The latest news on 23rd November 2009 reveals that Proton’s ranking has
dropped from Malaysia’s 30 Most Valuable Brand (MMVB) ranking.
Therefore, our group has recommends new concept car known as Proton Exora 2 with
additional improvised features included to enhance the performance and increase the demand
for Proton Exora car. Possible solutions to mitigate the problems identified are by
introducing additional value improvised features to enhance the performance and sales of
Proton Exora 2 by focusing on fuel efficiency, convenience and safety and emphasizing on
the environment friendly vehicle. Overall, the action plans recommended are based on 4Ps’
strategies and marketing mix models.
1. INTRODUCTION
1.1. Auto Industry in general 2009
The automotive industry in Malaysia can be considered as one of the most important and
strategic industries in the manufacturing sector. Compared with other industries in the
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5. manufacturing sector in Malaysia, the automotive industry is hoped to boost the
industrialization process so that Malaysia can be a developed nation by 2020.
Vehicles Sales Unit Market Share Ranking
Jan - Jan – Jan - Jan – Jan – Jan -
June June June June June June
2007 2008 2007 2008 2007 2008
75,4 83,5
1 Perodua 83 89 34.2 30.1 1 1
46,9 72,9
2 Proton 55 57 21.3 26.2 2 2
36,5 53,1
3 Toyota 72 29 16.6 19.1 3 3
14,1 16,7
4 Honda 75 66 6.4 6 4 4
8,3 14,9
5 Nissan 36 25 3.8 5.4 6 5
10,8 6,7
6 Naza 98 09 4.9 2.4 5 6
4,3 3,8
7 Inokom 33 92 2 1.4 7 7
2,3 3,2
8 Mitsubishi 41 40 1.1 1.2 10 8
2,3 2,6
9 Daihatsu 76 70 1.1 1 9 9
7 2,6
10 Suzuki 39 02 0.3 0.9 19 10
Table 1: MAA Vehicle Sales, Market Share and Ranking Summary for Top 10 Passenger
Cars & Commercial Vehicles in Malaysia for Jan to June 2008
The deregulation of the industry and introduction of strong affordable regional automotive
brands from Japan, Korea and China has made the industry to be more competitive. About 90
per cent of the cars sold in Malaysia are produced by the local manufacturers, namely
PROTON and PERODUA as shown in Table 1. The automotive industry has played an
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6. important role in the development of the manufacturing sector in Malaysia. With the
successful implementation of the first National Car Project, the industry has to widen its
perspective to take on the challenges ahead by moving towards an international level.
Besides gearing up its operation to meet the anticipated growth in the sector, the industry has
to strengthen its competitiveness through greater emphasis on product and market
development. The industry also has to carve a niche in the export market and foster closer
linkage with the target destinations.
The prime reason that backed the growth in Malaysian auto market is higher orders from the
consumers wishing to buy new vehicles accompanied by the launch of latest makes across a
larger part of the segments. The good sales displayed by car models like PERODUA and
PROTON supported the overall vehicle sales. Also, the productive steps like the
technological enhancements introduced by the Malaysian automobile industry to assist the
auto sector helped the market to grow significantly over the years. In 2008, MAA President
Datuk Aishah Ahmad expected passenger vehicles to boost vehicle sales due to the backlog
of orders to be supplied. Therefore, there was an increase in sales for PROTON and
furthermore, consumers had favorable sentiments about the market conditions. At the same
time, auto companies were introducing new models, particularly in the lower engine capacity
range to sustain the current buying interest.
There was also the shift of consumers from expensive car models to the reasonable national
cars and the rush of customers to purchase their vehicles before the holidays of Hari Raya.
Further, the boost in passenger car sales of in September 2008 can be attributed to the
improvement in confidence of consumers and their enhanced lifestyles. However, in 2009,
the prospect was somehow different due to the global crisis which affected a number of
countries around the world. This has caused the sales of automobiles to remain low as banks
are increasing their interest rates to brace for the low volumes. Besides the global crisis, the
rise in oil prices has also affected the sales of Malaysian automobiles. Sales are expected to
decline as consumers decide to hold back in their purchasing and this will definitely affect
PROTON as shown in their sales.
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7. Currently vehicles that are manufactured by Malaysian companies such as PROTON,
PERODUA, Inokom and Malaysia Truck & Bus (MTB) are priced lower than comparable
vehicles that are produced by the assemblers and especially that of the CBU imports. This
has allowed lower level income earners to own a car within their household.
For year 2010, it is expected that there will be a return to positive annual growth in new
vehicle sales although it may seemed that the impact is a slow one. Long term expectations
are high for the small car segment, as the MAA envisages a shift towards more fuel-efficient
cars. Besides the recovery in the economy, with technology and research and development
undertaken by the auto companies, it is expected that there will be a rise in the sales of cars in
the near future.
2. COMPANY BACKGROUND
PERUSAHAAN OTOMOBIL NASIONAL BERHAD or PROTON was incorporated on
May 7, 1983 to manufacture, assemble and sell motor vehicles and related products,
including accessories, spare parts and other components. PROTON produced Malaysia’s first
car, the Proton SAGA which was commercially launched on July 9, 1985 by Malaysian
Prime Minister, Dato’ Seri Dr. Mahathir Mohamad who conceived the idea of a Malaysian
car.
PROTON was publicly listed on the Kuala Lumpur Stock Exchange (KLSE) in 1992 and its
shareholders include Khazanah Nasional Berhad, Petroliam Nasional Berhad, Mitsubishi
Corporation, Mitsubishi Motors Corporation, Employee Provident Fund Board and other
local and foreign investors.
PROTON had some major challenges in the recent years, with new competition and the
deregulation in the industry. Proton Holdings Bhd has swung into the black in 2008 with a
cumulative net profit of RM202.9 million, compared with the loss of RM589.5 million it
registered in 2007. The national carmaker's revenue rose 14.6 per cent to RM5.63 billion
from RM4.91 billion a year earlier. One of the reason of this achievement is due to the
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8. introduction of new models with higher profit margins, stronger sales volume, savings from
group-wide cost-reduction initiatives, income from the sale of rights for use of Intellectual
Property Rights relating to a vehicle platform (for the China market) as well as the R&D
grant.
For the year 2008, PROTON’s focus would be in the core areas of product, quality, cost
efficiency and distribution network. PROTON aims to have a strong product portfolio by
introducing “the right car, for the right market, at the right price and at the right time”. This
was reflected in the organisation’s newly introduced Exora, Persona and Saga Models, with
the latter powered by the new CamPro IAFM engine. PROTON has also continued to update
and refresh existing product lines to entice and attract customers.
2.1. Products and Services
PROTON’s model products include WAJA, SATRIA, GTi, WIRA, ISWARA, ARENA,
PERDANA V6, JUARA, PERSONA and EXORA. The range of 1.3, 1.5, 1.6, 1.8 and 2.0
litre engines satisfies a wide spectrum of customers both locally and abroad.
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9. PROTON cars are also known internationally as competitive and innovative automobiles.
PROTON now is being exported to 50 countries like United Kingdom and continental
European markets, thereby realizing its goal of being an internationally successful Malaysian
automobile manufacturer.
The first PROTON car was exported in 1986. The number has increased steadily and in
1998, Malaysia exported a total of 18,422 units to countries and areas, including Argentina,
Australia, Bahrain, Bangladesh, Belgium, Brunei Darussalam, Chile, Cyprus, Egypt, Fiji,
Germany, Jordan, Kuwait, Lebanon, Libya, Maldives, Mauritius, Oman, Philippines, Qatar,
the Russian Federation, Saudi Arabia, Singapore, Slovenia, Sri Lanka, Taiwan Province of
China, Turkey, United Arab Emirates and United Kingdom. The models being exported
include Wira, Sedan/Aeroback, Satria and Putra.
PROTON’s exports are the most successful in the United Kingdom due to its competitive
pricing strategy and its buyback arrangement with car rental companies in the country.
PROTON also benefited from the Generalised Preferences Scheme that made it easy for
them to enter the United Kingdom market. PROTON has introduced a few upgraded models
with higher engine capacity and sporty design to establish its presence internationally.
PROTON is focusing to be more customer-oriented and by producing competitively priced
and innovative products. It is therefore contributing to the Malaysia’s attainment of Vision
2020.
3. PROBLEM IDENTIFICATION
3.1. PROTON Controversies
Controversies surrounding PROTON till date include the abuses and improprieties in the
malpractices issue of approved permits (APs) for imported cars, entry of foreign cars at
below-cost prices, the 20-year protectionist policies accorded to PROTON, and other
questions concerning the national automotive policy.
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10. The 20-year protectionist policies accorded to the national automaker PROTON was the
government ways of emulating other vehicle manufacturing countries. Tun Mahathir
Mohamad, the former premier and present advisor to PROTON once said that without such
policies, Malaysia would not have a car industry, admitting that Proton had gained 80 percent
market share "benefitting from protectionism,” and PROTON otherwise would not have been
able to penetrate foreign markets due to the economies of scale
Malpractices are rife despite the benefits of the import system of Approved Permits (APs).
PROTON also lost money due to the lower prices of foreign cars sold in Malaysia. It has
been identified that lower prices for foreign cars is due to volume and PROTON would not
be able to achieve this because of their protected car market.
3.2. Business Model
It is hard to see PROTON ever making money consistently with the current business model
that it operates. At the heart of the car business is all about two basic things: cost structure
and product. General Motors failed because it messed up on both counts.
The lessons from GM are simple - make products that people want, and make them in a cost-
efficient way. Margins are generally so thin in the auto business that car factories really only
make money when they are running at or near full capacity. PROTON has not one, but two
factories that can output a combined maximum of 1.2 million cars a year, yet it builds only
156,845 units.
Given that the vehicle market here is worth half a million units annually, even if we roused
enough patriotic fervor to get every car buyer to choose a PROTON over any other brand,
that would still soak up only half of the total capacity.
3.3. Quality Control
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11. PROTON was established 25 years ago by Tun Mahathir Mohamad as part of an ambitious
national industrialization plan, but it has long been criticized for poor quality and
unimpressive design.
PROTON's major problem, as everybody knows, is quality control. Complaints typically
relate to failures in power windows, doors and alarm systems. It’s not unusual (very
common, to be precise) to hear public complaint about the overall poor quality vehicles by
PROTON over the years and indirectly affecting the financial result of the company, when its
sales dwindled tremendously and continuously losing market share and subsequently, the
profit margin eroded substantially too.
PROTON's head of body engineering once told a local newspaper that the benchmark for
world quality class cars is two defects per car but from our observation, world class quality
car manufacturers have been aiming for zero defects all this time. "DO IT RIGHT THE
FIRST TIME" – slowly but surely the learning curve must show positive result. Most
successful companies are.
3.4. Economic factors
3.4.1.Deregulated market
PROTON 's market share has slumped over the years, as it faced difficulties coping in a new
deregulated market.
The government has urged PROTON to forge a partnership with a foreign automaker to give
it the expertise and economies of scale that it needs to survive, but talks with Volkswagen
and General Motors have collapsed when the Government decided it is best to keep the
PROTON’s ownership or risk losing control over the design and production of the national
car maker.
3.4.2.The ever-increasing cost of manufacturing and raw materials
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12. PROTON, in February 2010 had made net profits for two quarters in a row due to lower
operating costs and increased sales.
However, it still booked a net loss of 32.92 million ringgit (10 million dollars) for the nine
months to December, although it was smaller than the 590.448 million ringgit loss a year
earlier.
The PROTON chief said the carmaker would proceed with expansion plans despite the
soaring cost of raw materials.
3.4.3.Shaken consumer confidence stemming from the threat of global economic
slowdown and an over-crowded operating environment
Despite the challenges that persistently impact the industry, which include the ever-
increasing cost of manufacturing and raw materials, shaken consumer confidence stemmed
from the threat of global economic slowdown as well as an over-crowded operating
environment. Globally, the automotive industry is going through a period of change,
reflecting both the rapid change of technology, increasing need to comply with continually
more stringent regulatory requirements and increasing liberalization of markets. Higher
petrol prices and increased cost of raw materials and manufacturing resulting in lower profit
margins, also posed a challenge. In addition, the declining trend for vehicle sales commenced
in early 2006, because the macro-economic factors, higher interest rates and stricter lending
practice.
3.5. Policy
3.5.1.Export Policy
According to Deputy Minister of Finance Datuk Dr Awang Adek Hussin, PROTON exported
a total of 18,426 cars in year 2009, from the 108,405 that it built in 2008. Although the focus
now is on exports, both numbers are cause for concern for the national car company.
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13. In the lightning pace of the automotive industry today, it is small wonder why PROTON is
finding it hard to keep up overseas — and increasingly in Malaysia as well. Product
lifecycles are getting ever shorter that it feels as though carmakers are introducing new model
line-ups virtually every year. PROTON in contrast unveils on average a new model or model
variant a year. This replacement rate simply will not do for consumers who have grown
accustomed to seeing fresh models in the forecourts of its competitors.
One of PROTON’s own Middle Eastern distributors lamented the same when he gave up the
business. When Toyota, Honda and the rest were springing models left and right, PROTON’s
languid pace with facelifts and replacement models failed to hold buyers’ interest. It is slow
because PROTON cannot afford to have it any faster. Not when its rate of returns is so low.
The Savvy, for instance, starts at £7,995 (RM 44,000) in the UK, one of the few markets that
PROTON exports to. That gets you a Kia Picanto and £2,000 in change. Or, if you want to
blow every single sterling, you might opt for a Volkswagen Polo, albeit a pretty bare version.
With manufacturers pushing well into seven-figure production territory, PROTON’s 108,405
do it no favor at all. Unable to generate the kind of volumes that any mass-market
manufacturer needs to be viable, PROTON cannot hope to match the scale — or enjoy the
benefits — that its competitors have.
To have PROTON address its dismal exports with urgency is to have it treat a symptom and
not the problem. Exports are poor because the fundamentals of the company are poor. Its
product replacement cycles are far too long for today’s market and it simply doesn’t have the
kind of numbers to be able to offer prices the Koreans, for example, already do.
Before PROTON can hope to get its exports up to where it needs to be, it will need to solve
these problems first. And it is unlikely that it will be able to do it alone. It may have once
been flush with cash but this is no longer the case. A fiercely competitive market at home has
made sure of that.
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14. To do this, PROTON will need a partner that can help shoulder the exorbitant costs of
keeping up with the Joneses. Or better still, to give it access to technology that is already
been developed. There is no need to reinvent the wheel each and every time.
The Volkswagen tie-up seemed its best bet at the time but it chose to rebuff the protracted
flirtations. Now, Volkswagen is busy with its own marriage to Porsche. And the rest of the
big players in the world are also busy licking their own wounds.
Fresh from the economic crisis, PROTON will have fewer healthy partners to choose from
and it is itself no longer the jewel it once was. But the situation remains unchanged, then as
now. Without outside assistance, exports will be the least of PROTON’s concerns.
3.5.2.Protectionism policy
Then there is the matter of price. In Malaysia, PROTON prices are kept comparatively lower
to foreign manufacturers through protectionism. This, unfortunately, is a crutch the company
cannot count on in foreign markets. Protectionist policy has largely been blamed for
PROTON 's stagnating performance.
3.6. Staff and Vendors
PROTON’s Managing Director, Syed Zainal Abidin, was once quoted saying that 60
percent of defects in PROTON cars were due to poor quality components from vendors, but
admitted the rest of the blame fell on the firm’s workforce.
If the management is serious in bringing the PROTON back to a profitable entity, they
should run it like a proper conglomerate and not as a charity organization, which means
incompetent vendors and vendors which were being overlooked, contributing hiccups and
downturn of sales performances and do not adhere to the standard set must be removed and
replaced.
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15. In another word, if PROTON is to talk about "zero-defect", zero tolerance towards vendors
who can’t deliver must come into the picture as a complimentary to the campaign, otherwise
the entire exercise is going to be a futile effort and public fund will continue to be wasted.
PROTON’s zero-defect campaign aimed at erasing a reputation for poor quality has left it
struggling to compete against foreign competitors. The management had urged the
employees to focus on quality control, which is critical to profitability and overseas exports.
Consumers want quality cars and they have high expectations.
According to Syed Zainal, "Today, we want to focus on rebuilding the company. The focus is
putting PROTON on a better footing, to improve quality, product and profit. We need to be
prepared to compete globally.”
To retain a competitive edge in term of skills-set and technical know-how in this industry,
PROTON needs to ensure that their human capital is continuously nurtured with the right
training and tools. Consistent and relevant training is crucial to ensure that their employees
have the knowledge and tolls to help drive PROTON forward.
3.7. Others
PROTON lacks an engine or platform to expand into the SUV and MPV markets, or the 2.0-
litre and above segments. PROTON may need to collaborate with a foreign partner much in
the way BMW and PSA Peugeot-Citroen are working together to develop new engines and
technologies. It is of some comfort, therefore, to learn that the Government is still willing to
consider a strong strategic foreign partner in the future. A tie-up with a strong foreign brand
will enable PROTON to penetrate more discerning markets.
In the longer term, many of the green engine technologies that are emerging as a result of
rising fuel prices and global warming would dictate the direction of automotive development,
and these are beyond PROTON capabilities.
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16. On its own, PROTON has limited funds for research and development. And the bulk of its
exports are mostly confined to less mature markets, including China and some Gulf
Cooperation Council.
3.8. The Choice of Decision Faced by the Key Person
PROTON’s Managing Director Datuk Syed Zainal Abidin Syed Mohamed Tahir, has taken a
turn for the better. Syed Zainal has held the reins for some two years and has instituted a host
of reforms, addressing many of the quality control issues, and vendor and marketing
problems faced by PROTON in the past.
PROTON’s realizes that strong customer orientation and competitively priced products are
the foundation of the company’s business. Performance targets have been developed to
maintain market leadership, to continue to develop innovative products, to satisfy customer’s
needs better and to enhance profitability.
Primary factors that contributed to the resurgence of the industry included the introduction of
new models at highly competitive and consumer-friendly prices; attractive and creative
financing schemes for car buyers as a result of aggressive sales campaigns; and a strong
economic growth of 5.75% in 2008 (FR 2009). To change the attitude and mindset of
employees, best practices are applicable via effective training. Upon realising the concept,
PROTON provided training to all employees to help them understand the company’ ethical
principles and how those principles can help them make decisions. Human capital
development programmes become more structured which helps to strengthen competitive
edge. PROTON had developed extensive vendor programmes to ensure they adhere to the
expected quality which previously was overlooked. This has led to reduction of 23% direct-
vendors, and a more structured and manageable direct-vendor networks.
Taking a look at the latest Exora and we will get a glimpse of some of the changes - more
uniform panel lines, better interior plastics and seating, a more responsive transmission, and a
more inviting interior, among others.
4. PROBLEM ANALYSIS
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17. 4.1. Market Overview
Once known as the king of the road, PROTON has seen its fortunes dwindle due to growing
competition from local and foreign competitors as Malaysia opens up its auto market.
Malaysia is Southeast Asia's largest passenger car market with 497,459 vehicles sold in the
year 2008.
Malaysia’s auto market is dominated by its national cars, PROTON and Perodua which in
year 2000 accounted for market share of roughly 90 percent of the vehicles sold annually.
Some 25 other manufacturers compete for the remaining 10 percent. But compare with last 2
years, market share of the national car makers has declined to roughly 63 percent.
During year 2000, PROTON conquered 63.4 per cent market share. It has eroded to below 30
percent in year 2007 and 2008. Perodua, the second national cars manufacturer has taken
over the market of the king since two years ago with a market share of 33.6 percent in 2008.
PROTON has been maintaining their market share with best- cost and broad differentiation
strategy, although the market share fell from 40% in 2005 to 32% in 2006
(www.wikicars.com) allowing Perodua to overtake PROTON as the country's largest
passenger carmaker for the first time. Total losses in 2007's financial year has climbed to
RM169 million and this was caused by the extensive promotional discounts by its tight
rivals, according to PROTON.
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18. Figure 1: Show the Overall market share of passenger car market. (from MAA vehicle sales
resources) Noted : 2006 data is not published
To date, PROTON is facing severe competition in its home market as government may
remove rules that protect local car makers when it reviews the 3-year-old auto policy to boost
foreign investment. This reduction of the protection accorded to PROTON may increase its
difficulties to become market leader again. Although government has cut import taxes, it still
imposes high taxes on locally assembled foreign cars and this has given protection to national
carmakers.
Looking at the industry overview, the year 2009 witnesses a tremendous improvement in
motor vehicle sales. This uptrend, which began from the second half of 2007, was a welcome
relief to the industry but unfortunately the momentum could not be maintained. After
recording peaks of more that 50,000 sales in April, July and September 2008, it saw a
significant drop of 21% after that, which was due to the global economic meltdown marked
by the collapse of major financial institutions in the United States. This was further
compounded by the increase in petrol price in October 2008. After that the industry resurged,
driven mainly by the introduction of new models at highly competitive and consumer-
friendly prices, attractive and creative financing schemes for car buyers as a result of
aggressive sales campaigns, and strong economic growth of 5.75% in 2008. But again, in
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19. 2009, MAA has forecasted that there would be a decrease of 12.2% of passenger cars
compared to 2008. The forecast was well-founded on the current global financial and
economic climate, reiterated by the contraction of GDP growth. Other factors may include
fluctuating oil and commodity prices as well as unfavorable FOREX rates (ref:
www.proton.com.my).
In terms of financial performance, for the financial year ended 31 March 2009, PROTON
recorded a loss after tax of RM301.8 million, although there was improved revenue of
RM6.5 billion. This decline was largely due to the one-off exceptional provision for the
impairment of property, plant and equipment and inventory write-down for certain models
impacted by declining demand. In addition to that, PROTON’s financial performance for the
second half of the financial year was also adversely affected by the accelerated amortization
of dies and jigs for certain models as well as higher commodity prices, increased costs of
components and raw materials which arose from higher foreign currency exchange rates,
particularly the Japanese Yen and US Dollar.
4.2. SWOT Analysis
Strengths Weaknesses
• Competitively priced products • Reputation of poor product
• Extensive nationwide distribution performance and functionality
network • High cost to expand their operation
• Good corporate governance by advanced technology
• Influence of patriotism as Proton is • Short history in automotive industry
national car-maker • Vulnerable to increasing material
• Government support cost (steel, etc)
Opportunities Threats
• High demand on the products • Competitors - local & international
• Opportunity to grow their business brands
globally • A lot of substitute products in
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20. • R&D Development market
• Government support • Fast changing and advanced
• After-sales services engineering technology
• Collaborations within automotive • Economic downturn – decrease of
industry car sales
4.2.1. Strength
PROTON’s strength lies in its competitively priced product. Its extensive nationwide
distribution network helps the industry to move forward with the support from Malaysian
government. The company also has good corporate governance, and highly regarded by
many Malaysians out of patriotism they feel for this country as PROTON is the national
car maker.
4.2.2. Weaknesses
Inexperience, apparently due to short history in car making certainly could not be an
excuse for PROTON to come out with low quality products. This could cost PROTON
very high as over time, it might jeopardize PROTON’s reputation. Poor product
performance and functionality is something that cannot be allowed to happen and quality
always needs to be monitored and assured to the customers. Other than that, operational
cost and other expenses is always a challenge to any industry and for the case of
PROTON, it is more vulnerable to increasing raw material cost such as steel particularly.
4.2.3. Opportunities
The demand for cars in any segment is always there, except for more trying times like
during economic crisis. There are always opportunities for PROTON to be a global
player. Nobody ever say that cars should only be manufactured by Japan, Germany and
other western countries though of course these countries have the reputation of making
good cars long before PROTON and Malaysia comes into the picture. Collaborations
within industry players could enable PROTON to do many things. Through research and
development more innovative products could be invented, and ensure that PROTON as a
brand name remains in the industry.
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21. 4.2.4. Threats
One of the threats is of course from the rivals, the competitors in the automotive industry.
Even Perusahaan Otomotif Kedua (Perodua) – Malaysian 2nd national car maker, set up
after PROTON started to challenge PROTON’s market share in Malaysia. Perodua
actually did better in recent years and outperformed PROTON via their most well selling
model so far, MyVi and grab more than 30% of overall market share. Under policy like
AFTA, (ASEAN Free Trade Area) consumers can have more choices from Honda,
Toyota, Chevrolet and other brands to be selected at a more affordable price, as Malaysia
now has cut duties on imports from other Southeast Asian countries to less than five
percent.
4.3. Competitor Analysis
Category Luxury Executive Family MPV Compact
Brand
Proton - Perdana Waja Exora Savvy
Toyota Camry Altis Vios Avanza Yaris
Wish
Honda Accord Civic City Stream Jazz
We try to see how PROTON brand product categories placed itself against its
competitors, namely Toyota and Honda. Product extensions for each brand are grouped
together. Under ‘Luxury’ category, there is no compatible PROTON product as to
compare with Toyota Camry or Honda Accord. However for ‘Executive’ category, we
are comparing PROTON Perdana against Toyota Altis and Honda Civic. PROTON Waja
is grouped together with Toyota Vios and Honda City while for MPV category, we
grouped the newly launched PROTON Exora with Toyota Avanza. As for compact car
category, we put PROTON Savvy, Toyota Yaris and Honda Jazz in the same group.
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22. From here we figure that PROTON cars are available in almost all product categories as
what the competitors have. In term of price, we see that for most of the categories,
PROTON cars are more competitively priced rather than Toyota or Honda.
4.4.POINTS OF PARITY AND POINTS OF DIFFERENCE
4.4.1. Points Of Parity (POP)
Points of parity associations (POPs), according to Keller (2008), are not
necessarily uniquely attached to one brand but may in fact be shared with other brands.
PROTON has managed to achieve category points of parity with its car models extension.
PROTON cars have always portrayed themselves as one of the competitive market leader
in the local automotive industry with its different car design accommodating to different
target market. Exora, for instance, is launched to target to hit on the mushrooming of
MPV in the market. Exora’s characteristic is much similar to its tight competitor, Toyota
Avanza and Nissan Grand Livina. These three different car models somehow share the
same market requirement to accommodate to the family-based consumers.
PROTON has always benchmarks itself against the highest international standards when
it comes to passive safety. Generally, the European Safety Standard is used when
controlling the refinement of quality as it is currently the most stringent of standards
available. It also refers to other globally available standards such as Australian Design
Rule (ADR) and Saudi Arabian Standards Organisation (SASO)/Gulf Standards and
adopts the best of these standards as a benchmark. To ensure that compliance is met
across the board, PROTON has ensured that all safety requirements to be 20 - 30% more
stringent than the benchmarked figures as set earlier. The test results, thus far, have
shown that PROTON has not only achieved the targets set but exceeded most of them as
well. The same practice, too, has believed to be applied to other brand of automotives in
the local market.
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23. As a car manufacturer and distributor, PROTON has been able to satisfy its consumers in
producing cars that meet the minimum requirement at generic product level and expected
product level in terms of its performance, quality, price and design, which allow them to
compete with others in the automotive market.
4.4.2. Points Of Difference (POD)
According to Keller (2008), point of difference (POD) refers to attributes or
benefits that consumers strongly associate with a brand, positively evaluate, and believe
that they could not find the same extent with a competitive brand. Some marketers in the
Western might relate POD as unique selling proposition (USP). Both of them carried
almost the same character, which allows them to be different from rivals in terms of
uniqueness, quality, price, etc.
PROTON stands a strong POD as it appears to be the first national car manufacturer,
followed by Perodua. This has differentiated them from the various cars marketed in
Malaysia whom are solely foreign manufacturers, ie Japan and USA. PROTON come
into sight with its nation pride and it has successfully tackled the interest of the local
whom are seeking for an aura of patriotism and unity.
The relatively low car selling price of PROTON is attributed by the government policy,
which is said to be the most interventionist regime among the ASEAN countries. As the
national car manufacturer, PROTON enjoys a certain amount of protection against
foreign competition in the form of tariff and other non-tariff barriers. The higher import
duty for foreign passenger cars is between 140-300 percent, based on engine
displacement. These policies have massive impact on consumers, especially those who
are value-conscious and seeking for a quality and compact cars at an affordable price.
It is often not an issue in enquire about such PROTON cars with its distribution channel
through the nationwide dealers. PROTON has successfully sustained its market position
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24. through the support shown by its distribution dealers as well as the vendors and suppliers.
As mentioned in its Financial Report (2008), Proton is clearly committed to enhancing
efficiencies within its distribution network. Instead of dealership with various parties,
PROTON has invested in vendor-based system. The system has enabled PROTON to
take care of its second tier network by virtue of tiering system.
To compete and distinguish itself from other in the competitive automotive industry,
PROTON strongly associates its brand with both the functional (performance-related)
considerations and abstract (imagery-related) considerations.
PROTON has emphasized on its commitment towards caring and quality by
incorporating them in its core value and quality policy. PROTON’s quality policy is to
achieve its commitment, PROTON will:-
• Ensure quality as the Number One work ethics in all operations;
• Establish an effective and efficient Quality System based on the requirements of ISO
9001:2008 standards;
• Provide adequate skills and knowledge to all levels of personnel through systematic
and structured training programmers;
• Provide a culture and environment of continuous learning, improvement and
innovation towards total quality excellence;
• Provide a conducive, safe and healthy working environment in which people like to
work and prosper.
5. DECISION CRITERIA
5.1 Business Proposition
Based on the above problem identification and problem analysis, our group has come out
with business proposition to mitigate the problems identified by introducing new concept
car known as Proton Exora 2. Additional new product features for Proton Exora 2 will be
introduced by applying new innovations technology, increase in fuel efficiency and
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25. environmental friendly concepts with emphasis on convenience and safety. We will
explain further the additional features to be enhanced for Proton Exora 2 under possible
solutions.
5.1.1 Objective
The objective of this marketing plan is to recommend a business proposition
which is measurable and attainable by firstly identifying Proton’s long-term goal and
short-term goal. Proton’s long-term goal is referring to Proton’s vision and core value
while its short term goal refers to Proton’s mission to achieve the objectives. The
objective of the marketing plan in short term is to introduce new concept car, Proton
Exora 2 by early of year 2011 by developing marketing strategies and plan.
5.1.2 Corporate Vision and Core Value
Proton’s vision is to become Asia’s premier automotives brand that connects with
people and provides products, which become life companions. The PROTON Way is the
corporate mantra established by Proton Holdings Berhad, mainly towards its employees.
As per annual report 2009, the employees working in PROTON are expected to be highly
dedicated to the group’s long-term success. Every employee shall operate under the
group’s shared values as guidance in dealing with each other and the customers. These
values form the foundation level of how the employees work and bring in business in
return. Hence, Proton embraces The PROTON Way that consists of its 6 core values with
descriptions as follows:
CORE DESCRIPTION
VALUES
Quality We make products that work the first time, every time.
Customer Customers are the source of our income. We deliver on our promises to
focus our customers’ satisfaction.
Innovation We challenge convention, always seeking new and better ways of doing
things. We view change as opportunity.
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26. Teamwork We trust, respect and share knowledge to foster teamwork at the
workplace.
Speed We have a “can do” attitude and will not rest until the problem is
solved. We have an inherent sense of urgency in everything we do.
Caring As a responsible corporation citizen, we invest in safety, health and the
environment.
Sources: PROTON Annual Report 2009 – Proton’s Core Value
5.1.3 Mission
Proton’s mission in its short-term goal is focusing on three main attributes that
distinguish itself from its competitors as follows :-
a) Economical – providing cars which are affordable, cost efficient and value for
money;
b) Caring – providing customer satisfaction and its social corporate responsibility as a
truly Malaysian car manufacturer and to enhance its Customer Relationship
Management (CRM)
c) Quality – providing a consistently improved product and customer experience.
Hence, by introducing new concept car known as Proton Exora 2, Proton expects
that it will improve its market share in the automotive industry and improves its ranking
in future.
5.2 Target Market
The process in identifying the consumer target for new Proton Exora 2 is important due
to the fact that consumers tend to have different brand knowledge structures and thus they
will perceive differently for the products or services. Proton has successfully identified
their target market, according to the segmentation bases namely behavioral, demographic
and psychographic factors.
5.2.1 Behavioral Factor
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27. Under the behavioral segmentation, it is clear that PROTON has been targeting
consumers who came from the different background status with different model of cars
respectively. They are focusing for consumers who are brand loyalty and brand sought. It
will also be a good way to build up brand loyalty by continuing in recommending
PROTON Exora 2 cars to others.
Consumers who are loyal to PROTON will tend to accept the new car innovations by
PROTON and may choose to attach themselves with PROTON by joining the
membership clubs to gain more information. Hence, the new Proton Exora 2 car
innovations would tend to be accepted by consumers with strong brand loyalty towards
Proton car.
5.2.2 Demographic Factor
The potential consumers for the new Proton Exora 2 can be targeted by analyzing
the demographic factors. In the case of Proton Holdings Berhad (Proton), they are
focusing on factors such as income, age, sex, race and family when identifying the target
audience.
For our business proposition that introduces new Proton Exora 2, Proton is targeting
consumers who has family member with size of 3 to 6 members at competitive and
affordable price. Their age are ranging from 18 years onwards with family size of 3 to 6
members. In order to own a Proton Exora 2, the consumers relatively have a monthly
income of RM2,000 and above and caters for the consumer preferences for all races.
5.2.3 Psychographics factors
In terms of psychographics factors, it may include consumers’ attitude towards
life, careers, possessions, social issues or political institutions (Keller, 2008) in Malaysia.
PROTON's entry into the local automobile market in 1985 has resulted in massive
structural changes in the automotive industry, which was reflected in the shift of the
domestic car market, which previously depended on imported cars particularly Japanese
makes. Therefore, the intention and objectives of PROTON investment in the
automotives industry could influence the purchasing power of consumers who are
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28. patriotic to the country by buying a national car. Hence, there will be demand for Proton
Exora 2 cars based on the psychographics factor.
Furthermore, PROTON has not only produced cars for the local consumers but has
broadens the automotives industry to regional and international. Hence, the export market
for Proton Exora 2 will be a substantial key for PROTON to achieve its long-term
success as a credible auto manufacturer. For example, Proton Exora has received an
encouraging number of bookings at the recently concluded Thailand International Motor
Expo 2009 in Bangkok. The company’s order books were filled with 1,388 bookings
from a total of 25,220 orders placed at the Expo. The Proton Exora, which made its Thai
debut at the show was the best selling Proton model with 825 bookings, or almost 60 per
cent of total orders. Therefore, with enhancing Proton Exora existing features by
introducing new concept car called Proton Exora 2 with emphasis on increasing fuel
efficiency, convenience and safety at competitive price, this would boost further Proton
sales and market shares in the market.
In general, Proton Exora 2 target market and market segmentation can be summarized as
follows:
User status Family, housewife, retirees etc
Income At least RM2,000 and above
Age 18 onward
Race All races
Family 3-6 people
Lifestyle Medium to fairly high class
5.3 Strategy Statement
The strategy statement for this marketing plan is to introduce and position Proton
Exora 2 with new enhancement features as the premier MPV car in Malaysia and
international market by early of year 2011 by developing marketing strategies and plan.
The marketing strategy approach will seek to create customer awareness on Proton Exora
2 offered and then develop the customer base. Hence, Proton will communicate the new
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29. concept car via its promotion activities such as Proton’s websites and advertisements
placed in numerous industry magazines.
5.4 Key Planning Assumptions
Based on the target market and strategy statement for Proton Exora 2, Proton
needs to plan for designing and manufacturing cars that can meet the personality needs in
terms of design, power and size for different age groups using marketing strategic
formulation. Prior to the planning process, Proton need to learns from the past records on
Proton Exora performance, evaluating the present condition and envisioning the future
market.
There are three planning phases in value creation and delivery sequence, which could be
adopted by Proton in introducing Proton Exora 2. The first phase is by Proton choosing
the value by adopting strategic marketing via formula “Segmentation, targeting and
positioning” (STP). In second phase of providing the value, Proton will determine its
specific product features, prices and distribution, which the enhancement of the product
features will be discussed under possible solutions. The third phase is communicating the
value of Proton Exora 2 by utilising the sales force, sales promotion advertising and other
communication tools to promote Proton Exora 2. The third phase stage will be discussed
further under promotion activities.
5.5 Possible Solutions
5.5.1 New Innovations Strategies
Additional value added features to enhance the performance and sales of Proton
Exora 2 will be in focusing on fuel efficiency, convenience and safety and emphasizing
on the environment friendly vehicle.
a) Increase Fuel Efficiency
Existing Proton Exora price is around RM69,000 to RM75,000 with engine
capacity of 1.6 litre Campro CPS engine with 125hp and 150Nm of torque, powers the
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30. Proton Exora economically. Despite satisfaction obtained with performance of Campro
CPS engine under Proton Exora, however, based on comparison conducted for test drive
review, Proton Exora will not able to beat the Nissan Grand Livina’s 1.6 litre CVTC
responsive engine which in terms of fuel is more efficient and economy. This is due to
the weight of Proton Exora is more than Livina, although both engine have same 1600 cc
displacement.
Therefore, in order to increase its competitiveness in the market, our group has proposed
for new innovation in fuel efficiency for new Proton Exora 2 is to devote part of its
RM525 million R&D to fuel efficiency increase and cooperate with Perodua on
improving the technology of fuel efficiency increase (George K. Chacko, 2006). Thus,
Proton will have more attractive cars by introducing new Proton Exora 2 to market via
new technology on fuel efficiency introduced in the market.
b) New in-car software application to reduce carbon dioxide (CO2) emissions
The new innovation that Proton may introduced for its Proton Exora 2 would be
software application installed to reduced carbon dioxide (CO2) emissions by adopting
EcoDrive technology. EcoDrive is new technology developed with Microsoft technology,
which is the world’s first device that interacts directly with drivers and assist them in
changing their driving habits to reduce vehicle emissions and reduce fuel consumption.
EcoDrive is built on Blue&Me, a Bluetooth-based system developed jointly by Fiat and
Microsoft that provides drivers hands-free control over digital music players, mobile
telephones and other devices. For example in Fiat cars equipped with Blue&Me, the
EcoDrive system assesses the driver’s driving style during a normal driving day such as
the way a driver accelerates, brakes, and shifts is automatically measured and analyzed
against the car’s fuel economy and exhaust emissions. On arriving home, the driver
removes a standard USB flash drive from a USB port on the dashboard or the glove
compartment, plugs it into a computer and downloads information on the recent driving
excursion. A software application then tells the motorist how many kilograms of
emissions the car produced during the most recent drive and provides recommendation
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31. for driver to reduce those emissions by driving in a more environmentally friendly way
by consuming less fuel.
Hence, with the introduction of EcoDrive technology in Proton Exora 2, this will assist in
reducing the CO2 emission by 10 to 20% through better driving habits and position
Proton Exora as environmental friendly car producers in Malaysia.
c) Convenience and safety
Proton Exora 2 could implement few innovations using the latest car technology
for convenience and safety as follows :-
• Automatic Parking
With the latest car technology enables automatic parking, the system is able to
detect a space big enough for vehicle to squeeze into a row of parked cars.
• Pre-scan technology
Pre-scan technology shown by lasers scans the road surface before the car drives
over it. This prepares the suspension to react to the terrain accordingly and ensures
peerless ride comfort. This technology was showcased in the Mercedes F700 concept.
• Collision Warning System:
Collision Warning system, which uses radar technology with a wide-angle search
area to detect objects in front of and around the car. If the car approaches a
pedestrian, a red warning light comes on the windscreen's head-up display and a
warning signal sounds. This helps the driver to react and in most cases avoid an
accident. If the risk of a collision increases, assisted panic braking is activated
automatically to provide more pressure when the brakes are applied. With this
technology adopted by Proton Exora 2, this will reduce the number of accident in
Malaysia. This technology has been developed by Swedish car maker Volvo.
• Vehicle to Vehicle Technology
This hi-tech system is being developed by General Motors and uses wireless
technology to allow a driver in one car to receive information from another car further
ahead on the same road. This system would allow the other driver to receive this
information in sufficient time to react and therefore avoid any accident. This system
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32. could also work well with the emergency services, alerting all drivers on the
interlinked V2V technology that an ambulance was approaching and from which side.
6 RECOMMENDATION & IMPLEMENTATION
6.1.1 Action Plan- Marketing Mixes
6.1.1.1 Product
PROTON Holdings Berhad has commands a substantial market share in terms of the
Malaysia automobile industry, particularly passenger cars. Adding to the portfolio, the latest
7-seater MPV, new concept Exora 2 is introduce.
PROTON Car Model Model Tag Line Portfolio / Characteristics
Exora 2 You’ll be Amazed - - Malaysia first homegrown
MPV
Keriangan Keluarga
- Ideal family vehicle
From the possible solution, the new Exora 2, this includes powerful CamPro CPS powertrain
as well as technologically advanced bi-xenon headlights with Increase Fuel Efficiency, New
in-car software application to reduce carbon dioxide (CO2) emissions and also with
implemented few innovations using the latest car technology for convenience and safety such
as automatic parking, pre-scan technology, collision warning system and vehicle to vehicle
technology. Combined with other luxurious interior items such as leather seats and gated gear
shifter. The new improvement features like how to improve on quality of front wiper sound,
absorber sound and so on.
6.1.1.2 Price
Pricing is an important strategic issue for PROTON Holdings Berhad because it is very
much related to product positioning. Furthermore, pricing for PROTON car will eventually
affects other marketing mix elements such as product features, distribution channel decisions
and the aggressively promotions held nationwide. Pricing objectives has been set and it is
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33. clear that PROTON Holdings Berhad is marching towards the direction of profit
maximization, looking at the extensive product development and product refreshment over
the time.
The price of the car often determines the classification of various car models by PROTON.
The product prices are seemingly become competitive when competitor manufacturer, for
instance, Produa with the New launch MPV Alza in year 2009 and Toyata with its MPV
Toyota Avanza, try to match a lower market price to seize the local customer segmentations.
Generally consumers feel that the prices of PROTON’s products are affordable as compared
with other brands in the category with which it competes. For Exora 2, the retail price is
remaining same price as previous version. These cost leadership strategies will strong impact
to draw customer attention.
Models Price List
Exora 2 From RM 57,998.00 to RM 75,548.00
Sources: PROTON website (www.proton.com)
6.1.1.3 Place / Distribution channel
PROTON has 2 distribution channels which are PROTON EDAR and EON. PROTON
has reduced the number of outlets by 24% to 302 outlets as compared to 397 outlets in year
2007 (FR 2008) in an exercise to reduce cost. In general, its distribution channels are easily
accessible as it can be reached in all major towns in Malaysia. PROTON has strong
distribution channels, which will be advantages for Exora 2 to reach the target market with
effectively.
6.1.1.4 Promotion
The Exora 2, will using the existing the currently what PROTON Holdings Berhad has
been implementing Integrated Marketing Communications (IMC) over the years to promote
its respective car models, be it a new car development or the car refreshment. In order to
successfully implement IMC, several tools have been used such as advertising, promotion,
event marketing and sponsorship, public relations and publicity and lastly internet. It is
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34. often happened that different IMC campaigns are held for different car models carried under
PROTON Holdings Berhad.
I. Advertising
PROTON Holdings Berhad has used 3 means of advertising, namely the print
advertising, radio advertising and television commercial advertising. Advertising has
been utilized aggressively by PROTON whereby almost every car models have its own
advertisement, be it print or electronic media. For instance, PROTON Exora has its own
print advertisement carrying the tagline ‘You’ll be Amazed- Keriangan Keluarga. For
Exora 2, we will enhance more with the same tag line again and add on additional new
and improved product features.
From the concept of advertisement layout, the contingency you may find that PROTON
is putting significant emphasizes on its car Unique Selling Proposition (USP). As for the
television commercial, The Exora 2, must successfully portrayed the sleek design and car
performance for the new improvement feature with new additional features. That will
very much help on the retail car selling price of the Exora 2.
II. Sales Promotion
Sales Promotions Selling Points
Drive for Cash Cash will be given to the lucky-draw of
new PROTON car owner
PROTON XChange Old PROTON car owner to trade-in their
car with an additional RM5,000 cash
voucher to purchase a new PROTON car
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35. As for PROTON Holdings Berhad, they have designed sales promotions from time to
time in order to capture the attention of local consumers. These impressive sales
promotions often success when PROTON uses both the price-cut and value-added type
of promotional designed. For instance, PROTON XChange programme allows the
consumers to trade-in their PROTON car with additional RM5,000 to own a brand new
of Exora 2.
However, PROTON Holdings Berhad usually engaged the consumers with their
customer franchise building promotions like car-testing, demonstrations and noncustomer
franchise building promotions such as premiums. These promotional items will
somehow enhance the attitudes and loyalty of consumers towards PROTON and
eventually will affect its brand equity.
III. Event Marketing and Sponsorship
As a main sponsor in the major sports event in Malaysia, PROTON Holdings Berhad has
actively involved in engaging the public with the events they sponsored. By being the
sponsor for these events, PROTON Holdings Berhad will be able to enhance their
corporate image dimensions. This step is a soft sell and a means to improve the public
perceptions that is reliable, social-conscious, etc. The consumers are expected to credit
PROTON and favour it in their purchase decision on the cars.
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36. Sports Events
- Le Tour de Langkawi
- 3-year sponsorship for A1-Team Malaysia
- PROTON’s Football Club to play in the Malaysian Super League
- PROTON Malaysia Super Series Badminton Tournament
- Malaysian Open Bowling Championship
- World Rally Super2000 in 2008
- Formula 1 Sepang Circuit
- Lotus Team- Formula 1 in 2010
Social-causes Events
- ‘Program PINTAR’ by adopting 2 schools near Tanjung Malim, Perak
- PROTON Diploma in Engineering under Ministry of Higher Education
- Malaysian Skills Competition for the Automobile Sector
- Majlis Anugerah Kecemerlangan Akademik PROTON for children of employees
For Exora 2, with the current sponsorship event available for PROTON is many, that will
easy to promote for Exora 2 with advertising program which collaborate with right events
like Formula 1 motorsports at sepang, A1 race motorsports, PROTON’s Football Club to
play in the Malaysian Super League, PROTON Malaysia Super Series Badminton
Tournament, Le Tour de Langkawi and so on to reach the target market.
IV. Public Relations and Publicity
Public relations is the management function which evaluates public attitudes, identifies
the policies and procedures of an organization with the public interest, and executes a
program of action (and communication) to earn public understanding and acceptance.
The role of public relations is often relate the clients, here refers to PROTON Holdings
Berhad, with its general public, customers, stockholders, suppliers and employees. The
tools usually involved press releases, press conferences, exclusives, interviews,
community involvement and lastly the Internet.
V. Interactive / Internet Marketing
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37. With the advancement in the information technology, PROTON Holdings Berhad
with its official website, www.proton.com, has managed to capture the market share.
Interactive marketing, particularly, allows a 2-way communications as compared to the
traditional forms which are only one-way.
For the Exora 2 campaign, customers can simply logging onto the website www.proton-
edar.com.my to do activities for searching, altering information, inquires and responses to
questions and to apply for hire purchase transaction with PROTON Commerce’s e-
Finance system are immediately advised as to whether their applications have been
rejected or conditionally approved, subject to the submission of relevant supporting
documents.
PROTON Holdings Berhad has also integrated web strategies with other aspects of IMC
programs, i.e. media advertising. Media advertising in PROTON’s website to the internal
advertising in the web portal, such as pop-up flyer and interactive 3-D flash for different
car models. These advertisements will create a different visual experience to the online
viewers as compared to the conventional media.
6.1.2 Implementation - Campaign Flowchart/Gantt Chart
The scheduling of the IMC efforts is based on a Flighting Method which employs a less
regular schedule with intermittent periods of advertising and non-advertising. At some
phase, there would be heavier promotional expenditures and at other times, there may be
no advertising cost incurred at all. Advertising may increase during certain periods such
as F1 motorsport event in sepang, PROTON Malaysia Super Series Badminton
Tournament, Malaysian Open Bowling Championship.
The Campaign Flow chart/ Gantt chart is shown in Appendix.
6.1.3 Evaluation- Measures of Effectiveness
As this campaign is a short term campaign i.e. over 1 year, we are proposing the
following measurement / evaluation:
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38. No. Promotion Mix Measurement / Goals
1. Advertising on television, To determine the effectiveness, there is a need to
radio, magazines, conduct a survey by engaging professional market
newspapers, poster billboards research firms such as Synovate, AC Nielson, etc.
However, as we are only advertising on a small scale
and each printed ad (exclude poster billboard) comes
with a coupon for discount, we will measure the
success rate based on the cut out coupons received.
2. Sales promotion – during Based on the number of special promotional sets
festivities or special sold or number of patrons during the event, etc.
occasions
3. Internet / Interactive The effectiveness is based on the number of traffic
Marketing generated on the website throughout the campaign
period.
Note :
Effect of event sponsorship and PR related events are hard to measure as it is intended to
build a positive image for Proton and does not instigate immediate response to sales.
Aside from this Proton also conducts its own in house survey (form as attached) to gauge
the level of satisfaction, source of awareness etc.
6.1.4 Recommendations
Our recommendations are trying to address the performance (functional
characteristics) and imagery (symbolic characteristics) issues negatively affecting overall
PROTON’s product brand image at the moment. PROTON has shown many
improvements recently, however, it has yet to strongly improve the consumers’
perception towards the brand. It is hope that with the above recommendations, it can help
to enhance further its effort in strengthening is brand image and values
a. Improve performance
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39. Recommendations to improve performance will be focused on the product attributes and
benefits with the aims to enhance driving experience and build brand personality. These
recommendations are mainly based on feedbacks frequently mentioned by the website
respondents (www.motortrader.com.my).
i) Engine
Generally consumers feel that PROTON car is under power. This is due to the engine
used. For a car, engine is the major or critical part of the product, it is resemble the heart
of a human being. Therefore, to produce a car with premier quality, priority must be
given to its engine.
In this area we recommend PROTON to seriously invest in R&D and technology, and
expedite its effort in developing strategic partners to strengthen quality, manufacturing
and know-how which they are unable to do it themselves. PROTON may have invested
in its technology; however, its efforts in this area seem insufficient. Consumers expect it
can provide a better technology, for instance Perodua offered its DVVT engine, but
PROTON has continued using its CAMPRO engine for all the cars for decades. In this
regard, we recommend considering partnering or joint venture with those reputable
engine manufacture, such as manufacturer from Europe country (BMW, Mercedez,
Renault or Peugeot) or Japan (Mitsubishi, Honda).
ii) Interior Design
Interior design of the car refers to its overall instrument panels such as the seat,
the dash board, the other accessories and special feature in the car which is perceived as
not stylish. The materials used are also felt as average low quality. As the car get older,
the compartments especially its dashboard area start to produce uneasy noise, and the
sound prove of the car is pretty poor especially on high speed driving. Throughout the
years, there is not much improvement in this area which can WOW the consumers. In
fact, all these features will help to create driving experience. Interior design with
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40. aesthetic features and good sound protection will make a driver feels joy and excited thus
creating a strong positive driving experience.
iii) Body frame
The next consumer perception that PROTON should address is the structure of its
products in terms of solidity. Generally consumers think that its body frame is very
vulnerable, when they are driving the car at higher speed, they feel it is light and have a
sense of floating and unsafe. Although have been improved for model like Pesonna,
Exora but that still achieved customer satisfaction level. To improve this area, again
investment in R&D is almost important. We recommend PROTON to seriously study the
change of material. An alternative will be working with partners or joint venture with
company specialized in frame manufacturing.
iv) Exterior Design
Exterior design is the key product attribute that plays an important role in enhancing
the overall product brand image. We will look at PROTON exterior design in terms of:
• Shape
Many feel that the overall design of PROTON is not unique enough. PROTON
must invest in building its creativity and innovative on it to have own
characteristic outlook/shape of product brand image.
• Color
Product color the range offered by PROTON generally not attractive or unique.
As one of its core values is customer focus, we recommend PROTON to be really
customer oriented, knowing what the customers want and offer the range of colors
that appeal to different market segment effectively.
b. Focused on Service Excellence
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41. However, having all those functional and symbolic characteristics will not do
PROTON brand any good if it doesn’t offer excellence after-sales service to ensure that
PROTON continues to be the preferred choice for those who purchase cars from them. It
is encouraging to see PROTON has been strengthening their customer touch points,
especially in creating a more friendly approach towards customer care by introducing its
i.Care, a customer management centre totally dedicated to the needs of their customer
which is important in brand building and earn trust from customers.
CONCLUSION
PROTON as the first Malaysian car manufacturer has established a very strong identification in
the Malaysia automotive market. However, the consumers perceived that it has not delivered
what is promised and expected. As a result, PROTON is unable to create positive response in the
head and heart of its consumers. PROTON still has tremendous potential and capacity to perform
better in offering its customers products and services of premier quality.
The new concept of Proton MPV Exora 2, is hope that the enhanced and new brand images and
recommendations will be able to help PROTON establish a positive response in the consumers’
memory which will lead the company to achieve its vision of becoming a Life Companion for its
consumer. This will eventually enhanced and strengthen it sources of brand equity in order to
compete ahead.
Based on its recent performance, PROTON has indeed working very hard to live up its working
philosophy of producing the right car at the right time, for the right market, at the right price.
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42. REFERENCE
1. PROTON’s Annual Report 2009.
2. Kotler, P. and Keller, K.L. (2009). Marketing Management (pp 53, 77-84) New Jersey:
Pearson Prentice Hall
3. PROTON’s official homepage. (www.proton.com) & (www.proton-edar.com.my)
4. The Star, Wednesday 21,2007, Many Issues Still for Proton to Address.
5. The Malaysian Insider, Sunday, March 28 2010, Low Export Not Proton’s Real Problem
6. The Malay Mail, The Problem with Proton, by editor Leow Ju-Len, June 12, 2009.
7. A new in-car software application helps drivers reduce CO2 emissions. Accessed on March
22, 2010 from
http://www.microsoft.eu/Stories/Viewer/tabid/77/articleType/ArticleView/articleId/330/Men
u/8/A-new-in-car-software-application-helps-drivers-reduce-CO2-emissions.aspx.
8. Quirk, J. (2008, January 28). Car Technology: The Latest Innovations In Engine
Development And Safety. Sky Motoring. Accessed on March 27, 2010 from
http://news.sky.com/skynews/Home/Sky-News-Archive/Article/20080641302627
.
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