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Proton mm combined

  1. 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 080108Linda Sim Siew Kian CGA 080016Teh Chye Beng CGA 080035 Page | 1
  4. 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 Page | 4
  5. 5. manufacturing sector in Malaysia, the automotive industry is hoped to boost theindustrialization 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 10Table 1: MAA Vehicle Sales, Market Share and Ranking Summary for Top 10 PassengerCars & Commercial Vehicles in Malaysia for Jan to June 2008The deregulation of the industry and introduction of strong affordable regional automotivebrands from Japan, Korea and China has made the industry to be more competitive. About 90per cent of the cars sold in Malaysia are produced by the local manufacturers, namelyPROTON and PERODUA as shown in Table 1. The automotive industry has played an Page | 5
  6. 6. important role in the development of the manufacturing sector in Malaysia. With thesuccessful implementation of the first National Car Project, the industry has to widen itsperspective 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 hasto strengthen its competitiveness through greater emphasis on product and marketdevelopment. The industry also has to carve a niche in the export market and foster closerlinkage with the target destinations.The prime reason that backed the growth in Malaysian auto market is higher orders from theconsumers wishing to buy new vehicles accompanied by the launch of latest makes across alarger part of the segments. The good sales displayed by car models like PERODUA andPROTON supported the overall vehicle sales. Also, the productive steps like thetechnological enhancements introduced by the Malaysian automobile industry to assist theauto sector helped the market to grow significantly over the years. In 2008, MAA PresidentDatuk Aishah Ahmad expected passenger vehicles to boost vehicle sales due to the backlogof orders to be supplied. Therefore, there was an increase in sales for PROTON andfurthermore, consumers had favorable sentiments about the market conditions. At the sametime, auto companies were introducing new models, particularly in the lower engine capacityrange to sustain the current buying interest.There was also the shift of consumers from expensive car models to the reasonable nationalcars 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 theimprovement 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 ofcountries around the world. This has caused the sales of automobiles to remain low as banksare increasing their interest rates to brace for the low volumes. Besides the global crisis, therise in oil prices has also affected the sales of Malaysian automobiles. Sales are expected todecline as consumers decide to hold back in their purchasing and this will definitely affectPROTON as shown in their sales. Page | 6
  7. 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 carmakers 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 Page | 7
  8. 8. introduction of new models with higher profit margins, stronger sales volume, savings fromgroup-wide cost-reduction initiatives, income from the sale of rights for use of IntellectualProperty Rights relating to a vehicle platform (for the China market) as well as the R&Dgrant.For the year 2008, PROTON’s focus would be in the core areas of product, quality, costefficiency and distribution network. PROTON aims to have a strong product portfolio byintroducing “the right car, for the right market, at the right price and at the right time”. Thiswas reflected in the organisation’s newly introduced Exora, Persona and Saga Models, withthe latter powered by the new CamPro IAFM engine. PROTON has also continued to updateand refresh existing product lines to entice and attract customers.2.1. Products and ServicesPROTON’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 2.0litre engines satisfies a wide spectrum of customers both locally and abroad. Page | 8
  9. 9. PROTON cars are also known internationally as competitive and innovative automobiles.PROTON now is being exported to 50 countries like United Kingdom and continentalEuropean markets, thereby realizing its goal of being an internationally successful Malaysianautomobile manufacturer.The first PROTON car was exported in 1986. The number has increased steadily and in1998, 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 ofChina, Turkey, United Arab Emirates and United Kingdom. The models being exportedinclude Wira, Sedan/Aeroback, Satria and Putra.PROTON’s exports are the most successful in the United Kingdom due to its competitivepricing strategy and its buyback arrangement with car rental companies in the country.PROTON also benefited from the Generalised Preferences Scheme that made it easy forthem to enter the United Kingdom market. PROTON has introduced a few upgraded modelswith higher engine capacity and sporty design to establish its presence internationally.PROTON is focusing to be more customer-oriented and by producing competitively pricedand innovative products. It is therefore contributing to the Malaysia’s attainment of Vision2020.3. PROBLEM IDENTIFICATION3.1. PROTON ControversiesControversies surrounding PROTON till date include the abuses and improprieties in themalpractices issue of approved permits (APs) for imported cars, entry of foreign cars atbelow-cost prices, the 20-year protectionist policies accorded to PROTON, and otherquestions concerning the national automotive policy. Page | 9
  10. 10. The 20-year protectionist policies accorded to the national automaker PROTON was thegovernment ways of emulating other vehicle manufacturing countries. Tun MahathirMohamad, the former premier and present advisor to PROTON once said that without suchpolicies, Malaysia would not have a car industry, admitting that Proton had gained 80 percentmarket share "benefitting from protectionism,” and PROTON otherwise would not have beenable to penetrate foreign markets due to the economies of scaleMalpractices 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 hasbeen identified that lower prices for foreign cars is due to volume and PROTON would notbe able to achieve this because of their protected car market.3.2. Business ModelIt is hard to see PROTON ever making money consistently with the current business modelthat it operates. At the heart of the car business is all about two basic things: cost structureand 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 onlymake money when they are running at or near full capacity. PROTON has not one, but twofactories that can output a combined maximum of 1.2 million cars a year, yet it builds only156,845 units.Given that the vehicle market here is worth half a million units annually, even if we rousedenough 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 Page | 10
  11. 11. PROTON was established 25 years ago by Tun Mahathir Mohamad as part of an ambitiousnational industrialization plan, but it has long been criticized for poor quality andunimpressive design.PROTONs major problem, as everybody knows, is quality control. Complaints typicallyrelate to failures in power windows, doors and alarm systems. It’s not unusual (verycommon, to be precise) to hear public complaint about the overall poor quality vehicles byPROTON over the years and indirectly affecting the financial result of the company, when itssales dwindled tremendously and continuously losing market share and subsequently, theprofit margin eroded substantially too.PROTONs head of body engineering once told a local newspaper that the benchmark forworld quality class cars is two defects per car but from our observation, world class qualitycar manufacturers have been aiming for zero defects all this time. "DO IT RIGHT THEFIRST TIME" – slowly but surely the learning curve must show positive result. Mostsuccessful companies are.3.4. Economic factors 3.4.1.Deregulated marketPROTON s market share has slumped over the years, as it faced difficulties coping in a newderegulated market.The government has urged PROTON to forge a partnership with a foreign automaker to giveit the expertise and economies of scale that it needs to survive, but talks with Volkswagenand General Motors have collapsed when the Government decided it is best to keep thePROTON’s ownership or risk losing control over the design and production of the nationalcar maker. 3.4.2.The ever-increasing cost of manufacturing and raw materials Page | 11
  12. 12. PROTON, in February 2010 had made net profits for two quarters in a row due to loweroperating costs and increased sales.However, it still booked a net loss of 32.92 million ringgit (10 million dollars) for the ninemonths to December, although it was smaller than the 590.448 million ringgit loss a yearearlier.The PROTON chief said the carmaker would proceed with expansion plans despite thesoaring cost of raw materials. 3.4.3.Shaken consumer confidence stemming from the threat of global economic slowdown and an over-crowded operating environmentDespite the challenges that persistently impact the industry, which include the ever-increasing cost of manufacturing and raw materials, shaken consumer confidence stemmedfrom the threat of global economic slowdown as well as an over-crowded operatingenvironment. Globally, the automotive industry is going through a period of change,reflecting both the rapid change of technology, increasing need to comply with continuallymore stringent regulatory requirements and increasing liberalization of markets. Higherpetrol prices and increased cost of raw materials and manufacturing resulting in lower profitmargins, also posed a challenge. In addition, the declining trend for vehicle sales commencedin early 2006, because the macro-economic factors, higher interest rates and stricter lendingpractice.3.5. Policy 3.5.1.Export PolicyAccording to Deputy Minister of Finance Datuk Dr Awang Adek Hussin, PROTON exporteda total of 18,426 cars in year 2009, from the 108,405 that it built in 2008. Although the focusnow is on exports, both numbers are cause for concern for the national car company. Page | 12
  13. 13. In the lightning pace of the automotive industry today, it is small wonder why PROTON isfinding it hard to keep up overseas — and increasingly in Malaysia as well. Productlifecycles are getting ever shorter that it feels as though carmakers are introducing new modelline-ups virtually every year. PROTON in contrast unveils on average a new model or modelvariant a year. This replacement rate simply will not do for consumers who have grownaccustomed 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 thebusiness. When Toyota, Honda and the rest were springing models left and right, PROTON’slanguid pace with facelifts and replacement models failed to hold buyers’ interest. It is slowbecause 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 thatPROTON exports to. That gets you a Kia Picanto and £2,000 in change. Or, if you want toblow 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 108,405do it no favor at all. Unable to generate the kind of volumes that any mass-marketmanufacturer needs to be viable, PROTON cannot hope to match the scale — or enjoy thebenefits — that its competitors have.To have PROTON address its dismal exports with urgency is to have it treat a symptom andnot the problem. Exports are poor because the fundamentals of the company are poor. Itsproduct replacement cycles are far too long for today’s market and it simply doesn’t have thekind 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 solvethese problems first. And it is unlikely that it will be able to do it alone. It may have oncebeen flush with cash but this is no longer the case. A fiercely competitive market at home hasmade sure of that. Page | 13
  14. 14. To do this, PROTON will need a partner that can help shoulder the exorbitant costs ofkeeping up with the Joneses. Or better still, to give it access to technology that is alreadybeen 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 protractedflirtations. Now, Volkswagen is busy with its own marriage to Porsche. And the rest of thebig players in the world are also busy licking their own wounds.Fresh from the economic crisis, PROTON will have fewer healthy partners to choose fromand it is itself no longer the jewel it once was. But the situation remains unchanged, then asnow. Without outside assistance, exports will be the least of PROTON’s concerns. 3.5.2.Protectionism policyThen there is the matter of price. In Malaysia, PROTON prices are kept comparatively lowerto foreign manufacturers through protectionism. This, unfortunately, is a crutch the companycannot count on in foreign markets. Protectionist policy has largely been blamed forPROTON s stagnating performance.3.6. Staff and VendorsPROTON’s Managing Director, Syed Zainal Abidin, was once quoted saying that 60percent of defects in PROTON cars were due to poor quality components from vendors, butadmitted 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, theyshould run it like a proper conglomerate and not as a charity organization, which meansincompetent vendors and vendors which were being overlooked, contributing hiccups anddownturn of sales performances and do not adhere to the standard set must be removed andreplaced. Page | 14
  15. 15. In another word, if PROTON is to talk about "zero-defect", zero tolerance towards vendorswho can’t deliver must come into the picture as a complimentary to the campaign, otherwisethe 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 itstruggling to compete against foreign competitors. The management had urged theemployees 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 isputting PROTON on a better footing, to improve quality, product and profit. We need to beprepared 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 righttraining and tools. Consistent and relevant training is crucial to ensure that their employeeshave the knowledge and tolls to help drive PROTON forward.3.7. OthersPROTON 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 inthe way BMW and PSA Peugeot-Citroen are working together to develop new engines andtechnologies. It is of some comfort, therefore, to learn that the Government is still willing toconsider a strong strategic foreign partner in the future. A tie-up with a strong foreign brandwill enable PROTON to penetrate more discerning markets.In the longer term, many of the green engine technologies that are emerging as a result ofrising fuel prices and global warming would dictate the direction of automotive development,and these are beyond PROTON capabilities. Page | 15
  16. 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 Page | 16
  17. 17. 4.1. Market OverviewOnce known as the king of the road, PROTON has seen its fortunes dwindle due to growingcompetition from local and foreign competitors as Malaysia opens up its auto market.Malaysia is Southeast Asias largest passenger car market with 497,459 vehicles sold in theyear 2008.Malaysia’s auto market is dominated by its national cars, PROTON and Perodua which inyear 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 2years, 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 30percent in year 2007 and 2008. Perodua, the second national cars manufacturer has takenover 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 differentiationstrategy, although the market share fell from 40% in 2005 to 32% in 2006( allowing Perodua to overtake PROTON as the countrys largestpassenger carmaker for the first time. Total losses in 2007s financial year has climbed toRM169 million and this was caused by the extensive promotional discounts by its tightrivals, according to PROTON. Page | 17
  18. 18. Figure 1: Show the Overall market share of passenger car market. (from MAA vehicle salesresources) Noted : 2006 data is not publishedTo date, PROTON is facing severe competition in its home market as government mayremove rules that protect local car makers when it reviews the 3-year-old auto policy to boostforeign investment. This reduction of the protection accorded to PROTON may increase itsdifficulties to become market leader again. Although government has cut import taxes, it stillimposes high taxes on locally assembled foreign cars and this has given protection to nationalcarmakers.Looking at the industry overview, the year 2009 witnesses a tremendous improvement inmotor vehicle sales. This uptrend, which began from the second half of 2007, was a welcomerelief to the industry but unfortunately the momentum could not be maintained. Afterrecording peaks of more that 50,000 sales in April, July and September 2008, it saw asignificant drop of 21% after that, which was due to the global economic meltdown markedby the collapse of major financial institutions in the United States. This was furthercompounded 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 ofaggressive sales campaigns, and strong economic growth of 5.75% in 2008. But again, in Page | 18
  19. 19. 2009, MAA has forecasted that there would be a decrease of 12.2% of passenger carscompared to 2008. The forecast was well-founded on the current global financial andeconomic climate, reiterated by the contraction of GDP growth. Other factors may includefluctuating oil and commodity prices as well as unfavorable FOREX rates ( terms of financial performance, for the financial year ended 31 March 2009, PROTONrecorded a loss after tax of RM301.8 million, although there was improved revenue ofRM6.5 billion. This decline was largely due to the one-off exceptional provision for theimpairment of property, plant and equipment and inventory write-down for certain modelsimpacted by declining demand. In addition to that, PROTON’s financial performance for thesecond half of the financial year was also adversely affected by the accelerated amortizationof dies and jigs for certain models as well as higher commodity prices, increased costs ofcomponents 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 Page | 19
  20. 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 sales4.2.1. StrengthPROTON’s strength lies in its competitively priced product. Its extensive nationwidedistribution network helps the industry to move forward with the support from Malaysiangovernment. The company also has good corporate governance, and highly regarded bymany Malaysians out of patriotism they feel for this country as PROTON is the nationalcar maker.4.2.2. WeaknessesInexperience, apparently due to short history in car making certainly could not be anexcuse for PROTON to come out with low quality products. This could cost PROTONvery high as over time, it might jeopardize PROTON’s reputation. Poor productperformance and functionality is something that cannot be allowed to happen and qualityalways needs to be monitored and assured to the customers. Other than that, operationalcost and other expenses is always a challenge to any industry and for the case ofPROTON, it is more vulnerable to increasing raw material cost such as steel particularly.4.2.3. OpportunitiesThe demand for cars in any segment is always there, except for more trying times likeduring economic crisis. There are always opportunities for PROTON to be a globalplayer. Nobody ever say that cars should only be manufactured by Japan, Germany andother western countries though of course these countries have the reputation of makinggood cars long before PROTON and Malaysia comes into the picture. Collaborationswithin industry players could enable PROTON to do many things. Through research anddevelopment more innovative products could be invented, and ensure that PROTON as abrand name remains in the industry. Page | 20
  21. 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. Page | 21
  22. 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. Page | 22
  23. 23. As a car manufacturer and distributor, PROTON has been able to satisfy its consumers inproducing cars that meet the minimum requirement at generic product level and expectedproduct level in terms of its performance, quality, price and design, which allow them tocompete with others in the automotive market.4.4.2. Points Of Difference (POD) According to Keller (2008), point of difference (POD) refers to attributes orbenefits that consumers strongly associate with a brand, positively evaluate, and believethat they could not find the same extent with a competitive brand. Some marketers in theWestern might relate POD as unique selling proposition (USP). Both of them carriedalmost the same character, which allows them to be different from rivals in terms ofuniqueness, 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 inMalaysia whom are solely foreign manufacturers, ie Japan and USA. PROTON comeinto sight with its nation pride and it has successfully tackled the interest of the localwhom 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 thenational car manufacturer, PROTON enjoys a certain amount of protection againstforeign competition in the form of tariff and other non-tariff barriers. The higher importduty for foreign passenger cars is between 140-300 percent, based on enginedisplacement. These policies have massive impact on consumers, especially those whoare 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 channelthrough the nationwide dealers. PROTON has successfully sustained its market position Page | 23
  24. 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 Page | 24
  25. 25. environmental friendly concepts with emphasis on convenience and safety. We willexplain further the additional features to be enhanced for Proton Exora 2 under possiblesolutions. 5.1.1 Objective The objective of this marketing plan is to recommend a business propositionwhich is measurable and attainable by firstly identifying Proton’s long-term goal andshort-term goal. Proton’s long-term goal is referring to Proton’s vision and core valuewhile its short term goal refers to Proton’s mission to achieve the objectives. Theobjective of the marketing plan in short term is to introduce new concept car, ProtonExora 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 withpeople and provides products, which become life companions. The PROTON Way is thecorporate mantra established by Proton Holdings Berhad, mainly towards its employees.As per annual report 2009, the employees working in PROTON are expected to be highlydedicated to the group’s long-term success. Every employee shall operate under thegroup’s shared values as guidance in dealing with each other and the customers. Thesevalues form the foundation level of how the employees work and bring in business inreturn. Hence, Proton embraces The PROTON Way that consists of its 6 core values withdescriptions as follows:CORE DESCRIPTIONVALUESQuality We make products that work the first time, every time.Customer Customers are the source of our income. We deliver on our promises tofocus our customers’ satisfaction.Innovation We challenge convention, always seeking new and better ways of doing things. We view change as opportunity. Page | 25
  26. 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 MissionProton’s mission in its short-term goal is focusing on three main attributes thatdistinguish 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 expectsthat it will improve its market share in the automotive industry and improves its rankingin future.5.2 Target MarketThe process in identifying the consumer target for new Proton Exora 2 is important dueto the fact that consumers tend to have different brand knowledge structures and thus theywill perceive differently for the products or services. Proton has successfully identifiedtheir target market, according to the segmentation bases namely behavioral, demographicand psychographic factors. 5.2.1 Behavioral Factor Page | 26
  27. 27. Under the behavioral segmentation, it is clear that PROTON has been targetingconsumers who came from the different background status with different model of carsrespectively. They are focusing for consumers who are brand loyalty and brand sought. Itwill also be a good way to build up brand loyalty by continuing in recommendingPROTON Exora 2 cars to others.Consumers who are loyal to PROTON will tend to accept the new car innovations byPROTON and may choose to attach themselves with PROTON by joining themembership clubs to gain more information. Hence, the new Proton Exora 2 carinnovations would tend to be accepted by consumers with strong brand loyalty towardsProton car. 5.2.2 Demographic Factor The potential consumers for the new Proton Exora 2 can be targeted by analyzingthe demographic factors. In the case of Proton Holdings Berhad (Proton), they arefocusing on factors such as income, age, sex, race and family when identifying the targetaudience.For our business proposition that introduces new Proton Exora 2, Proton is targetingconsumers who has family member with size of 3 to 6 members at competitive andaffordable price. Their age are ranging from 18 years onwards with family size of 3 to 6members. In order to own a Proton Exora 2, the consumers relatively have a monthlyincome 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 towardslife, careers, possessions, social issues or political institutions (Keller, 2008) in Malaysia.PROTONs entry into the local automobile market in 1985 has resulted in massivestructural changes in the automotive industry, which was reflected in the shift of thedomestic car market, which previously depended on imported cars particularly Japanesemakes. Therefore, the intention and objectives of PROTON investment in theautomotives industry could influence the purchasing power of consumers who are Page | 27
  28. 28. patriotic to the country by buying a national car. Hence, there will be demand for ProtonExora 2 cars based on the psychographics factor.Furthermore, PROTON has not only produced cars for the local consumers but hasbroadens the automotives industry to regional and international. Hence, the export marketfor Proton Exora 2 will be a substantial key for PROTON to achieve its long-termsuccess as a credible auto manufacturer. For example, Proton Exora has received anencouraging number of bookings at the recently concluded Thailand International MotorExpo 2009 in Bangkok. The company’s order books were filled with 1,388 bookingsfrom a total of 25,220 orders placed at the Expo. The Proton Exora, which made its Thaidebut at the show was the best selling Proton model with 825 bookings, or almost 60 percent of total orders. Therefore, with enhancing Proton Exora existing features byintroducing new concept car called Proton Exora 2 with emphasis on increasing fuelefficiency, convenience and safety at competitive price, this would boost further Protonsales and market shares in the market.In general, Proton Exora 2 target market and market segmentation can be summarized asfollows:User status Family, housewife, retirees etcIncome At least RM2,000 and aboveAge 18 onwardRace All racesFamily 3-6 peopleLifestyle Medium to fairly high class5.3 Strategy Statement The strategy statement for this marketing plan is to introduce and position ProtonExora 2 with new enhancement features as the premier MPV car in Malaysia andinternational market by early of year 2011 by developing marketing strategies and plan.The marketing strategy approach will seek to create customer awareness on Proton Exora2 offered and then develop the customer base. Hence, Proton will communicate the new Page | 28
  29. 29. concept car via its promotion activities such as Proton’s websites and advertisementsplaced in numerous industry magazines.5.4 Key Planning Assumptions Based on the target market and strategy statement for Proton Exora 2, Protonneeds to plan for designing and manufacturing cars that can meet the personality needs interms of design, power and size for different age groups using marketing strategicformulation. Prior to the planning process, Proton need to learns from the past records onProton Exora performance, evaluating the present condition and envisioning the futuremarket.There are three planning phases in value creation and delivery sequence, which could beadopted by Proton in introducing Proton Exora 2. The first phase is by Proton choosingthe value by adopting strategic marketing via formula “Segmentation, targeting andpositioning” (STP). In second phase of providing the value, Proton will determine itsspecific product features, prices and distribution, which the enhancement of the productfeatures will be discussed under possible solutions. The third phase is communicating thevalue of Proton Exora 2 by utilising the sales force, sales promotion advertising and othercommunication tools to promote Proton Exora 2. The third phase stage will be discussedfurther under promotion activities.5.5 Possible Solutions 5.5.1 New Innovations Strategies Additional value added features to enhance the performance and sales of ProtonExora 2 will be in focusing on fuel efficiency, convenience and safety and emphasizingon the environment friendly vehicle.a) Increase Fuel Efficiency Existing Proton Exora price is around RM69,000 to RM75,000 with enginecapacity of 1.6 litre Campro CPS engine with 125hp and 150Nm of torque, powers the Page | 29
  30. 30. Proton Exora economically. Despite satisfaction obtained with performance of CamproCPS engine under Proton Exora, however, based on comparison conducted for test drivereview, Proton Exora will not able to beat the Nissan Grand Livina’s 1.6 litre CVTCresponsive engine which in terms of fuel is more efficient and economy. This is due tothe weight of Proton Exora is more than Livina, although both engine have same 1600 ccdisplacement.Therefore, in order to increase its competitiveness in the market, our group has proposedfor new innovation in fuel efficiency for new Proton Exora 2 is to devote part of itsRM525 million R&D to fuel efficiency increase and cooperate with Perodua onimproving 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 vianew 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 besoftware application installed to reduced carbon dioxide (CO2) emissions by adoptingEcoDrive technology. EcoDrive is new technology developed with Microsoft technology,which is the world’s first device that interacts directly with drivers and assist them inchanging 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 andMicrosoft that provides drivers hands-free control over digital music players, mobiletelephones and other devices. For example in Fiat cars equipped with Blue&Me, theEcoDrive system assesses the driver’s driving style during a normal driving day such asthe way a driver accelerates, brakes, and shifts is automatically measured and analyzedagainst the car’s fuel economy and exhaust emissions. On arriving home, the driverremoves a standard USB flash drive from a USB port on the dashboard or the glovecompartment, plugs it into a computer and downloads information on the recent drivingexcursion. A software application then tells the motorist how many kilograms ofemissions the car produced during the most recent drive and provides recommendation Page | 30
  31. 31. for driver to reduce those emissions by driving in a more environmentally friendly wayby consuming less fuel.Hence, with the introduction of EcoDrive technology in Proton Exora 2, this will assist inreducing the CO2 emission by 10 to 20% through better driving habits and positionProton 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 windscreens 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 Page | 31
  32. 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 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. 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 Page | 32
  33. 33. clear that PROTON Holdings Berhad is marching towards the direction of profitmaximization, looking at the extensive product development and product refreshment overthe 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, forinstance, Produa with the New launch MPV Alza in year 2009 and Toyata with its MPVToyota 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 comparedwith other brands in the category with which it competes. For Exora 2, the retail price isremaining same price as previous version. These cost leadership strategies will strong impactto draw customer attention. Models Price List Exora 2 From RM 57,998.00 to RM 75,548.00 Sources: PROTON website ( Place / Distribution channel PROTON has 2 distribution channels which are PROTON EDAR and EON. PROTONhas reduced the number of outlets by 24% to 302 outlets as compared to 397 outlets in year2007 (FR 2008) in an exercise to reduce cost. In general, its distribution channels are easilyaccessible as it can be reached in all major towns in Malaysia. PROTON has strongdistribution channels, which will be advantages for Exora 2 to reach the target market witheffectively. Promotion The Exora 2, will using the existing the currently what PROTON Holdings Berhad hasbeen implementing Integrated Marketing Communications (IMC) over the years to promoteits respective car models, be it a new car development or the car refreshment. In order tosuccessfully implement IMC, several tools have been used such as advertising, promotion,event marketing and sponsorship, public relations and publicity and lastly internet. It is Page | 33
  34. 34. often happened that different IMC campaigns are held for different car models carried underPROTON 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 Page | 34
  35. 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. Page | 35
  36. 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 2010Social-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 Page | 36
  37. 37. With the advancement in the information technology, PROTON Holdings Berhadwith its official website,, has managed to capture the market share.Interactive marketing, particularly, allows a 2-way communications as compared to thetraditional forms which are only one-way.For the Exora 2 campaign, customers can simply logging onto the website to do activities for searching, altering information, inquires and responses toquestions and to apply for hire purchase transaction with PROTON Commerce’s e-Finance system are immediately advised as to whether their applications have beenrejected or conditionally approved, subject to the submission of relevant supportingdocuments.PROTON Holdings Berhad has also integrated web strategies with other aspects of IMCprograms, i.e. media advertising. Media advertising in PROTON’s website to the internaladvertising in the web portal, such as pop-up flyer and interactive 3-D flash for differentcar models. These advertisements will create a different visual experience to the onlineviewers as compared to the conventional media. 6.1.2 Implementation - Campaign Flowchart/Gantt ChartThe scheduling of the IMC efforts is based on a Flighting Method which employs a lessregular schedule with intermittent periods of advertising and non-advertising. At somephase, there would be heavier promotional expenditures and at other times, there may beno advertising cost incurred at all. Advertising may increase during certain periods suchas F1 motorsport event in sepang, PROTON Malaysia Super Series BadmintonTournament, 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 thefollowing measurement / evaluation: Page | 37
  38. 38. No. Promotion Mix Measurement / Goals1. 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 tobuild 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 gaugethe level of satisfaction, source of awareness etc. 6.1.4 Recommendations Our recommendations are trying to address the performance (functionalcharacteristics) and imagery (symbolic characteristics) issues negatively affecting overallPROTON’s product brand image at the moment. PROTON has shown manyimprovements recently, however, it has yet to strongly improve the consumers’perception towards the brand. It is hope that with the above recommendations, it can helpto enhance further its effort in strengthening is brand image and valuesa. Improve performance Page | 38
  39. 39. Recommendations to improve performance will be focused on the product attributes andbenefits with the aims to enhance driving experience and build brand personality. Theserecommendations are mainly based on feedbacks frequently mentioned by the websiterespondents ( Engine Generally consumers feel that PROTON car is under power. This is due to the engineused. For a car, engine is the major or critical part of the product, it is resemble the heartof a human being. Therefore, to produce a car with premier quality, priority must begiven to its engine.In this area we recommend PROTON to seriously invest in R&D and technology, andexpedite its effort in developing strategic partners to strengthen quality, manufacturingand know-how which they are unable to do it themselves. PROTON may have investedin its technology; however, its efforts in this area seem insufficient. Consumers expect itcan provide a better technology, for instance Perodua offered its DVVT engine, butPROTON has continued using its CAMPRO engine for all the cars for decades. In thisregard, we recommend considering partnering or joint venture with those reputableengine 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 asnot 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 thesound prove of the car is pretty poor especially on high speed driving. Throughout theyears, there is not much improvement in this area which can WOW the consumers. Infact, all these features will help to create driving experience. Interior design with Page | 39
  40. 40. aesthetic features and good sound protection will make a driver feels joy and excited thuscreating a strong positive driving experience.iii) Body frame The next consumer perception that PROTON should address is the structure of itsproducts in terms of solidity. Generally consumers think that its body frame is veryvulnerable, when they are driving the car at higher speed, they feel it is light and have asense of floating and unsafe. Although have been improved for model like Pesonna,Exora but that still achieved customer satisfaction level. To improve this area, againinvestment in R&D is almost important. We recommend PROTON to seriously study thechange of material. An alternative will be working with partners or joint venture withcompany specialized in frame manufacturing.iv) Exterior Design Exterior design is the key product attribute that plays an important role in enhancingthe 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 Page | 40
  41. 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.CONCLUSIONPROTON as the first Malaysian car manufacturer has established a very strong identification inthe Malaysia automotive market. However, the consumers perceived that it has not deliveredwhat is promised and expected. As a result, PROTON is unable to create positive response in thehead and heart of its consumers. PROTON still has tremendous potential and capacity to performbetter 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 andrecommendations 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 itsconsumer. This will eventually enhanced and strengthen it sources of brand equity in order tocompete ahead.Based on its recent performance, PROTON has indeed working very hard to live up its workingphilosophy of producing the right car at the right time, for the right market, at the right price. Page | 41
  42. 42. REFERENCE1. PROTON’s Annual Report 2009.2. Kotler, P. and Keller, K.L. (2009). Marketing Management (pp 53, 77-84) New Jersey: Pearson Prentice Hall3. PROTON’s official homepage. ( & ( 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 Problem6. 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 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 . Page | 42
  43. 43. Page | 43