Marketing: Assessment, Objectives, and Plan for Perusahaan Otomobil Kedua Sdn Bhd

In this document we will discuss about Marketing and below are the summary points of this document:- Introduction: Overview of Perusahaan Otomobil Kedua Sdn Bhd, its establishment, and major shareholders. Task 1: Assessment of the current market position, including product portfolio matrix, market analysis, and SWOT analysis. Task 2: Marketing objectives, such as product development, market penetration, market development, and diversification.

Running head: MARKETING
Marketing
Student’s Name
University Name
Author’s Note

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Table of Contents
1. Introduction............................................................................................................................3
2. Task 1: Assessment of the current market position...............................................................4
2.1 Product Portfolio Matrix...................................................................................................7
2.2 Market analysis.................................................................................................................8
2.3 SWOT Analysis................................................................................................................9
2.3.1 Strengths....................................................................................................................9
2.3.2 Weaknesses..............................................................................................................10
2.3.3 Threats.....................................................................................................................10
2.3.4 Opportunities...........................................................................................................11
3. Task2: Marketing Objectives...............................................................................................11
3.1 Product Development.....................................................................................................11
3.1.1 Implementation of Uppsala Internationalisation Strategy...............................................12
3.2 Market Penetration.........................................................................................................13
3.3 Market Development......................................................................................................14
3.4 Diversification................................................................................................................14
4. Task 3: Marketing Plan........................................................................................................15
5. Marketing Communication Channels..................................................................................16
5.1 Offline Marketing Strategies..........................................................................................16
5.2 Online Communication Strategies..................................................................................16
6. Conclusion............................................................................................................................17

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7. Task 5: Gantt chart...............................................................................................................18
Reference List..........................................................................................................................20

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1. Introduction
Perusahaan Otomobil Kedua Sdn Bhd, an automobile manufacturing and sales
company headquartered in Malaysia had been established in the year 1993. The major
shareholders in the organisation are UMW Corporation Sdn Bhd with 38% share, MBM
Resources Bhd and Daihatsu Motor Co. Ltd with 20% share and others like PNB equity and
so on. Immediately after the commencement of the production line in Malaysia the company
came up with a hot product named the Perodua Kancil in the year 1994. The product was an
instant hit because with this car, the organisation attempted to catch a new market comprising
of the middle class. The product was a basically a budget friendly mini car that was well
within the reach of the Malaysian middle class. Following the introduction of the Perodua
Kancil in 1994, another SUV model was launched, named RUSA consecutively. The success
of this model of the car enticed the company to instantly the product line. As such, the
organisation came in to direct confrontation with the giant monopolist Proton, in the
Malaysian market.
The immense success in the internal market of Malaysia enticed them to export their
products and the first international market entry was in Indonesia. This followed by market
entries in the economies like Brunei, Nepal, and Sri Lanka, Mauritius and so on. However the
market entry in to the international market could not provide sustainability to the
organisation, as analysed in the report, owing to the following factors.
 Limitations of raw materials
 Increased labour costs owing to shifting of the production line
 Higher transportation costs
It became difficult for the company to manufacture the budget friendly cars and the other
popular models at competitive prices, while operating in the new economies. However,

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considering the nature of the demographic market had occupied already, it became difficult
for them to dramatically enhance the prices of their budget friendly cars. They had projected
them as a company that is excrete in the production of budget cars, and as an impact, they had
instantly received such a market exposure that helped them to expand in the new economies.
Now, it was necessary that a new business model be adopted by the company so that
they could sustain their current international presence in the various countries of South East
Asia. As Balon, Sharma and Barua (2016), suggests, in such a state of doldrums on the brink
of market operations, it is most suitable to select the market entry strategy of Foreign Direct
Investment. As an outcome, the organisation would receive the patronage of the local as well
as national government of the nation where they are operating. As an outcome of that, they
would be receiving access to the raw materials as easily as the local companies, cheap labour
with appropriate marketing skills, as well as bigger sales exposure (Harwit 2016). In this
report, the Indian market have been considered for the feasible market entry channel for the
organisation. The market volume of the country is large and form the Indian market, entry to
the surrounding markets like China, Bangladesh, and Myanmar and so on would be very
easy.
2. Task 1: Assessment of the current market position
Current, the market occupancy rate of the company in the Malaysian market is 40%.
As such the company is still in the leading position with a difference of 25% in the market
acquisition rate from its nearest competitors in the local domain. This implies that the
company is gradually heading towards a state of stagnancy in the local market and further
chances of increasing the revenue share by operating in the home market would be very
difficult for the organisation (Nayak and Bargal 2018). There is virtually no existing chance
of elevating their scale of revenue in the local market. Honda and Toyota, which are the two

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major competitors of the comp any in the Malaysian market are way behind the company at
25% market occupancy rate, each.
Figure 1: Overview of Automotive sales in the Malaysian Market
(Source: Luthra Garg and Haleem 2016)
As Kushwaha and Sharma (2016), states, it is evident that as the market occupancy
rate of the company in the Malaysian market is very high, there is an urgent need of exploring
the new markets that can help them in scanning up the revenue stream. The company has
entered the new countries so far with their existing business model that advocates licensed
partners who would be liable for the import of the cars of Perodua form Malaysia for sales in
the respective countries. However, as evidenced by Kale (2017), the cost of production in
Malaysia has increased considerably for the factors that are discussed above.
Analysing the market condition of the Asian countries, it can be discussed that the
growth potential for any new automobile manufacturing company is the highest in the Indian
market. That is why 3 to 4 new international car brands have opened up their sales units in
the Indian market. On top of that, all the major foreign car brand that are operating in India

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are responsible for the manufacturing and/or assembly of their car parts in the country itself.
In fact, as Sharmelly and Ray (2016), states, there is high possibility of doubling of the sales
of all the major automobile brands in the Indian circuit by the year 2025. It can be estimated
that the company would enter in to the market with their existing exporting strategy and start
market occupancy with 2400 cars at least as they did with Singapore and Bahrain.
2019 2021 2023 2025
2400
3600
4000
4800
sales per unit
sales per unit
Graph 1: Apprehended sales by 2025 in India
(Source: Ray and Miglani, 2016)
Graph 2: The increment in the rate of automobile sales in India

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(Source: Nowak 2016)
2.1 Product Portfolio Matrix
In the product portfolio or the BCG matrix for the current state of the operations of
the company in Malaysia, the four factors, namely the Dogs, Question marks, stars and the
cash cows have been considered. The stars for Perodua would be a high rate of growth in the
market where the market share is also high. This position have already been achieved by the
company in the Malaysian automobile market the growth opportunity was also high.
However, having occupied 40% of the market already, the company has now reached a state
of stagnation (Rehman et al. 2016). The state of operations of the company wold be in
position of cash cows in the other markets like Singapore, Brunei, Nepal, and Sri Lanka,
Mauritius and so on. The growth rate is low in these countries, but there are chances of
attaining high market share in these countries, since the rate of stagnancy in these economies
is absolutely low. There are no dogs for the company at present. Currently, the best position
that the company can be categorised in to, is the state of question marks. They are stepping in
to India where the chances of market acquisition is very high, but their market share is very
low as they are about to enter the country, only. So far the nature of the Indian market is
Oligopolistic. There are various brands of cars that are existing in the market but there are
certain number of brand with whom the majority of the share of market is lying (Gopal and
Thakkar 2016). As they are in a state of question marks, they can either grow substantially in
the market, or they will be submersed absolutely by the new car brands that are making a
market entry recently in India.

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Figure 2: Product Portfolio Matrix for Perodua
(Source: Developed by the researcher)
2.2 Market analysis
Perodua has launched various models of cars in the Malaysian market by means of
which they are targeting various social classes. For evidence, the ViVa 660cc was introduced
for people who need low performance and are economical in expenses. The middle class
people have been targeted by the Myvi 1000cc and so on. The range of price for the various
models of cars are quite different (Gupta and Vardhan 2016). Versatility in the price range
enables people of various social classes to purchase the cars of Perodua. In the Malaysian
market, the prices of cars have become competitive recently, because of which the sales
monopoly that the car brand had, over a certain group of buyers is gradually diminishing.
That is why the car brand has taken the decision of providing with car loans ranging from 3.5
High growth with high
market share High growth market with
low market share
Low growth with high
market share Low growth or market
share
Current state of existence
of Perodua in the Indian
Market

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to 4% and that also over a span of five to nine years. The customers need to pay only 100
Malaysian Ringgits as their instalments.
Although the sales locations of Perodua are variegated, most of their sales, services as
well as retail showrooms are located near the centres of urban population. As an evidence the
Perodua manufacturing as well as the engine as the engine manufacturing plan of the
company is located in Rawang and the sakes and the service centres of the company is
centered in Kuala Lumpur, Petaling Jaya, as well as Shah Alam and others. There are
multifarious sales channels also employed by the company like personal selling, advertising,
sales promotion and public relations. They have trained sales staff as well as promoters who
are liable to sell their products as well as provide product related information to the
individual based on their needs. In order to aggravate sales, the company provide a discount
of Malaysian Ringgits RM2000, free gifts like sterling locks, touch & go cards and so on.
They also have a feature of offering extended warranty program for the benefit of the
customers.
2.3 SWOT Analysis
2.3.1 Strengths
The first aspect of strength of the company is their product portfolio. In few years
only, the company have been able to create mentionable presence in various car models like
Bezza, Alza, and other sedans, hatchbacks like Axia and the Myvi. Their focus on the small
cars has increased their USP. Through the manufacturing and the servicing of the small cars
they have been able to gather high customer goodwill. Currently, Perodua is the market
leader in the sales of small cars in the Malaysian market. Another important strength of the
company is their business tie ups with the Japanese companies like Daihatsu and Mitsui (Jain,

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Aguilera and Jamali 2017). The adaptation of the Japanese manufacturing ethics has helped
the company to develop discipline and efficiency with their existing product line.
The system of workplace organisation of Perodua is another aspect of their strength.
They follow the 5 S system. As opined by Kumar and Rahman (2016), this system ensures
that the employees are happy in their service tenure and there is high organisational harmony.
There is constant culture of participating from the bottom to the highest level of management
in the organisation.
The investment in the development of cars of alternative energy like hybrid cars,
hydro cell powered cars as well as electric cars have given them a strong impetus in the
automobile market of Malaysia (Jain et al. 2018).
2.3.2 Weaknesses
One of the most important weaknesses of the company in the ‘market is that they have
good customer reach in the Malaysian market as well as parts of Japan and some parts of
South East Asia. However they do not have deep delved market presence in many of the
important South Asian markets.
The recent axle failure of some of the cars of a particular model of Perodua has
caused the company to gather some potential negative publicity in the social media. The
Myvi as well as Alza models have accursedly undergone poor quality checks. Again another
weakness of the company is that they are excessively dependent on their Japanese
counterparts for manufacturing related support that affects their independence dramatically.
2.3.3 Threats
One of the biggest threats for the company is competition. In the Asian car market,
there is high level of competition, Honda and Nissan being the major rivals for the company.

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Another threats for Perodua is the depreciation in the currency value (Jamali and Jain 2017).
The depreciation in the valuation of the Malaysian Ringgit will affect the business of the
company since Perodua imports in the currencies like Dollar and Yen. In future, they might
need to diminish the costs of product vehemently in order to compete with force against the
rate of havoc depreciation.
2.3.4 Opportunities
The market potential of the company is huge. They are the market leader in smaller
cars in Malaysia and the cars in the same segment have gained ample popularity in countries
like India where there is a large demographic base of customers who financially equipped to
purchase cars from their range of small cars.
Many of the newly emerging economies like India are giving enhanced focus on
connection of their cities through road ways like high ways as well as super highways
(Rehman, Aneyrao and Shrivastava 2015). This would call in demand of the cars like sedans
and the SUVs that is adaptable for heavy journey along high ways.
The change of the current trends in the automotive industry also provides an
opportunity for the company. The increase of dual income households in countries of South
East Asia, higher rate of urban population as well as others are having a high impact on the
sale of cars in the countries like India as estimated above in this report also (Nakamichi,
Hanaoka and Kawahara, 2016).
3. Task2: Marketing Objectives
3.1 Product Development
The product development strategy for Perodua in the Indian market is simple.
However, there is high need for diversification of the product line. Initially, the company

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have to enter the Indian market with the basic line of low economy cars like Viva, Myvi and
Axia. These cars can be easily priced under INR Rs. 3 lakhs. As such, the great pool of
middle class families that are showing acute interest in buying small family cars can be
greatly benefitted. Again, the cars can also be utilised for the purpose commercial cabs also.
In the future, when their market promotional strategy have been affixed, and the brand
awareness of the cars of Perodua have been developed, they can step in to manufacturing of
the cars along with other bigger versions like SUVs or Sedan models. It is noteworthy that
51% of the consumer cars market of the Indian automotive industry have been comprised of
smaller cars. Many of the cars that have attempted to enter the segment of bigger cars like
Renault, have failed due to the fact that majority of the automobile brands have adopted a
wrong promotional strategy. MPV and sports utility vehicles are redundant in the Indian
markets, absolutely.
3.1.1 Implementation of Uppsala Internationalisation Strategy
In the context of the market entry strategy of Perodua, the Uppsala International
Marketing model is highly recommendable. The first two steps of the marketing model is
already followed by the organisation. The organisation is not involved in any regular export
activities. They are reliant on the batch based exports that takes place bi-annually or semi-
annually. Besides, as per Niedomysl, Prowse and Lund Hansen (2018), the second step of the
model states that there should be an independent export representative in the foreign domain
for the country. The same strategy have been followed by the company during the course of
their exponential market acquisitions. However, since they are going to adopt the strategy of
FDI for market expansion in India, the last step of the model that is setting up foreign
production units will be the most feasible suture sustenance strategy for the company. Hence,
in alignment to the marketing activities and opportunities of the company, it is suggestible
that the Uppsala model of international marketing and management should be followed be

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followed by the company in order to gain a consolidated market standing in the automobile
market of India.
The Uppsala Framework
(Source: Niedomysl, Prowse and Lund Hansen 2018)
3.2 Market Penetration
The market penetration strategy of the company is not suited for the market entry in
India. The cost of labour in the Indian market along with provisions for small car
manufacturing is very high. The government of India is also friendly to FDI and they are
ready to provide new lands for companies interested to make FDI, especially in the
automobile sector of the country. Other than the home frown brands in the country like Tata
and Mahindra, there are not many major players in the Indian market (Mustafa et al. 2018).
That is why the rate of stagnation in the country is very low. Initially, the company should
make the market entry with their own export strategy of importing cars with franchise

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partners. However, after 6 to 10 months of operation, the company have to settle lands for
setting up own production and assembly units in the country. Initially, the company should
enter the Indian market with only 1000 to 12000 cars on direct import. In this case, they can
follow the model of Toyota who entered the Indian market with direct import strategy in
collaboration with Kirloskar (Desai and Rawani 2017). There are very less operators in the
market of small hatchback cars in India and there is high need of such cars in India recently.
This is because majority of the hatchback cars are needed for the cab service companies in
India like Ola, Uber, Meru Cabs, Go Cabs, ZustGo and so on.
3.3 Market Development
Most of the automotive market players in the Indian domain, have limited focus on
the integrated system of product manufacturing. Main car segments like engine, transmission,
as well as other electronic parts are still imported by major brands. Standing in that place,
Perodua have to develop an integrated manufacturing unit where all parts including the entire
model would be manufactured in India (Gopal and Thakkar 2016).
There is a strong base of Indian engineers as well as mechanics who can be employed
at a much lower salary than in Malaysia. The rate of corporate tax in the country would be
lower for FDI also. Analysing the marketing domain of business management in India, other
strategies that can be suggested for Perdue are:
 Ensuring that the company has tie ups with the local businesses so that micro
promotion in the rural and the semi urban areas can be done.
 Giving heavy discounts as well as assured gifts and free servicing and insurance can
help in attracting the customers.
3.4 Diversification

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The company have to make sure that the cars are utilised for personal as well as
commercial use in India. The promotional strategies have to be ascertained in such a way that
market sales of commercial vehicles is also impacted by the market entry of Perodua.
However, there is a risk in entering the market with small cars. If they develop the identity as
a small car manufacturer, they would be identified as a flagship brand only (Vivek and
Ravanan 2016). The brand preference of the company would be reduced at the advent of the
market entry of the company.
4. Task 3: Marketing Plan
In the marketing plan, the target market of the company have to ascertain at first. In
order to do so, the basic demands of the automobile industry have to be determined. The
market demand in India is very versatile. There are ample customers for the branded luxury
cars in the market. Again, as Taneja and Dayal (2016), states, there is ample need for the
heavy duty commercial cars and lastly, there is maximum demand for the small passenger
cars that can be used for the commercial as well as personal use. Since the company is
launching in the last domain of the industry, they stand an ample chance of dominating the
market from the initial days.
Major competition in the Indian market would be faced by the company from the
TATA motors who have an annual projected revenue of about USD $28 billion annually. In
the segment of heavy duty commercial vehicles, they are occupying the initial position also.
The TATA Motors occupy 31.2% of the market share in domain of multi-utility vehicles and
in the luxury brands, 6.4% share (Uppal and Kesari 2016). Hence, the main competition is to
be faced from this company only. Again, Maruti Suzuki would also provide competition in
India. This company have the highest level of brand loyalty among the middle class
consumers. Hyundai and Hero MotoCorp are other competitors of the company in India.

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The budget for the initial market entry and operations also needs to be ascertained.
Again, the metrics for analysis of the business performance has to be ascertained also. For
this the cash flow of the company in India in the initial two years after market entry have to
be analysed in detail. The hike percentage in the sales revenue generation during initial two
years have to be kept in check also.
5. Marketing Communication Channels
5.1 Offline Marketing Strategies
The first among the most important offline communication strategies is guerrilla
marketing. In India, the rate of exposure of the target market towards the modes of traditional
marketing techniques is very segregated. This is why guerrilla marketing techniques is very
important. In order to steal the attention of the audience, they can display their advertisements
in movie theatres before the start of the movies, post hoardings in the shopping centres, and
give away a Perodua car as prizes of lucky draw in shopping complexes and convenience
stores, park advertisement hoardings in the beaches, public vehicles and so on.
The second strategy is hoisting of grand launch events. They can hoist some
ceremonial event dedicated to launch of their car models in the Indian market. This will
attract the attention of the corporate franchise dealers and in that way they can get easy
distributorship. Another important offline marketing strategy is direct networking. In order to
develop a broad network, the company can set up communication with all respective friends,
employees, and business partner organisations and so on.
Assessing the consumer purchase trend database, they can send direct mail to
enthusiastic buyers also. The strategy is publishing of industry magazines, journals as well as
papers. This is a better way of publicising the features of the cars directly to the customers.

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5.2 Online Communication Strategies
Online marketing is the latest trend that many of the new market entrants in various
domains have used for the purpose of high end publicity. While conducting lead generation,
the marketers of the company gets access to the phone numbers as well as email addresses of
the potential buyers. In order to develop brand awareness, the company can send promotional
messages through email directly to them. This is a very effective strategy, which Gopal and
Thakkar (2016), advocates. The company can get minimum 30 to 40% return on investment
by means of using this strategy.
Another eminent strategy is the pay per click advertising. Advertising channels like
this can help the company to reach a high traffic of potential consumers of consumers in a
matter of very short time. However, the initial investment in terms of bidding as well as
placing the ads is high. However, the company can still have their marketing budget well
within their control, as they can set limits to spend per day, per week or even per month when
they are using this software. Two other eminent online marketing strategies are Search
Engine Optimisation as well as display advertising. SEO is probably the most feasible
strategy of enticing the customers who uses internet on a regular basis. 93% of the big
purchases of the customers in India start form using the search engine to search for products
related to their need. As such this strategy can turn out to be a very impactful strategy. Again,
many customers like visiting blogs, forums, as well as other websites that contains matter of
their commercial interests. This group involves customers, as well as dealers and distributors.
Most feasible display marketing modes include banners, pop up boxes, interstitial ads,
overlays, video ads and so on.
6. Conclusion

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The Perodua Company has adopted an initial strategy of direct export for off shore
strategizing. However, this strategy could not help the company in achieving market
domination. This is mainly because of the fact that the company could not handle the pressure
of the operations owing to higher operational costs. Analysing the BCG matrix of the
company, it has been confirmed that the market entry should be aligned to the open markets
that has low saturation level and high growth opportunities (Sarwade 2015). Other than few
indigenous brands, there are very less competition in the market in India.
7. Task 5: Gantt chart
Market
entry
strategies
Month 1 to
2
Month 2 to
4
Month 4 to
6
Month 6 to
8
Month 8 to
10
Analysis of
the target
market
Selection of
the initial
market
entry
strategy
Development
of assembly
line and
production
units

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Development
of sales and
distribution
units
Sales and
Promotion
Budget
development

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