Marketing Plan for Malaysian Airlines System Bhd

“The airline industry is highly competitive, is characterized by low profit margins and high fixed

costs, and we may be unable to compete effectively against other airlines with greater financial

resources or lower operating costs.” (wikinvest.com)

The above quote clearly spells out the critical challenges for organizations within the airlines

industry. Consider the scenario for Malaysian Airlines System Bhd as they prepare to face the

challenges by the ASEAN Open Skies policy which comes into force in 2015. Discuss the

competitor analysis, emphasizing the determination of competitors’ objectives and strategies,

strengths and weaknesses, and reactions and assess whether to attack or avoid particular

competitors. Evaluate and explain what market strategies they should employ and why?

Please see the attached asignmnet question

ASSIGNMENT –

BMMS5103

FACULTY OF BUSINESS MANAGEMENT

Villa College

BMMS5103

MARKETING STRATEGY

ASSIGNMENT

May 2013 Semester

Date Assigned: 28 May 2013

Due Date: 17 July 2013 (before 6:00pm)

Lecturer: Ali Rasheed

Weighting: 60%

ASSIGNMENT – BMMS5103

MAY SEMESTER 2013

BMMS5103 – MARKETING STRATEGY

ASSIGNMENT (60%)

INDIVIDUAL ASSIGNMENT

This assignment calls for a critical analysis of different strategies that a company can take to
obtain a competitive advantage. Companies should aim to have a clear strategy and may
choose a basic competitive strategy. Whichever strategy the company chooses it must focus on
being market oriented – paying balanced attention to customers and competitors in designing its
marketing strategies.

ASSIGNMENT OBJECTIVES:

The assignment is intended to foster the following objectives:

1 Promote discussion of the competitor analysis, emphasizing the determination of

competitors’ objectives and strategies, strengths and weaknesses, and reactions – and
assess whether to attack or avoid particular competitors.

2 Define generic competitive strategies and the value disciplines of market leaders.
3 Determine when a company needs to move towards, or adopt, one-to-one marketing

strategies.
4 To understand and explain the fundamentals of competitive strategies based on

competitive positions in the market for market leaders, market challengers, market
followers and market nichers.

ASSIGNMENT QUESTION (MARKS 50%)

“The airline industry is highly competitive, is characterized by low profit margins and high fixed
costs, and we may be unable to compete effectively against other airlines with greater financial

resources or lower operating costs.” (wikinvest.com)

The above quote clearly spells out the critical challenges for organizations within the airlines
industry. Consider the scenario for Malaysian Airlines System Bhd as they prepare to face the
challenges by the ASEAN Open Skies policy which comes into force in 2015. Discuss the
competitor analysis, emphasizing the determination of competitors’ objectives and strategies,
strengths and weaknesses, and reactions and assess whether to attack or avoid particular
competitors. Evaluate and explain what market strategies they should employ and why?

Note: The grade for this assignment will be substantially influenced by the originality and overall
ability of the student to evaluate and apply marketing strategies realistically within the context of

ASSIGNMENT – BMMS5103

real world constraints. Any form of plagiarism and / or lack of proper referencing will result
in a substantial mark down or fail result.

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Annex

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FACULTY OF COMPUTING AND BUSINESS MANAGEMENT

Vila College

BMMK 5103

MARKETING MANAGEMENT

ASSIGNMENT

Marketing Plan

Date Assigned: 24tt’ September 2011

Due Date: 20th November 2011 before 9:O0pm)

Lecturer: Mr

Hamid Sodique

Prepared by: Imad Mohamed

Acknowledgement

First of all I would like to thank God as I am able to finish this assignment given by Mr.Hamid Sodique, lecture of the Module: Marketing Managemnet. This task cannot be completed without guidance and continued support of from lecture. Therefore I would like to take this opportunity to tank lecture, Mr.Hamid Sodique for his guidance for and explanation of the subject, and kind extension of deadline for submitting the assignment.

This task has been done with the help of and discussion with colleague students of the class, and I would address big thanks to all fellow students.

I am a civil servant having heavy workload especially during the time at which budget process is government beginning. My studies and work towards this assignment is completed because of the flexibility and support given by my office management and staff as well. I recognized the support of office management and thanks management of Department of National Planning and Ministry of Finance and Treasury.

Finally I thanks to my beloved family and friends that always stick together and also work hard to produce good assignment.

Contents

EXECUTIVE SUMMARY

1.

INTRODUCTION

1.2 AUTO INDUSTRY IN GENERAL 2009

1.2 COMPANY BACKGROUND

1.3 MISSION

1.4.

CORE VALUES

OF THE COMPANY

4.5 TARGET MARKET

2.

CURRENT MARKETING SITUATION

2.1 MARKET OVERVIEW

2.2 PRODUCTS

2.3 MARKET CHARACTERISTICS AND FORECASTS

2.4 PRODUCT DESIGNING

2.5 DISTRIBUTION AND PRICING TRENDS

2.6 IMPORT POSITIONING

2.7 MARKET SEGMENTS AND TARGET MARKET BEHAVIOR

3.

EXTERNAL ANALYSIS

3.1 PEST ANALYSIS

3.1.1 POLITICAL FACTORS

3.1.2 ECONOMIC FACTORS

2.1.3 SOCIAL FACTORS

3.1.4 TECHNOLOGICAL FACTORS

3.2. COMPANY INTERNAL ANALYSIS

3.2.1 STRENGTH

3.2.2 WEAKNESSES

3.2.3 OPPORTUNITIES

3.4 THREATS

4. COMPETITOR ANALYSIS

4.1 THREATS OF NEW ENTRY

4.2 HREAT OF SUBSTITUTION

4.3 BUYER POWER

4.4 SUPPLIERS POWER

4.5 COMPETITIVE RIVALRY

5. MARKETTING STRETEGIES

5.1 MARKETING OBJECTIVE

5.2 MARKET SEGMENTATION

5.3 LAUNCH OF NEW PRODUCTS

5.4 TARGET MARKETS

5.5 MARKETING MIX

5.5.1 PRODUCT

5.5.2 PRODUCT DEVELOPMENT

5.5.3 PRICE

5.5.4 PROMOTION

5.5.6 PLACE

6. ACTION PLAN

–

MARKETING MIXES

6.1 PRODUCT

6.2 PRICE

6.3 PLACE / DISTRIBUTION CHANNEL

6.4 PROMOTION

6.4.1 ADVERTISING

6.4.2 SALES PROMOTION

6.4.3 EVENT MARKETING AND SPONSORSHIP

6.4.4 PUBLIC RELATIONS AND PUBLICITY

6.4.5 INTERACTIVE / INTERNET MARKETING

7. IMPLEMENTATION SCHEDULE OR TIME LINE

8. PROJECTED PROFI & STATEMENT (2012-2015)

9. EVALUATION- MEASURES OF EFFECTIVENESS

10. CONCLUSION

REFERENCE

EXECUTIVE SUMMARY

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.

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 Inspira 2.0 is hope that the enhanced and new brand images and recommendations will be able to help PROTON establish a 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.

Possible solutions to mitigate the problems identified are by introducing additional value improvised features to enhance the performance and sales of Proton Inspira2.0 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, is to increase its sales and promotions, and give more emphasis on continued research and development to meet the changing needs of the customers. In this regard it is important that the company to increase its appearance on print and electronic medians and on internet especially on social media networks. It is also important to measure the impacts of the marketing campaign and to take necessary corrective action time to time to improve effectiveness and efficiency of the campaigns undertaken.

1. INTRODUCTION

1.2 AUTO INDUSTRY IN GENERAL 2009

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. 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.

Long term expectations are high for the small car segment, as the MAA envisages a shift towards more fuel-efficient cars. Even though there was a slow growth in 2010, sales of new cars reported a positive annual growth returned. Long-term expectations are high for the small car segment since the MAA provides a shift toward more fuel efficient cars.

1.2 COMPANY BACKGROUND

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 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.

1.3 MISSION

Proton’s mission in its short-term goal is focusing on three main attributes that distinguish itself from its competitors as follows:-

a) Economical – providing cars which are affordable, cost efficient and value for money;

Caring

– providing customer satisfaction and its social corporate responsibility as a truly Malaysian car manufacturer and to enhance its Customer Relationship Management (CRM)

Quality

– providing a consistently improved product and customer experience.

Hence, by introducing new concept car known as Proton

Exora

2, Proton expects that it will improve its market share in the automotive industry and improves its ranking in future.

1.4. CORE 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.

Sources: PROTON Annual Report 2009 – Proton’s Core Value

4.5 TARGET MARKET

The process in identifying the consumer target for new Proton Exora 2 is important due to the fact that consumers tend to have different brand knowledge structures and thus they will perceive differently for the products or services. Proton has successfully identified their target market, according to the segmentation bases namely behavioral, demographic and psychographic factors.

2. CURRENT MARKETING SITUATION

2.1 MARKET OVERVIEW

Once known as the king of the road, PROTON has seen its fortunes dwindle due to growing competition from local and foreign competitors as Malaysia opens up its auto market. Malaysia is Southeast Asia’s largest passenger car market with 497,459 vehicles sold in the year 2008. Malaysia’s auto market is dominated by its national cars, PROTON and Perodua which in year 2000 accounted for market share of roughly 90 percent of the vehicles sold annually. Some 25 other manufacturers compete for the remaining 10 percent. But compare with last 2 years, market share of the national car makers has declined to roughly 63 percent.

During year 2000, PROTON conquered 63.4 per cent market share. It has eroded to below 30 percent in year 2007 and 2008. Perodua, the second national cars manufacturer has taken over the market of the king since two years ago with a market share of 33.6 percent in 2008.

Figure 1: Show the Overall market share of passenger car market. (from MAA vehicle sales resources) Noted : 2006 data is not published

Although government has cut import taxes, it still imposes high taxes on locally assembled foreign cars and this has given protection to national carmakers.

In terms of financial performance, for the financial year ended 31 March 2009, PROTON recorded a loss after tax of RM301.8 million, although there was improved revenue of RM6.5 billion.

Malaysia – sales of vehicles by make, 2010 and 2009

Source: Malaysia Automotive Association, MAA

Note: All figures have been rounded to the nearest decimal point

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.

2.2 PRODUCTS

PROTON’s model products include WAJA, SATRIA, GTi, WIRA, ISWARA, ARENA, PERDANA V6, JUARA, PERSONA and EXORA. The range of 1.3, 1.5, 1.6, 1.8 and 2.0 litre engines satisfies a wide spectrum of customers both locally and abroad.

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. The 100,000th Proton Saga was produced in January 1989 and latest model is Inspira 2.0

2.3 MARKET CHARACTERISTICS AND FORECASTS

It is hard to see PROTON ever making money consistently with the current business model that it operates. At the heart of the car business is all about two basic things: cost structure and product, and it is difficult to get advantages of both factors. This could be best explained by example of General Motors which failed because it messed up on both counts.

Margins are generally so thin in the auto business that car factories really only make money when they are running at or near full capacity.

PROTON has not one, but two factories that can output a combined maximum of 1.2 million cars a year, yet it builds only 156,845 units.

2.4 PRODUCT DESIGNING

PROTON was established 25 years ago by Mr Mahathir Mohamad as part of an ambitious national industrialization plan, but it has long been criticized for poor quality and unimpressive design. PROTON’s major problem, as everybody knows, is quality control. Complaints typically relate to failures in power windows, doors and alarm systems. PROTON’s head of body engineering once told a local newspaper that the benchmark for world quality class cars is two defects per car but from our observation, world class quality car manufacturers have been aiming for zero defects all this time.

2.5 DISTRIBUTION AND PRICING TRENDS

PROTON cars are making their mark internationally as competitive and innovative automobiles with competitive prices. They are now being exported to 50 countries including the highly competitive United Kingdom and continental European markets. With concerted and unswerving commitment from customers, business associates, shareholders, government agencies, and employees, PROTON is realizing its goal of being an internationally successful Malaysian automotive manufacturer. It is achieving this by being customer oriented and by producing competitively priced and innovative products.

2.6 IMPORT POSITIONING

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 recognised 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.

2.7 MARKET SEGMENTS AND TARGET MARKET BEHAVIOR

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: Demographic segmentation refers to a wide study of the potential customers. Since the company is targeting its market to more economy class customers, demographic segmentation is employed by the company.

Geographical Segmentation: Geographical segmentation is done by dividing people (markets) into different geographical locations. The company targets markets of different countries other than Malaysia.

3. EXTERNAL 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).

3.1 PEST ANALYSIS

Political

· Asian Free Trade Area (AFTA)

· Different environmental Policies

Economic

· Global and local economic crisis;

· Slowing growth of Malaysian economy;

· Poor consumer sentiment and changing buying behavior of the consumer;

· Very competitive market

Social

· Huge population;

· Car ownership (1:5);

· Growing knowledge and concern of the people towards the environment;

· Impact of the image of the brand

· Slowing/decreasing buying pattern of the consumer.

Technological

· Competing development in technology;

· Maturity of technology;

· Intellectual property;

· Potential for innovation and development;

· Maturity and capacity of manufacturing

Table 2 shows the different factors which affect the operation of Proton and other major players in the industry in the country. Thus, all of the factors can be grouped into 4: political, economic, social and technological.

3.1.1 POLITICAL FACTORS

Currently, most of ASEAN region are free trade or 96% of the entire ASEAN trade. Asian Free Trade Area was established in January of 1992 in order to eliminate tariff barriers among the Southeast Asian countries. It planned to reduce tariffs to zero to 5% in 15 years among the six nations through a common effective preferential tariff (Ghani & Zainuddin 2008). If we are going to check on the high selling prices of the national cars of Malaysia because of high production costs and lack of vendor efficiency, there is a big possibility that the local market will be ruled by imported cars.

In Malaysia, PROTON prices are kept comparatively lower to foreign manufacturers through protectionism. Protectionist policy has largely been blamed for PROTON ‘s stagnating performance.

3.1.2 ECONOMIC FACTORS

The vehicle sales in the country is expected to fall by year by year due to different economic aspect, primarily the issue of global financial crisis, which affected the local financial status of the country (AseanOneMonitoring 2009). As a result, the government of the country is expecting a slow economic growth for the country, which can affect the buying behavior of the customers. Furthermore, due to the AFTA, it had increased the competition, which will impact the performance of Proton.

2.1.3 SOCIAL FACTORS

The growing population in the country is one of the factors which can affect the automobile industry. Furthermore, the ratio of car ownership in the country is somewhat high or total of 1:5, which signifies that people are considering cars as important things in their lives. Furthermore, people will also set on big-ticket items or consumers are expected to put off buying different motor vehicles because of the employment market uncertainty because of the global and local financial crisis (AseanOneMonitoring 2009).

3.1.4 TECHNOLOGICAL FACTORS

Due to the increasing competition, the development in technology is growing and affecting the performance and position of each and every company in the automobile industry. It is also important to consider the maturity of technology, together with the maturity and capacity of manufacturing, which affect the innovation process of any company. Due to the different technologies, primarily the help of computer and the Internet, the potential for innovation and development is increasing.

3.2. COMPANY INTERNAL ANALYSIS

SWOT Analysis

Strengths

· Competitively priced products

· Extensive nationwide distribution network

· Good corporate governance

· Influence of patriotism as Proton is national car-maker

· An extensive support from government

Weaknesses

· Low reputation on product performance and functionality

· High cost to expand their operation by advanced technology since it employ insufficient level of research and development

· Short history in automotive industry

· Vulnerable to increasing material cost (steel, etc)

Opportunities

· High demand on the products

· Opportunity to grow their business globally

· R&D Development

· Government support

· After-sales services

· Collaborations within automotive industry

Threats

· Competitors – local & international brands

· A lot of substitute products in market

· Fast changing and advanced engineering technology

· Economic downturn – decrease of car sales

3.2.1 STRENGTH

One of the important strengths of the company is its reputation or strong brand image due to the long years it had stayed in the industry. Because of that, the Malaysia people have become familiar and loyal to the brand, aside from the fact that Proton had become the national car brand in the country. Due to that, the car manufacturer has a strong support or back-up from the government, which is considered as an important entity in any business environment.

3.2.2 WEAKNESSES

First is the lack of R&D or innovation as well as lack of original products and limited products because of the inability of the company to introduce real new models, which lead them to cannibalize their screwed up line of products (BuildBoard n.d.). Furthermore, company is having different human resource issue due to their inability to retain and cultivate talent. Because of all these reasons, the company is lacking in international operations.

3.2.3 OPPORTUNITIES

The support of the government to the company is an important opportunity, because the government considers the company as their partner, therefore majority of cars needed by local and national government will be Proton. Entering new markets will also help the company to expand their business in terms of size; therefore can help to gain more turnovers.

3.4 THREATS

The most crucial threats to be faced by the company are the global financial crisis which affects the economy of Malaysia, and affect the lifestyle and buying behavior of the consumer. The main reason behind this situation is the AFTA which focus on reducing tariffs from zero to 5% in 15 years among the six nations through a common effective preferential tariff It planned to reduce tariffs to zero to 5% in 15 years among the six nations through a common effective preferential tariff (Ghani & Zainuddin 2008).

4. COMPETITOR ANALYSIS

4.1 THREATS OF NEW ENTRY

The threats of new entry pertain on how easy or difficult for new entrant to start competing (12Manage n.d.). The primary barriers of new entry are the high capital and investments that are needed in order to enter the industry.

4.2 HREAT OF SUBSTITUTION

The threats of substitution pertain on the ability of the customers to go for substitute products that might be cheaper and accessible. In terms of the passenger car industry, the growing demands for bikes and motorcycles.

4.3 BUYER POWER

The bargaining power of the customers in this industry is somewhat high due to the homogenous or almost the same products, which divide the number of sales from huge number of competitors.

4.4 SUPPLIERS POWER

The supplier has a neutral power over the industry. This is because there are few dominant suppliers in the industry who are well known for quality and brand image.

4.5 COMPETITIVE RIVALRY

The competitive rivalry pertains on the intensity of rivalry among the competitors in the industry. The low switching cost from one brand to another intensifies the competition in the market and pushes all of the major and minor players to focus on R&D and innovation processes in order to improve their overall performance in the market. Above all, the competition is increased due to high exit barriers due to the human resource and facilities

However other companies or brands competing with Proton’s more expensive offering includes

Toyota

and

Honda

, as described below.

Luxury	Executive	Family	MPV	Compact
Proton	–	Perdana	Waja	Exora	Savvy
Toyota	Camry	Altis	Vios	Avanza Wish	Yaris
Honda	Accord	Civic	City	Stream	Jazz

5. MARKETTING STRETEGIES

With the quality of its extended range, better quality product and value for money product positioning, brand proton will be increasingly attractive. As noted in last year’s report, to flourish and prosper, Proton has expanded its export potential even more. Tangible and sustainable growth in the international market will be the mainstay of the proton as it seeks to expand its market share and sales in export markets. Proton has accumulated a foothold in some markets, it is necessary to explore new emerging markets to explore. In accordance with the script of the proton for 10 years, the group is committed to expanding its presence in terms of sales and distribution, especially ASEAN, China, India and the Middle East. Proton and other car manufacturers, China is an important since it is booming economy in the region. Currently Protons has entered and expanded Chinese automotive market, which also allows its subsidiary, Lotus Group International Ltd., to achieve a strong position in Chinese automotive engineering services. Proton is also aware of the need to improve operational efficiency, particularly with regard to improving capacity utilization.

5.1 MARKETING OBJECTIVE

The marketting Objective is to market the new Proton lnspira 2.01 in Malaysia, and formulate a strategies that will assist Proton to aitain its objectives in increasing sales, market share and profitability of the PERUSAHAAN OTOMOBIL NASIONAL BERHAD.

5.2 MARKET SEGMENTATION

The company used to segment its market on variables such as behavioral, demographic, and geographical differences, mention in section 2.7

5.3 LAUNCH OF NEW PRODUCTS

One of the key competencies of the growth for each car manufacturer has its products. Single-minded approach should meet to update protons meet the range of products to meet changing needs and requirements of public procurement in the step and then Persona saga portrait during the examination. Persona is the first proton-production philosophy to embody “the right car for the right market at the right time at the right price.” People has more than 50,000 reservations were received in late July 2008.Persona followed by the discovery of new-car saga remains the epitome of Malaysian aspirations to become an internationally competitive automaker.

5.4 TARGET MARKETS

Since Proton is the largest and most competitive Malaysian automobile manufacturer, the most important target market of the company should be Malaysian Market.

Other

markets Proton automobiles targets include China, Singapore, Australia, Algeria and United Kingdom.

5.5 MARKETING MIX

5.5.1 PRODUCT

Introducing a strategy of the, right car for the right market at the right price and on time recently. Furthermore, it needs to continue strengthening product portfolio with a multi-purpose high-quality vehicles belonging to the family oriented modern lifestyle needs. By using the right technology and keeping finger on the pulse of customer needs, really believe that this will help bringing the company closer to achieving its goals of dynamic product portfolio.

As a strategy given above the Proton Inspira was launched which has almost zero difference between the Inspira and Lancer save for Proton’s unique front end design, which is of a V-shape as opposed to Mitsubishi’s trademark trapezoidal “jet fighter” grille. This will be followed by Ispiira 2.0.

5.5.2 PRODUCT DEVELOPMENT

With proper product planning, the company was be able to introduce both new and improved PROTON cars in the year under review, marked by the successful launch of the diffrerent models in past. The same stretegy will be used to for product developed by incoporating costomer needs and expectation, and research and development will be given more emphasises . A company can choose one or a combination of these product development strategies. Just remember the main objectives of your product development process:

1. To be prominent compared to competitors.

2. To continuously satisfy customers.

3. To expand your current market.

It will focus the Growth through an increased market base, increased sales and increased profit. However, it is not only product development that is important in a business but development of everything else that makes a business special, which includes to develop sales techniques, marketing strategies, manufacturing processes and office procedures. Products, processes, procedures, strategies and techniques, all of these can be researched and developed until they are all cutting edge.

5.5.3 PRICE

The firm’s pricing objectives must be identified in order to determine the optimal pricing. In this regard pricing objectives include the the comnapany started with t profit maximization objective of seeks to maximize the profit, taking into account revenue and costs. The second onjective is often to maximize long-term profits by increasing market share and lowering costs.

The pricing objectives are determind based on the factors including production cost, existence of economies of scale, barriers to entry, product differentiation, rate of product diffusion, the firm’s resources, and the product’s anticipated price elasticity of demand.

The company will used penetration pricing steretegy for new model such as Ispira 2.0, by charging for products which is set artificially low in order to gain market share. Once this is achieved, the price is increased.

5.5.4 PROMOTION

Promotion strategies will vary depending on the target market segment. World of mouth steretegy would be aplicable to all segamensts however, there is no direct action for this steretegy and would be incorporated to diiferent activities.. A costeffective campaign, focused on direct marketing, publicity, webpages/sites, and advertising is would be conducted as a promortional activities.

As part of the above stretegies, sales promotion could be conducted which includes several communications activities that attempt to provide added value or incentives to consumers, to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase.

There are mainly two main types of sales promotion strategies: Push, Pull, and as a third type combination of those two eill be used.

A push strategy involves convincing trade intermediary channel members to “push” the product through the distribution channels to the ultimate consumer via promotions and personal selling efforts. In this treagrds tactics like allowances, buy-back guarantees, free trials, contests, specialty advertising items, discounts, displays, and premiums would be employed in company’s sales promortion.

A pull strategy attempts to get consumers to “pull” the product from the manufacturer through the marketing channel. The company focuses its marketing communications efforts on consumers in the hope that it stimulates interest and demand for the product at the end-user level. This strategy is often employed if distributors are reluctant to carry a product because it gets as many consumers as possible to go to retail outlets and request the product, thus pulling it through the channel . Some of the tactics like providing samples, coupons, cash refunds and rebates, premiums, advertising specialties, loyalty programs/patronage rewards, contests, sweepstakes, games, and point-of-purchase (POP) displays, would be employed by the company.

5.5.6 PLACE

Since the term “ place’ really refers to any way that the customer can obtain a product, for selling of Proton Inspira 2.0 will be occur via any number of distribution channels, such as in a retail store, through and through the online orders. The customers could approach the product that it will ease for them to order or buy.

6. ACTION PLAN- MARKETING MIXES

6.1 PRODUCT

PROTON Holdings is the company which has commands a considerable market share in terms of the Malaysia automobile industry, particularly passenger cars.

As solving changing needs of customer needs, the new Inspira 2.0, Inspira wears 16-inch wheels with 205/60 rubber. The new improvement features like how to improve on quality of front wiper sound, absorber sound and so on.

6.2 PRICE

Pricing objectives has been set and it is clear that PROTON Holdings Berhad is marching towards the direction of profit maximization, looking at the extensive product development and product refreshment over the time. Generally consumers feel that the prices of PROTON’s products are affordable as compared with other brands in the category with which it competes.

6.3 PLACE / DISTRIBUTION CHANNEL

PROTON has 2 distribution channels which are PROTON EDAR and EON. PROTON has reduced the number of outlets by 24% to 302 outlets as compared to 397 outlets in year 2007 (FR 2008) in an exercise to reduce cost. However online ordering system will be placed and catalogue sales through sales agents will be accompanied in order to increase sales and market share of the company.

6.4 PROMOTION

Adding Inspira 2.0 to the portfolio, it will be using the existing Integrated Marketing Communications (IMC) over the years to promote its respective car models. In order to efficaciously contrivance IMC, quite a lot of tackles have been used such as advertising, promotion, event marketing and public relations , sponsorship, and publicity and internet & social networks such as facebook..

6.4.1 ADVERTISING

The company in general have three main types of advertising; print advertising, radio advertising and television commercial advertising. However every model has its specific featues on its own advertising even it is print or any other electronic form of advertising. In this regard Inspira 2.0 would have an extensive advertising on print media and social media as well as on TV focusing its new features, specific layout, and putting significant emphasizes on its car Unique Selling Proposition (USP).

6.4.2 SALES PROMOTION

Sales

Promotions

Selling Points

Drive for Cash

There will be lucky-draw of new PROTON car owner and winner will be given cash.

PROTON X Change

Old proton car owners are given coopon on 1000 RM to by new Inspira 2.0

6.4.3 EVENT MARKETING AND SPONSORSHIP

The company will sponsor the main sports events in Malaysia as title sponsor and few vents as main sponsor. This will be able to enhance their corporate image magnitudes, and will create more positive public perception on their brands, especially on new Ispira 2.0. Some of the sports events that could be sponsored as type of sponsorship is given below.

Main Sponsor

Sports Events		Type of Sponsorship
Le Tour de Langkawi			Main Sponsor
3-year sponsorship for A1-Team Malaysia	Title sponsor
Football Malaysian Super League	Tile Sponsor
Malaysia Super Series Badminton Tournament	Core Sponsor
Malaysian Open Bowling Championship
World Rally Super2000 in 2013	Tile Sponsor
Formula 1 Sepang Circuit		Title Sponsor
Lotus Team- Formula 1 in 2013	Main Sponsor

In addition to above sports events, the company could sponsor social events given below within three years.

Type of Sponsorship

Main Sponsor

Title Sponsor

Main Sponsor

Social-causes Events

Diploma in Civil Engineering Courses in three Universities 2012

Malaysian Skills Competition for the personal cars sector 2013

National Day Celebration 2013

6.4.4 PUBLIC RELATIONS AND PUBLICITY

The public relation effort of the company will be strengthened and tools such as press releases, press conferences, exclusives, interviews, community involvement and social media involvement would be enhanced during next three to four years.

6.4.5 INTERACTIVE / INTERNET MARKETING

As launching the Inspira 2.0, customer interaction though internet would be enhanced . In this regard customers could register on the webiste

www.proton-

edar.com.my and by logging on the suite customers could get information through question and answers, chat with public relation and engineering officials, and also could chat with the exiting customers to share their views. In addition the customers could fill the form and order and payment could be done by credit card. Additionally online advertisements will be done in social media sites and other well-known websites.

7. IMPLEMENTATION SCHEDULE OR TIME LINE

Implementation would be started on January 2011, and it will continue for four years. The detail work plan and time line will be prepared on approval of the plan.

8. PROJECTED PROFI & STATEMENT (2012-2015)

8.1 EXPECTED PROFIT AND LOSS OF INSPIRA 2.0 ( IN THAUSANDS)

$473,415

$6,500

$12,000

$6,600

$2,400

$6,000

$1,200

$3,744

$6,008

$9,000

$1,800

$4,800

$9,500

$3,640

$2,400

$2,736

$23,125

$2,124

$4,200

Pro Forma Profit and Loss
								FY 2012	FY 2023	FY 2014	FY 2015
Sales	$1,211,088	$1,279,204	$1,341,260	$1,529,036
Direct Cost of Sales	$398,407	$406,976	$415,276		$473,415
Other							$0
Total Cost of Sales	$398,407	$406,976	$415,276
Gross Margin	$812,681	$872,228	$925,984	$1,055,622
Gross Margin %	67.10%	68.19%	69.04%	$1
Expenses
Payroll	$400,788	$429,828	$431,128	$491,486
Marketing/Promotion	$22,000	$25,000	$15,000	$17,100
Depreciation			$6,500	$7,410
Leased Equipment			$12,000	$13,680
Accounting/Payroll Processing			$6,600	$7,524
Legal Retainer Fees						$2,400	$2,736
Business Licenses & Permits			$6,000	$6,840
Credit Card Expense	$19,983	$21,107	$22,131	$25,229
Bank Fees			$1,200	$1,368
Music & Entertainment			$3,744	$4,268
Training / Employee Retention Programs	$5,008		$6,008	$6,849
Repairs & Maintenance			$9,000	$10,260
Utility Services (Gas/Electric/Water/Sewer)	$26,496	$27,821	$28,933	$32,984
Telephone/Communication Expense			$1,800	$2,052
Insurance: Fire/Theft/Liability/Liquor/Product	$21,624	$22,705	$23,613	$26,919
Restaurant Occupancy Cost (Lease)	$77,250	$79,568	$81,955	$93,429
Payroll Taxes (FICA/FUTA/SUTA) & Employee Benefits	$66,531	$71,351	$71,567	$81,586
Exterminator/Trash Removal			$4,800	$5,472
Dishware/Uniforms/Cleaning Supplies/Decor	$12,466	$13,089	$13,612	$15,518
Printing/Paper/Postage/Subscriptions			$9,500	$10,830
Facility (Exterior Cleaning/Grease Trap/Hood/Windows,etc.)			$3,640	$4,150
R&D Meals
General Business Comps	$22,850		$23,125	$26,363
Owner Comps			$2,124	$2,421
Other Expenses (ComAreaMaint, etc.)			$4,200	$4,788
Total Operating Expenses	$750,903	$795,509	$792,981	$903,998
Profit Before Interest and Taxes	$61,778	$76,718	$133,004	$151,625
EBITDA	$68,278	$83,218	$139,504	$159,035
Interest Expense	$15,984	$12,640	$9,296	$10,597
Taxes Incurred	$13,738	$19,224	$37,112	$42,308
Net Profit	$32,056	$44,855	$86,595	$98,718
Net Profit/Sales	2.65%	3.51%	6.46%	$7

9. EVALUATION- MEASURES OF EFFECTIVENESS

As this campaign is long term campaign over four years, the following measures will be taken as towards monitoring and evaluation of specific activities.

No.	Promotion Mix	Measurement / Goals
1.	Advertising on print and electronic media	End of each year an impact assessment survey will be conducted to identify effectives of the campaigns. Based on finding necessary corrective action or changes will be taken to continue the campaign further.
2.	Sales promotion	One of the most important indicator to measure the effectiveness of the proportions will be number of sales occur due to that particular proportion. This will be identified by the application form which indicates the indicator to be filled by customers.
3.	Internet / Interactive Marketing	The effectiveness is based on the number of traffic generated on the website throughout the campaign period, and comments received from the users.

10. CONCLUSION

PROTON as the first Malaysian car manufacturer has established a very strong identification in the Malaysia automotive market. As a result, PROTON is unable to create positive response in the head and heart of its consumers. Based on its recent performance, PROTON has indeed working very hard to live up its working philosophy of producing the right car at the right time, for the right market, at the right price.

REFERENCE

1. PROTON’s Annual Report 2009.

2. Kotler, P. and Keller, K.L. (2009). Marketing Management (pp 53, 77-84) New Jersey: Pearson Prentice Hall

3. PROTON’s official homepage. (www.proton.com) & (www.proton-edar.com.my)

4. The Star, Wednesday 21,2007, Many Issues Still for Proton to Address.

5. The Malaysian Insider, Sunday, March 28 2010, Low Export Not Proton’s Real Problem

6. The Malay Mail, The Problem with Proton, by editor Leow Ju-Len, June 12, 2009.

7. A new in-car software application helps drivers reduce CO2 emissions. Accessed on March 22, 2010 from

8. Quirk, J. (2008, January 28). Car Technology: The Latest Innovations In Engine Development And Safety. Sky Motoring. Accessed on March 27, 2010 from

http://news.sky.com/skynews/Home/Sky-News-Archive/Article/20080641302627