BBPM2203PolycarpDanson

BBPM2203MARKETING MANAGEMENT II

ASSIGNMENT

PROTON

POLYCARP DANSON AK SIGAI750705135101001

[email protected]

TUTORMR. KERON MAPUS

PUSAT WILAYAH SARAWAKSEPTEMBER 2009

BBPM 2203 - MARKETING MANAGEMENT IIPOLYCARP DANSON AK SIGAI

750705135101001

Table of Contents

Introduction………………………….…………..……………………………… 2

1.0 The Concept of Marketing……………………………………………………. 3

2.0 The Main Objectives of Proton………………………………………………. 4

3.0 Marketing Objectives of Proton……………………………………………… 4

3.1 Positioning…….………………………………………………………. 5

3.2 Strategies………………………………………………………………. 7

3.3 Proton Differentiates…………………………………………………. 8

3.4 Success and Failure Analysis………………………………………. 8

3.5 Marketing Mix..………………………………………………………… 10

3.5.1 Product..……………………………………………………… 10

3.5.2 Product Development……………………………………… 11

3.5.3 Product Refreshment………………………………………. 12

3.5.3 Price…………………………………………………………… 13

3.5.4 Promotion.…………………………………………………… 14

3.6 Critical Issues/Challenges………………………………………….. 15

Conclusion………………………………………………………………………………….. 16

References……………………………………………………………………. 17

POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 1


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INTRODUCTION

Proton was established in 1983 under the direction of the former Prime

Minister, Tun Dr. Mahathir Mohamad. Proton Holdings Berhad, the holding company

of Proton, is listed on the Bursa Malaysia. Proton principal activities are the

manufacture, assembly, trade and provision of engineering and other services in

respect of motor vehicles and related products. Operations are carried out in

Malaysia. Based on technology and parts from Mitsubishi Motors, production of the

first model, the Proton Saga began in September 1985 at its first manufacturing plant

in Shah Alam, Selangor. Initially the components of the car were entirely

manufactured by Mitsubishi but slowly local parts were being used as technologies

were transferred and skills were gained. The company has 140 sales outlets and 37

services branches and 113 services outlets across Malaysia.

Proton vision is to become Asia’s premier automotive brand; a brand that

connects with people and provides products which become life companions. Proton

has a unique ability to understand people’s needs and provide the right product with

efficient service and genuine quality. They build cars with care for passenger safety

and genuine quality in order to provide high durability and lifelong companionship.

Proton product are Proton Saga (1985), Proton Juara (2001), Proton Iswara

(1992) Proton Waja (2001), Proton Wira (1993), Arena (2002), Proton Satria GTi

(1994), Gen-2 (2004), Proton Putra (1995), Proton Savvy (2005), Proton Tiara

(1996), Perdana V6 (1998), Proton Persona (2007), Proton BLM (2007) and Proton

Exora (2009).



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1. The Concept of Marketing

Marketing is the process of planning and executing the conception, Pricing,

promotion, and distribution of ideas, goods and services to create exchanges that

satisfy individual and organizational objectives. This definition stresses the

importance of beneficial exchanges that satisfy objectives of both those who buy and

those who sell goods and services.

The purpose and objective of marketing are,

I. Marketing seeks, to assess the needs and wants of prospective customer

II. To satisfy them.

The key to achieving the two objectives is the idea of exchange or the trading of

things of value between buyer and seller. Strong customer-orientation and

competitively-priced products are the foundation of protons business and are

essential to the company’s success.



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2. The Main Objectives of Proton

Proton is Malaysia’s national car manufacturing company, while Proton Edar

being the sole marketing arm and distributor. As both the manufacturer as well as

the distribution arm of Proton cars, the quality production and quality deliveries of

proton cars to the customer may be affected when the quantitative sales target is

mixed with qualitative deliveries. Proton wants numbers and customer wants better

improved cars.

3. Marketing objectives of Proton

Proton target market is to meet the satisfaction level of target market. Current

promotions efforts to sell Proton products are :

Current Mission of Proton: To strive towards excellence in all aspects of our

operations.

Our Proposed Mission statement for Proton: Quality and luxury cars at an

affordable price

Current vision: Being customer’s no 1 choice in automobile product and

services



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3.1 POSITIONING.

Positioning helps us to establish our products or services identity within the

eyes of the customer. A company's positioning strategy is affected by a number of

variables related to customer's motivations and requirements, as well as by its

competitor’s actions. Positioning is how we differentiate our products or services

from our competitors and then determine which market niche to fill.

As for Proton, they aims to maintain market leadership by continuing to

develop innovative products and through satisfying its customers in a more profitable

way than its competitors. Customer satisfaction is a key element where various

initiatives are being or will be rolled out to make the experience of owning a proton

car. Strong customer-orientation and competitively-priced products are the

foundation of protons business and are essential to the company’s success.

Until the end of the 1990s, the Proton car's logo featured the crest from

Malaysia's coat of arms, featuring a crescent and a fourteen-pointed star. The new

Proton logo features a stylized tiger head. In 1993, a model called Proton Wira was

introduced based on the Mitsubishi Lancer/Colt. More than 220,000 units were sold

between 1996 and 1998. Proton Perdana, based on the Mitsubishi Galant/Eterna,

was first produced in 1995, intended for higher end market. The Proton Waja (Proton

Impian in UK), which launched early 2001, is the first car model designed internally

by Proton.



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By 2002 Proton car sale was almost of over 60% in Malaysia, which was

reduced by 2005 and in 2008 when AFTA mandates reduce import tariffs to a

maximum of 5%. But, Proton has gained an additional source of engineering and

automotive expertise. This led to the production of Proton Gen-2 which was code

name Wira Replacement Model (WRM) before the launch. The Gen-2 is the first of

cars to be manufactured and assembled at the new manufacturing plant in Tanjung

Malim, Perak which is part of Proton City development project. The plant was

opened in 2004.

In 2005 Proton introduced the second model to be manufactured in Tanjung

Malim, the 1,200 cc 5-door supermini, the Proton Savvy. Both the Gen-2 and Savvy,

were models that MG Rover was looking to rebadged when the British firm entered

into collaboration talks with Proton. However these joint-venture talks were

unsuccessful and MG Rover subsequently collapsed.

Later, in 2007, Proton launches its new sedan as replacement version for

Wira Sedan but with new name, Persona. The new Proton Saga replacement model

(codename Proton BLM) was launched on 18 January 2008. The new Saga is based

on the Savvy platform, but using Campro 1.3L instead of Renault engine. It was

announced on August 8, 2008 that Proton is developing a new, fuel-efficient hybrid

car to beat rising costs and address environmental concerns. As of 3 August 2008,

Proton has produced 3 million cars since 1985, where the 3 millionth cars is a

second-generation Saga.



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Proton, has successfully positioned themselves as the family value model.

The Proton cars brand has been sold over not only in Malaysia but internationally.

Proton has been re-positioned as a vehicle which had negative brand associations,

to one which regularly wins car of the year awards. The positive comments from the

industry and attributes of this vehicle is has changed the perception of consumers

about the Proton brand.

3.2 STRATEGIES.

Developing a positioning strategy depends much on how competitors position

themselves. The pricing strategy must reflect the benefit offered and the promotion

strategy must communicate this benefit. It’s offering a benefit which is superior

depends much on the marketing mix strategy the organisation adopts. Proton

commands a substantial share of the domestic market for passenger cars and over

the years has been building up distribution networks in key market centers across

the four regions:

• South-East Asia

• Middle East

• United Kingdom / Western Europe

• Australasia

The main business activities of the Proton then encompass vehicle

engineering, research & development, manufacturing, distribution and after-sales

services. Proton is also involved in financial services and property management in



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supporting the main business activities. Proton designs and produces cars for

diverse consumer preferences.

3.3 PROTON DIFFERENTIATES.

Differentiates, is the act of designing a set of meaningful differences to

distinguish the company's offering from competitor's offerings.

Proton cars proved popular among budget-oriented motorists, and like

Japanese and South Korean models before them, led to the demise of

manufacturers, Proton concepts are to ensure that they meet smart personality

needs in terms of design, power and size for different age groups, so Proton can be

the right companion for life. It is an integral part of their business and their brand,

without which, Proton would not have either share of market or share of heart. 1985

marked a momentous year in Malaysia’s history – it was the year in which the

country’s first national car was born. Today, Proton has emerged as the only full-

fledged car manufacturer in the country.

3.4 SUCCESS AND FAILURE ANALYSIS

Malaysia has become a hotbed of production activity in recent years thanks to

a raft of new assembly licenses granted to international manufacturers. According to

Mahaleel Ariff, chief executive of state owned Proton, Malaysia’s output capacity has

now reached 700,000 units, of which his company and fellow national Perodua

account for 500,000 units. However, production fell from 563,408 units in 2005 to



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503,048 units in 2006. The competitive position of state-owned carmakers Proton

and Perodua has remained a key focus for the Malaysian automobile industry in

recent years, with the two firms combined market share declining. Proton has been

particularly hard hit. A bloated workforce and a lack of new models have not helped

the firm, with the double-edged sword of long-standing government protection

militating against efficiency. In 2006, the company lost leadership of the market for

the first time, falling behind Perodua.

After that, leadership of the passenger market shifted for the first time ever

from national manufacturer Proton to local rival Perodua in 2006, as the domestic

giant’s sales fell by 30%, to 115,538 units or 32% of the market. Perodua, on the

other hand, increased its sales by 14%, to 152,733 units, boosting its market share

from 32% in 2005, to 42%. The overseas brands saw their combined share of the

passenger market fall slightly from 23% in 2005 to 22% in 2006. In terms of total

sales for all segments, Perodua again made its mark, claiming 32% of the market

from sales of 155,419 units, while Proton trailed with 24% from sales of 115,706

units. Toyota’s share of the total market is double that of its passenger car share with

16.7% with Honda pipped for fourth place by local firm Naza on 6.5%, against the

Japanese brand’s 5.4%.

The competitive environment category measures the opportunity for new

market entrants, based on existing manufacturers and brands in the country. Despite

increasing numbers of carmakers launching production activities in Malaysia, some

major manufacturers are still absent leaving opportunity for extra competition. The

market scores 5 out of 10. Another that, competitor is Toyota Motor Corporation;



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Honda Motor Company Ltd.; Shenyang Brilliance Automotive Company Ltd.;

Mitsubishi Motors Corporation; Yuejin Motor Group Corporation; Hyundai Motor

Company Ltd.; Mazda Motor Corporation; Daewoo-FSO Motor S.A.; Isuzu Motors

Ltd.; Kia Motors Corporation and Toyota Astra Motor PT.

Finally that, Perodua’s successful tie-up with Japanese manufacturers, as well

as an emphasis on small, fuel-efficient vehicles, allowed it to overtake Proton in

passenger-car sales in 2006. It outsold Proton in the domestic market both in 2006

and 2007. However, its subcompacts do not directly compete with larger, more

expensive Proton offerings. The company has 140 sales outlets and 37 service

branches and 113 service outlets across Malaysia.

3.5 MARKETING MIX

3.5.1 Product

The importance of ensuring Proton we have a strong product portfolio is all

the more crucial as it has a pivotal impact on their turnaround plans. This is

reinforced by their winning strategy of introducing ‘the right car, for the right market,

at the right price and at the right time’. This strategy was reflected in Proton newly

introduced Persona and Saga models, with the latter powered by the new CamPro

IAFM engine during the year under review and suffice to note. These two models are

performing tremendously well in the market to date.



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Furthermore, Proton has continued to update and refresh their existing

product lines to entice and attract customers. The re-energised Waja and Gen.2,

with their new look and powerful CamPro CPS engine, and the economical Savvy re-

designed to give better value proposition to the buyers of the Savvy Lite, have

successfully managed to excite car consumers in Malaysia during the year under

review. Staying on course, Proton, will has launching their first MPV in early 2009,

further solidifying their product line-up to include a high quality multi-purpose vehicle

that can cater to the family-oriented contemporary lifestyle.

Other exciting offerings are also in the pipeline with replacements for the Waja

and iconic Perdana on the drawing board. To sustain this positive momentum,

Proton has continued their research and development (R&D) efforts and

comprehensive market surveys to gain a deeper understanding of the needs of their

customer base. By harnessing the right technology and keeping their finger on the

pulse of customers’ requirements, Proton truly believe that this will bring us closer to

achieving their goals of a dynamic product portfolio.

3.5.2 Product Development

Proton models includes the reliable family-sedan Waja, the stylish Gen.2, the

elegant Perdana V6, the versatile Arena, the proven Saga range, the fun-to-drive

Savvy, the desirable sporty Satria Neo and the ‘2008 Best Model of the Year’ winner,

the Persona. Proton also has in its portfolio, the world-renowned Lotus sports cars,

with models such as Elise, Esprit, Exige, Europa and the recently unveiled Exora,

which was launched in 2009, to suit a range of customer demands and preferences.



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Proton conducts research in its center in Malaysia and the United Kingdom on new

technologies to create cars that are unique in both design and driving performance.

Through Lotus, the Group provides comprehensive and versatile consultancy

services to many of the world’s OEMs and Tier 1 suppliers.

Currently, the proton has almost 12,000 employees who are involved in the

whole value chain of the business, from research, design, development, testing,

stamping, casting, machining and assembly to marketing, distribution and after-sales

services. Strong customer orientation and competitively priced products are the

foundation of their business and essential to their success. They aim to maintain

market leadership by continuing to develop innovative products and satisfy their

customer’s needs better and enhance profitability.

With robust product planning, they were able to introduce both new and

improved Proton cars in the year under review, marked by the successful launch of

the Persona in August 2007, followed closely by the unveiling of the new Saga in

January 2008 and their first MPV, Exora in 2009.

3.5.3 Product Refreshments

Gen.2

The face-lift of Gen.2 was done in tandem with the initiation of the Persona

project to take advantage of cost sharing given that both projects share similarities in

terms of their interior design. As a result of the exterior face-lift, the Gen.2 now

features a new bumper, body kit, colour and alloy rims. Proton also upgraded parts



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of the exterior and interior of the car based on customer’s feedback while introducing

the much-anticipated CamPro CPS powertrain. The engine’s Variable Intake

Manifold (VIM) switch alternates between a long intake manifold at low engine

speeds and a short intake manifold at higher engine speeds. Proton is applying a

longer intake manifold to achieve slower air flow, as this system has been found to

promote better mixing of fuel. The short intake manifold will allow more air to enter

faster and be especially beneficial to engines at high Revolutions Per Minute

(RPMs). With extra power, better handling and improved quality, the refreshed Gen.2

is set to become a highly competitive model in the sporty C-segment automotive

category.

3.5.4 Price

Now-a-days people more concern about money. The prices of the Proton cars

are still the lowest price among the imported cars. Current price is approximately

Rm25k-125k depending on the models. Proton is readjust the pricing for specific

models and make more flexible installment planning to encourage customer to

Proton cars.

Proton car prices, SATRIA 1.3GLi SE (Metallic) RM42,888.12. WIRA 1.5GL

(Metallic) RM47,320.00. WIRA 1.5GLi SE Aeroback (Metallic) RM50,027.97. WAJA

1.6L SOCH (Manual) RM59,455.60. GEN-2 1.6 DOCH Auto (Metallic) RM58,114.50.

PERDANA V6 2.0(A) RM106,096.94. ISWARA Aeroback 1.3S-LMST (Metallic)

RM38,500.81.



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Interest Rate is 3.88% for 7 years and 3.99% for 9 years. 2 years standard

manufacturing warranty plus 3 years Extended Warranty. Interest Rate is 3.88% for

7 years and 3.99% for 9 years.

3.5.5 Promotion

The year under review saw Proton aggressively augmenting the International

Sales & Services Division with additional human resources, focusing primarily on

technical support as well as after-sales and customer services. Clearly, this

investment reflects the importance of the export market in Proton’s long-term growth.

In terms of market expansion, the Proton successfully penetrated into China and

Thailand, while expanding their reach in Iran, the Middle East and Indonesia.

At the same time, Proton re-energised the Saudi Arabian market, which is crucial to

their success in the Middle East. The year also saw the implementation of a special

programmed for semi knocked-down (SKD) and completely knocked-down (CKD)

exports to Iran and China, which are expected to contribute positively towards the

new financial year’s export volume growth Proton’s technical support and after-sales

service capabilities must be of high standards in order to further enhance Proton’s

brand equity in the international market. Towards this end, several ‘Service

Campaigns’ were held during the year under review in our key export markets. Also

known as PROTON STAR, these campaigns included customer-focused initiatives

ranging from a 43-point check to discounts for spare parts. Naturally, these

campaigns are ideal platforms to bring Proton closer to the international customer

base. During the year, there was also a marked increase in the frequency of visits by

both the sales and technical teams to the various countries in which Proton has



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presence, to enhance their understanding of the markets and provide better

response to the customers.

3.6 CRITICAL ISSUES/ CHALLENGES

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. A tie-up with a strong foreign brand will enable

Proton to penetrate more discerning markets. But how many foreign stakeholders

would be willing to invest the money in Proton to develop new infrastructure and

facilities and share their latest technology without being given a substantial or

controlling stake in the car maker? That is a matter for the Government to ponder on

when the time comes.

Proton is a government subsidized company, Malaysia’s Pride. It is expected

to generate great revenue for the government but it’s unable to make this

achievement due to low quality management of their automobiles. Proton rising

inflation and high crude prices won’t hurt car sales because most of the models have

1.6-liter or smaller engines. Therefore I suggest that Proton to improve the quality,

provide all the necessary facilities and equipment for the employee, Actively

participate in all the Environmental, Health and Safety (EHS) programmers, Perform

Q.C tests and Position the Product in the appropriate Market segment by crating

Brand Image. It has a much potential high market in both domestic and

internationally, Proton just needs to know who its customers, what they want are and

put maximum efforts to satisfy those needs by learning from past mistakes.



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Therefore, Proton should position their products in the appropriate target

market with a new marketing mix, in other words if they target comparatively average

income consumers and make it a affordable product-then they must design and

provide facilities needed by that group of consumers and reaching the product to

them efficiently.

7. CONLUSION

Today, Proton has emerged as the only full-fledged car manufacturer in the

country. Proton’s current lineup includes the Saga, Iswara, Wira, Satria, Perdana,

Putra, Satria GTi, Juara, Waja, Arena (Jumbuck), Gen.2, Savvy, Satria Neo,

Persona and Proton very latest, the Exora. Proton not only commands a substantial

share of the domestic market for passenger cars, but over the years we have also

been building distribution networks in key market center across the four regions of

South East Asia, the Middle East, United Kingdom/Western Europe and Australia,

where Proton has become a hit with many car buyers. The imperative factor for

success lies in the people and the products. Proton employs a brand philosophy that

spells out Companionship. Proton’s core values of Companionship are in the areas

of placing customers first, even before profits. Customer satisfaction and lifelong

relationships stay at the heart of our organisation.



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REFERENCES

Philip Kotler, Gary Armstrong, p.2005, “Principles of Marketing”, 11th edition,

Pearson Prentice Hall, New Jersey.

Rain Stockton, Proton's Shares Increase as Its Deal with Volkswagen near

Conclusion, 26-07-2007, [online], available: http://www.articlesbase.com/automotive-

articles/protons-shares-increase-as-its-deal-with-volkswagen-near-conclusion-

188723.html

Robin Brant, Malaysia firm's 'Muslim car' plan, BBC News, 11 November 2007,

[online], available: http://news.bbc.co.uk/1/hi/world/asia-pacific/7089707.stm

Proton dealer does well in Kuwait, eyes Iraqi mart, DAILY EXPRESS NEWS, 01st

December, 2003, [online], available: http://www.dailyexpress.com.my/news.cfm?

NewsID=23260

ANNUAL REPORT PROTON 2008

http://www.proton.com/public/media/mediacentre/documents/annualreports/

AReport_2008.pdf

Chapter 2- strategy marketing Carl McDaniel, ChAerles W.Lamb and F.Hair, Jr.

(2008). introduction to Marketing (9th edition).Thomos South-Western

Financial Statement 2008 annual report

http://www.proton.com/public/media/mediacentre/documents/annualreports/

AReport_2008_5.pdf

List of Proton car models.

http://en.wikipedia.org/wiki/List_of_Proton_car_models


http://www.proton.com/public/media/mediacentre/documents/annualreports/AReport_2008_5.pdf

http://www.proton.com/public/media/mediacentre/documents/annualreports/AReport_2008_5.pdf

http://www.proton.com/public/media/mediacentre/documents/annualreports/AReport_2008.pdf

http://www.proton.com/public/media/mediacentre/documents/annualreports/AReport_2008.pdf

http://www.dailyexpress.com.my/news.cfm?NewsID=23260

http://www.dailyexpress.com.my/news.cfm?NewsID=23260

http://news.bbc.co.uk/1/hi/world/asia-pacific/7089707.stm

http://www.articlesbase.com/automotive-articles/protons-shares-increase-as-its-deal-with-volkswagen-near-conclusion-188723.html



http://www.articlesbase.com/authors/rain-stockton/25821.htm

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