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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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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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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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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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 -

June

Jan –

June

Jan -

June

Jan –

June

Jan –

June

Jan -

June

    2007 2008 2007 2008 2007 2008

1 Perodua

75,4

83

83,5

89 34.2 30.1 1 1

2 Proton

46,9

55

72,9

57 21.3 26.2 2 2

3 Toyota

36,5

72

53,1

29 16.6 19.1 3 3

4 Honda

14,1

75

16,7

66 6.4 6 4 4

5 Nissan

8,3

36

14,9

25 3.8 5.4 6 5

6 Naza

10,8

98

6,7

09 4.9 2.4 5 6

7 Inokom

4,3

33

3,8

92 2 1.4 7 7

8 Mitsubishi

2,3

41

3,2

40 1.1 1.2 10 8

9 Daihatsu

2,3

76

2,6

70 1.1 1 9 9

10 Suzuki

7

39

2,6

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

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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

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

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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.

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.

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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

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

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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.

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.

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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.

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.

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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

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

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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

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

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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.

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.

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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.

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

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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.

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

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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.

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.

Page | 16

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

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.

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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.

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

Page | 18

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

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

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• Competitively priced products

• Extensive nationwide distribution

network

• Good corporate governance

• Influence of patriotism as Proton is

national car-maker

• Government support

• Reputation of poor product

performance and functionality

• High cost to expand their operation

by advanced technology

• Short history in automotive

industry

• Vulnerable to increasing material

cost (steel, etc)

Opportunities

• High demand on the products

• Opportunity to grow their business

globally

• R&D Development

• Government support

• After-sales services

• Collaborations within automotive

industry

Threats

• Competitors - local & international

brands

• A lot of substitute products in

market

• Fast changing and advanced

engineering technology

• Economic downturn – decrease of

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

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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.

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

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Luxury Executive Family MPV Compact

Proton - Perdana Waja Exora Savvy

Toyota Camry Altis Vios Avanza

Wish

Yaris

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.

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

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Brand

Category

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.

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.

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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

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;

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• 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

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

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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

VALUES

DESCRIPTION

Quality We make products that work the first time, every time.

Customer

focus

Customers are the source of our income. We deliver on our promises to

our customers’ satisfaction.

Innovation We challenge convention, always seeking new and better ways of doing

things. We view change as opportunity.

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;

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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

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

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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

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.

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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

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

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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

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

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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

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

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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

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

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Exora 2 You’ll be Amazed -

Keriangan Keluarga

- Malaysia first homegrown MPV

- 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

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.

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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

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.

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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

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.

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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

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.

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.

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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

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

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

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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:

No. Promotion Mix Measurement / Goals

1. Advertising on television,

radio, magazines,

newspapers, poster billboards

To determine the effectiveness, there is a need to

conduct a survey by engaging professional market

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

festivities or special

occasions

Based on the number of special promotional sets

sold or number of patrons during the event, etc.

3. Internet / Interactive

Marketing

The effectiveness is based on the number of traffic

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.

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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

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).

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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

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

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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

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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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/Menu/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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