Marketing Management Report: PROTON's Strategies and Market Analysis

This report provides a detailed analysis of PROTON, a Malaysian car manufacturer, focusing on its marketing strategies and market position within the automotive industry. It includes an executive summary outlining business objectives, missions, key values, market goals, and guiding principles. The report offers a company description covering ownership, organization, location, facilities, daily operations, suppliers, and administrative systems. A thorough market analysis explores market segments, target market strategy, PEST analysis, competitors, and market size. The marketing strategy and implementation section covers strengths, weaknesses, opportunities, threats, and the marketing mix (product, price, promotion, and place). The report concludes with a discussion of PROTON's challenges and future prospects, drawing on references and appendices for supporting evidence.

ASSIGNMENT 1
SEMESTER
SUBJECT CODE :
SUBJECT TITLE : MARKETING MANAGEMENT
LEVEL : MASTER’S LEVEL
STUDENT’S NAME :
ID NO. :
PROGRAMME : MASTER OF BUSINESS ADMINISTRATION
LECTURER :
LEARNING CENTRE : CITY UNIVERSITY PETALING JAYA
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MARKING SCHEME RUBRIC.
Criteria Marks
Relevance
Directly relevant to the requirements of the assessment. /20
Knowledge
A substantial knowledge of relevant materials, showing a clear grasp of
themes, questions and issues therein.
/20
Analysis
Good analysis, clear and orderly. /20
Argument and Structure
Generally coherent and logically structured, using an appropriate mode of
argument and/or theoretical model(s).
/20
Critical Evaluation
May contain some distinctive or independent thinking; may being to formulate
an independent position in relation to theory and/or practice.
/10
Presentation
Well written, with standard spelling and grammar, in a readable style with
acceptable style with acceptable format.
/5
Reference to Literature
Critical appraisal of up-to-date and/or appropriate literature. Recognition of
different perspectives. Very good use of source material. Uses a range
of sources of sources.
/5
Total /100
I certify that the work presented in this report is, the best of my knowledge and belief,
original, except as acknowledged in the text, and that material has not been submitted, either
in the whole or in part, for degree at this or any other University. I acknowledged that I have
read and understood the University rules, requirements, procedures and policy.
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Table of Contents
1.0 INTRODUCTION......................................................................................................4
2.0 EXECUTIVE SUMMARY.........................................................................................5
2.1 Business Objectives....................................................................................................5
2.2 Missions......................................................................................................................5
2.3 Key Values of the Company.......................................................................................6
2.4 Market Goals...............................................................................................................6
2.5 Guiding Principle........................................................................................................6
3.0 COMPANY DESCRIPTION......................................................................................7
3.1 Ownership and Details................................................................................................7
3.2 Organization Chart............................................................................................................7
3.3 Location & facilities..........................................................................................................8
3.3.1 Location.........................................................................................................................8
3.3.2 Facilities.........................................................................................................................8
3.4 Daily Operation Producers................................................................................................8
3.4.1 Operations Review.........................................................................................................8
3.5 Suppliers & Management Control....................................................................................9
3.6 Administrative System & Future Service...................................................................9
4.0 MARKET ANALYSIS...............................................................................................9
4.1 Market Segments.......................................................................................................10
4.2 Target Market Strategy.............................................................................................10
4.3 Pest Analysis.............................................................................................................10
4.4 Main Competitors...........................................................................................................11
4.5 Market Size.....................................................................................................................11
5.0 MARKETING STRATEGY AND IMPLEMENTATION......................................11
5.1 Strengths....................................................................................................................12
5.2 Weaknesses...............................................................................................................12
5.3 Opportunities.............................................................................................................12
5.4 Threats.......................................................................................................................13
5.4.1 Threats of new entry and substitution...................................................................13
5.4.2 Evaluation- Measures of Effectiveness.................................................................13
5.5 Marketing Mix Strategy..................................................................................................14
5.5.1 Product.........................................................................................................................14
5.5.2 Price.............................................................................................................................15
5.5.3 Promotion.....................................................................................................................15
5.5.4 Place.............................................................................................................................15
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6.0 CONCLUSION.........................................................................................................16
REFERENCES......................................................................................................................16
1.0 INTRODUCTION
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PROTON or PERUSAHAAN OTOMOBIL NASIONAL BERHAD 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. As the first Malaysian car manufacturer PROTON has well-
known a very strong credentials in the Malaysia motorized market.
However, the customers seeming that it has not supplied what is
guaranteed and anticipated by them. As a result, PROTON is incapable to
create optimistic response in the head and heart of its customers. PROTON
still has wonderful prospective and capability to accomplish superior in
offering its customers products and services of highest quality.
The new concept of Proton Inspire 2.0 is hope that the enhanced and new
brand images and recommendations will be able to help PROTON establish
an optimistic response in the customers’ memory which will lead the
company to achieve its vision of becoming a Life Friend for its consumer.
Based on its recent performance, PROTON has indeed working very hard to
live up its working philosophy of making the right car at the right time, for
the right market, at the right price. Production in the automotive industry
in Malaysia can be considered the most important and strategic industry.
Industry deregulation and imports from Japan, Korea and China with strong
regional brands at affordable prices, car establishment, to enhance their
competitiveness. About 90 percent of cars sold in Malaysia as the
Malaysian automotive industry plays an important role in the development
of local production, the local producers that are made of protons and
Perodua. One of the major factors of market to grow significantly in the
automotive industry in Malaysia offered to help the auto industry is
technological developments in the production stages. the global crisis, the
rise in oil prices has also affected the sales of Malaysian automobiles.
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Increasing interest rates and rising oil prices also impacted vehicle sales in
Malaysia, caused sales of protons, as shown, to reduce consumers'
purchasing decisions, and definitely affect the sales volume.
2.0 EXECUTIVE SUMMARY
2.1 Business Objectives
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 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. PROTON aims to have a strong product portfolio by
introducing “the right car, for the right market, at the right price and at the
right time”. PROTON has also continued to update and refresh existing
product lines to entice and attract customers.
2.2 Missions
Proton’s mission in its short-term goal is focusing on three main attributes
that distinguish itself from its competitors as follows: -
a) Economical – providing cars which are affordable, cost efficient and
value for money;
b) Caring – providing customer satisfaction and its social corporate
responsibility as a truly Malaysian car manufacturer and to enhance its
Customer Relationship Management (CRM)
c) Quality – providing a consistently improved product and customer
experience.
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Hence, by introducing new concept car known as Proton Exora 2, Proton
expects that it will improve its market share in the automotive industry
and improves its ranking in future.
2.3 Key Values of the Company
CORE
VALUES
DESCRIPTION
Quality We make products that work the first time, every time.
Customer
focus
Customers are the source of our income. We deliver on our
promises to our customers’ satisfaction.
Innovation We challenge convention, always seeking new and better ways
of doing things. We view change as opportunity.
Teamwork We trust, respect and share knowledge to foster teamwork at
the workplace.
Speed
We have a “can do” attitude and will not rest until the problem
is solved. We have an inherent sense of urgency in everything
we do.
Caring As a responsible corporation citizen, we invest in safety, health
and the environment.
2.4 Market Goals
The process in identifying the consumer target for new Proton Exora 2 is
important due to the fact that consumers tend to have different brand
knowledge structures and thus they will perceive differently for the
products or services. Proton has successfully identified their target market,
according to the segmentation bases namely behavioral, demographic and
psychographic factors.
2.5 Guiding Principle
There will be amendments on the National Automotive Policy (NAP)
because according to Malaysia’s World Trade Organization, the current
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import licensing or appoved permit (AP) mechanisms, excise duties and
other non-tax measures in the automotive sector will be terminated in the
near future (Rosli,2017). In addition, 10% Sales and Service Tax (SST) will
return and made effective on 1st September 2018. Before any new car can
be released to the market. The car makers need to get the certification
from NCAP (New Car Assesment Programme) and SIRIM (Scientific and
Industrial Research Insitute of Malaysia). The process will usually take
minimum one year to obtain these certifications 29 (Aziz, A. 2018)
3.0 COMPANY DESCRIPTION
3.1 Ownership and Details
PROTON has seen its fortunes dwindle due to growing competition from
local and foreign competitors as Malaysia opens up its auto market.
Malaysia is Southeast Asia's largest passenger car market with 497,459
vehicles sold in the year 2008. Malaysia’s auto market is dominated by its
national cars, PROTON and Perodua which in year 2000 accounted for
market share of roughly 90 percent of the vehicles sold annually. Some 25
other manufacturers compete for the remaining 10 percent. But compare
with last 2 years, market share of the national car makers has declined to
roughly 63 percent.
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During year 2000, PROTON conquered 63.4 per cent market share. It has
eroded to below 30 percent in year 2007 and 2008. Perodua, the second
national cars manufacturer has taken over the market of the king for two
years ago with a market share of 33.6 percent in 2008. Malaysia is
Southeast Asia's largest passenger car market with 497,459 vehicles sold
in the year 2008. Malaysia’s auto market is dominated by its national cars,
PROTON and Perodua which in year 2000 accounted for market share of
roughly 90 percent of the vehicles sold annually. During year 2000,
PROTON conquered 63.4 per cent market share. Perodua, the second
national cars manufacturer has taken over the market of the king since
two years ago with a market share of 33.6 percent in 2008.
PROTON is currently undergoing a transformation process as part of a
long-term turnaround plan. PROTON's tie up with Geely is expected to
return the company into profitability and regaining an international
presence, betting on the introduction of the much-anticipated SUV named
Boyue planned to be launched by the end of 2018. PROTON’s marketing
mix based on Kotler’s 4Ps model: Product, Price, Place and Promotion.
3.2 Organization Chart
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3.3 Location & facilities
3.3.1 Location
Proton Holdings Berhad (stylized PROTON) is a Malaysian car
manufacturer. It is headquartered in Shah Alam, Selangor and operates an
additional manufacturing plant in Tanjung Malim, Perak. The company was
established in 1983 as the sole national car company until the advent of
Perodua in 1993. Proton is a Malay acronym for Perusahaan Otomobil
Nasional Sendirian Berhad (National Automobile Company Private Limited).
3.3.2 Facilities
The R&D facility, where the dreams of the nation are transformed into
reality, provides a complete and comprehensive range of engineering
services both for the automotive industry as well as for engineering
consultancy for any industry requiring R&D expertise. As one of the
engines of growth for the country, PROTON has the responsibility to
contribute towards the industrialization of the nation. The facilities and
expertise available at PROTON's R&D facility, provides Malaysia with the
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Dato' Sri
Syed Faisal
Albar
(Chairman)
Amalanathan
Thomas
(Director)
Daniel Donghui
Li
(Director)
Feng Qing Feng
(Director)
Shaharul Farez
Hassan
(Director)

capability to lead the way by offering a complete range of engineering
solutions to both local and foreign companies.
3.4 Daily Operation Producers
3.4.1 Operations Review
The total amount of manufacturing is forecast to raise by 3 percent to
162,000 units for the next financial year. The rise in the single digit is the
consequence of the market's cautious tone owing to the global economic
crisis that has certainly affected the worldwide car market.
Approximately 90% of the volume is allocated to the domestic market,
with the remaining 10% reserved for export, as the overseas market has
been severely affected. The amount of production is anticipated to use
less than 50 percent of the installed plant capability of PROTON and all
plants are expected to function in the current financial year on a one-shift
basis.
The volume loss has encouraged the Group to further improve operational
efficiencies and enhance operations to reduce costs. PROTON is confident
that all the cost reduction initiatives suggested will be implemented
accordingly.
3.5 Suppliers & Management Control
Suppliers sell raw materials demanded by the company to produce final
products and services. Suppliers can influence marketing efforts. In the
automobile industry, the suppliers' power is increasing. If materials are
supplied at a high cost, it will definitely affect Proton’s competitiveness in
the market as the higher price will be passed back to the customers. This
is the reason why Proton should choose suppliers wisely. For example,
Mitsubishi Motors used to source for a large majority of vehicle platforms,
engines, parts, and technical experts before being fully sold to Khazanah
Nasional for it's more quality and worth the price.
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3.6 Administrative System & Future Service
Proton maintains its position as a national automotive industry pioneer
that caters to the masses. On this note, Proton has consistently produced
cars that offer value for money, affordable technology such as the Body
Control Module (BCM), as well as the Lotus ride and handling featured in
Proton cars. On an international level, Proton is determined to become a
recognized and relevant global automotive player. The export market
plays a big role in our future as the Malaysian domestic market’s growth is
becoming saturated — the cars-to-population ratio in Malaysia is very
similar to that of developed countries and growing at the rate of 3% to 4%
annually.
4.0 MARKET ANALYSIS
Every industry is being affected by the developments in the macro-
environment. Fundamentally, all organizations are affected by the same
developments; however, the extent to which organizations successfully
cope or take advantage of these developments differs in substantial
manner. Furthermore, developments may potentially influence one
industry more severely than other. Therefore, it is vital for organizations to
identify or anticipate the macro-developments in order to assess their
potential impact on the industry and the organization (Nijssen & Framback
2000, p. 53).
4.1 Market Segments
The company used to segment its market on variables such as behavioral,
demographic, and geographical differences.
Behavioral Segmentation
Behavioral segmentation is based on the customer's needs and
subsequent reaction to those needs or toward the purchase of intended
products and/or services.
Demographic Segmentation:
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