BBPM2203 Marketing Management Ii: Proton

BBPM2203
MARKETING MANAGEMENT II
ASSIGNMENT
PROTON
POLYCARP DANSON AK SIGAI

750705135101001
0198761120
[email protected]
TUTOR
MR. KERON MAPUS
PUSAT WILAYAH SARAWAK

SEPTEMBER 2009
BBPM 2203 - MARKETING MANAGEMENT II
750705135101001
Table of Contents
Introduction………………………….…………..……………………………… 2
1.0 The Concept of Marketing……………………………………………………. 3
2.0 The Main Objectives of Proton………………………………………………. 4
3.0 Marketing Objectives of Proton……………………………………………… 4
3.1 Positioning…….………………………………………………………. 5
3.2 Strategies………………………………………………………………. 7
3.3 Proton Differentiates…………………………………………………. 8
3.4 Success and Failure Analysis………………………………………. 8
3.5 Marketing Mix..………………………………………………………… 10

3.5.1 Product..……………………………………………………… 10
3.5.2 Product Development……………………………………… 11
3.5.3 Product Refreshment………………………………………. 12
3.5.3 Price…………………………………………………………… 13
3.5.4 Promotion.…………………………………………………… 14
3.6 Critical Issues/Challenges………………………………………….. 15
Conclusion………………………………………………………………………………….. 16
References……………………………………………………………………. 17
POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 1

750705135101001
INTRODUCTION
Proton was established in 1983 under the direction of the former Prime
Minister, Tun Dr. Mahathir Mohamad. Proton Holdings Berhad, the holding company
of Proton, is listed on the Bursa Malaysia. Proton principal activities are the
manufacture, assembly, trade and provision of engineering and other services in
respect of motor vehicles and related products. Operations are carried out in
Malaysia. Based on technology and parts from Mitsubishi Motors, production of the
first model, the Proton Saga began in September 1985 at its first manufacturing plant
in Shah Alam, Selangor. Initially the components of the car were entirely
manufactured by Mitsubishi but slowly local parts were being used as technologies
were transferred and skills were gained. The company has 140 sales outlets and 37
services branches and 113 services outlets across Malaysia.
Proton vision is to become Asia’s premier automotive brand; a brand that
connects with people and provides products which become life companions. Proton
has a unique ability to understand people’s needs and provide the right product with
efficient service and genuine quality. They build cars with care for passenger safety
and genuine quality in order to provide high durability and lifelong companionship.
Proton product are Proton Saga (1985), Proton Juara (2001), Proton Iswara
(1992) Proton Waja (2001), Proton Wira (1993), Arena (2002), Proton Satria GTi
(1994), Gen-2 (2004), Proton Putra (1995), Proton Savvy (2005), Proton Tiara
(1996), Perdana V6 (1998), Proton Persona (2007), Proton BLM (2007) and Proton
Exora (2009).

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1. The Concept of Marketing
Marketing is the process of planning and executing the conception, Pricing,
promotion, and distribution of ideas, goods and services to create exchanges that
satisfy individual and organizational objectives. This definition stresses the
importance of beneficial exchanges that satisfy objectives of both those who buy and
those who sell goods and services.
The purpose and objective of marketing are,
I. Marketing seeks, to assess the needs and wants of prospective customer
II. To satisfy them.
The key to achieving the two objectives is the idea of exchange or the trading of
things of value between buyer and seller. Strong customer-orientation and
competitively-priced products are the foundation of protons business and are
essential to the company’s success.

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2. The Main Objectives of Proton
Proton is Malaysia’s national car manufacturing company, while Proton Edar
being the sole marketing arm and distributor. As both the manufacturer as well as
the distribution arm of Proton cars, the quality production and quality deliveries of
proton cars to the customer may be affected when the quantitative sales target is
mixed with qualitative deliveries. Proton wants numbers and customer wants better
improved cars.
3. Marketing objectives of Proton
Proton target market is to meet the satisfaction level of target market. Current
promotions efforts to sell Proton products are :
 Current Mission of Proton: To strive towards excellence in all aspects of our

operations.
 Our Proposed Mission statement for Proton: Quality and luxury cars at an
affordable price
 Current vision: Being customer’s no 1 choice in automobile product and
services

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3.1 POSITIONING.
Positioning helps us to establish our products or services identity within the
eyes of the customer. A company's positioning strategy is affected by a number of
variables related to customer's motivations and requirements, as well as by its
competitor’s actions. Positioning is how we differentiate our products or services
from our competitors and then determine which market niche to fill.
As for Proton, they aims to maintain market leadership by continuing to
develop innovative products and through satisfying its customers in a more profitable
way than its competitors. Customer satisfaction is a key element where various
initiatives are being or will be rolled out to make the experience of owning a proton
car. Strong customer-orientation and competitively-priced products are the
foundation of protons business and are essential to the company’s success.
Until the end of the 1990s, the Proton car's logo featured the crest from
Malaysia's coat of arms, featuring a crescent and a fourteen-pointed star. The new
Proton logo features a stylized tiger head. In 1993, a model called Proton Wira was
introduced based on the Mitsubishi Lancer/Colt. More than 220,000 units were sold
between 1996 and 1998. Proton Perdana, based on the Mitsubishi Galant/Eterna,
was first produced in 1995, intended for higher end market. The Proton Waja (Proton
Impian in UK), which launched early 2001, is the first car model designed internally
by Proton.

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By 2002 Proton car sale was almost of over 60% in Malaysia, which was
reduced by 2005 and in 2008 when AFTA mandates reduce import tariffs to a
maximum of 5%. But, Proton has gained an additional source of engineering and
automotive expertise. This led to the production of Proton Gen-2 which was code
name Wira Replacement Model (WRM) before the launch. The Gen-2 is the first of
cars to be manufactured and assembled at the new manufacturing plant in Tanjung
Malim, Perak which is part of Proton City development project. The plant was
opened in 2004.
In 2005 Proton introduced the second model to be manufactured in Tanjung
Malim, the 1,200 cc 5-door supermini, the Proton Savvy. Both the Gen-2 and Savvy,
were models that MG Rover was looking to rebadged when the British firm entered
into collaboration talks with Proton. However these joint-venture talks were
unsuccessful and MG Rover subsequently collapsed.
Later, in 2007, Proton launches its new sedan as replacement version for
Wira Sedan but with new name, Persona. The new Proton Saga replacement model
(codename Proton BLM) was launched on 18 January 2008. The new Saga is based
on the Savvy platform, but using Campro 1.3L instead of Renault engine. It was
announced on August 8, 2008 that Proton is developing a new, fuel-efficient hybrid
car to beat rising costs and address environmental concerns. As of 3 August 2008,
Proton has produced 3 million cars since 1985, where the 3 millionth cars is a
second-generation Saga.

750705135101001
Proton, has successfully positioned themselves as the family value model.
The Proton cars brand has been sold over not only in Malaysia but internationally.
Proton has been re-positioned as a vehicle which had negative brand associations,
to one which regularly wins car of the year awards. The positive comments from the
industry and attributes of this vehicle is has changed the perception of consumers
about the Proton brand.
3.2 STRATEGIES.
Developing a positioning strategy depends much on how competitors position
themselves. The pricing strategy must reflect the benefit offered and the promotion
strategy must communicate this benefit. It’s offering a benefit which is superior
depends much on the marketing mix strategy the organisation adopts. Proton
commands a substantial share of the domestic market for passenger cars and over
the years has been building up distribution networks in key market centers across
the four regions:
• South-East Asia
• Middle East
• United Kingdom / Western Europe
• Australasia
The main business activities of the Proton then encompass vehicle
engineering, research & development, manufacturing, distribution and after-sales
services. Proton is also involved in financial services and property management in

750705135101001
supporting the main business activities. Proton designs and produces cars for
diverse consumer preferences.
3.3 PROTON DIFFERENTIATES.
Differentiates, is the act of designing a set of meaningful differences to
distinguish the company's offering from competitor's offerings.
Proton cars proved popular among budget-oriented motorists, and like
Japanese and South Korean models before them, led to the demise of
manufacturers, Proton concepts are to ensure that they meet smart personality
needs in terms of design, power and size for different age groups, so Proton can be
the right companion for life. It is an integral part of their business and their brand,
without which, Proton would not have either share of market or share of heart. 1985
marked a momentous year in Malaysia’s history – it was the year in which the
country’s first national car was born. Today, Proton has emerged as the only full-
fledged car manufacturer in the country.
3.4 SUCCESS AND FAILURE ANALYSIS
Malaysia has become a hotbed of production activity in recent years thanks to
a raft of new assembly licenses granted to international manufacturers. According to
Mahaleel Ariff, chief executive of state owned Proton, Malaysia’s output capacity has
now reached 700,000 units, of which his company and fellow national Perodua
account for 500,000 units. However, production fell from 563,408 units in 2005 to

750705135101001
503,048 units in 2006. The competitive position of state-owned carmakers Proton
and Perodua has remained a key focus for the Malaysian automobile industry in
recent years, with the two firms combined market share declining. Proton has been
particularly hard hit. A bloated workforce and a lack of new models have not helped
the firm, with the double-edged sword of long-standing government protection
militating against efficiency. In 2006, the company lost leadership of the market for
the first time, falling behind Perodua.
After that, leadership of the passenger market shifted for the first time ever
from national manufacturer Proton to local rival Perodua in 2006, as the domestic
giant’s sales fell by 30%, to 115,538 units or 32% of the market. Perodua, on the
other hand, increased its sales by 14%, to 152,733 units, boosting its market share
from 32% in 2005, to 42%. The overseas brands saw their combined share of the
passenger market fall slightly from 23% in 2005 to 22% in 2006. In terms of total
sales for all segments, Perodua again made its mark, claiming 32% of the market
from sales of 155,419 units, while Proton trailed with 24% from sales of 115,706
units. Toyota’s share of the total market is double that of its passenger car share with
16.7% with Honda pipped for fourth place by local firm Naza on 6.5%, against the
Japanese brand’s 5.4%.
The competitive environment category measures the opportunity for new
market entrants, based on existing manufacturers and brands in the country. Despite
increasing numbers of carmakers launching production activities in Malaysia, some
major manufacturers are still absent leaving opportunity for extra competition. The
market scores 5 out of 10. Another that, competitor is Toyota Motor Corporation;

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Honda Motor Company Ltd.; Shenyang Brilliance Automotive Company Ltd.;
Mitsubishi Motors Corporation; Yuejin Motor Group Corporation; Hyundai Motor
Company Ltd.; Mazda Motor Corporation; Daewoo-FSO Motor S.A.; Isuzu Motors
Ltd.; Kia Motors Corporation and Toyota Astra Motor PT.
Finally that, Perodua’s successful tie-up with Japanese manufacturers, as well
as an emphasis on small, fuel-efficient vehicles, allowed it to overtake Proton in
passenger-car sales in 2006. It outsold Proton in the domestic market both in 2006
and 2007. However, its subcompacts do not directly compete with larger, more
expensive Proton offerings. The company has 140 sales outlets and 37 service
branches and 113 service outlets across Malaysia.
3.5 MARKETING MIX
3.5.1 Product
The importance of ensuring Proton we have a strong product portfolio is all
the more crucial as it has a pivotal impact on their turnaround plans. This is
reinforced by their winning strategy of introducing ‘the right car, for the right market,
at the right price and at the right time’. This strategy was reflected in Proton newly
introduced Persona and Saga models, with the latter powered by the new CamPro
IAFM engine during the year under review and suffice to note. These two models are
performing tremendously well in the market to date.

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Furthermore, Proton has continued to update and refresh their existing
product lines to entice and attract customers. The re-energised Waja and Gen.2,
with their new look and powerful CamPro CPS engine, and the economical Savvy re-
designed to give better value proposition to the buyers of the Savvy Lite, have
successfully managed to excite car consumers in Malaysia during the year under
review. Staying on course, Proton, will has launching their first MPV in early 2009,
further solidifying their product line-up to include a high quality multi-purpose vehicle
that can cater to the family-oriented contemporary lifestyle.
Other exciting offerings are also in the pipeline with replacements for the Waja
and iconic Perdana on the drawing board. To sustain this positive momentum,
Proton has continued their research and development (R&D) efforts and
comprehensive market surveys to gain a deeper understanding of the needs of their
customer base. By harnessing the right technology and keeping their finger on the
pulse of customers’ requirements, Proton truly believe that this will bring us closer to
achieving their goals of a dynamic product portfolio.
3.5.2 Product Development
Proton models includes the reliable family-sedan Waja, the stylish Gen.2, the
elegant Perdana V6, the versatile Arena, the proven Saga range, the fun-to-drive
Savvy, the desirable sporty Satria Neo and the ‘2008 Best Model of the Year’ winner,
the Persona. Proton also has in its portfolio, the world-renowned Lotus sports cars,
with models such as Elise, Esprit, Exige, Europa and the recently unveiled Exora,
which was launched in 2009, to suit a range of customer demands and preferences.

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Proton conducts research in its center in Malaysia and the United Kingdom on new
technologies to create cars that are unique in both design and driving performance.
Through Lotus, the Group provides comprehensive and versatile consultancy
services to many of the world’s OEMs and Tier 1 suppliers.
Currently, the proton has almost 12,000 employees who are involved in the
whole value chain of the business, from research, design, development, testing,
stamping, casting, machining and assembly to marketing, distribution and after-sales
services. Strong customer orientation and competitively priced products are the
foundation of their business and essential to their success. They aim to maintain
market leadership by continuing to develop innovative products and satisfy their
customer’s needs better and enhance profitability.
With robust product planning, they were able to introduce both new and
improved Proton cars in the year under review, marked by the successful launch of
the Persona in August 2007, followed closely by the unveiling of the new Saga in
January 2008 and their first MPV, Exora in 2009.
3.5.3 Product Refreshments
Gen.2
The face-lift of Gen.2 was done in tandem with the initiation of the Persona
project to take advantage of cost sharing given that both projects share similarities in
terms of their interior design. As a result of the exterior face-lift, the Gen.2 now
features a new bumper, body kit, colour and alloy rims. Proton also upgraded parts

750705135101001
of the exterior and interior of the car based on customer’s feedback while introducing
the much-anticipated CamPro CPS powertrain. The engine’s Variable Intake
Manifold (VIM) switch alternates between a long intake manifold at low engine
speeds and a short intake manifold at higher engine speeds. Proton is applying a
longer intake manifold to achieve slower air flow, as this system has been found to
promote better mixing of fuel. The short intake manifold will allow more air to enter
faster and be especially beneficial to engines at high Revolutions Per Minute
(RPMs). With extra power, better handling and improved quality, the refreshed Gen.2
is set to become a highly competitive model in the sporty C-segment automotive
category.
3.5.4 Price
Now-a-days people more concern about money. The prices of the Proton cars
are still the lowest price among the imported cars. Current price is approximately
Rm25k-125k depending on the models. Proton is readjust the pricing for specific
models and make more flexible installment planning to encourage customer to
Proton cars.
Proton car prices, SATRIA 1.3GLi SE (Metallic) RM42,888.12. WIRA 1.5GL
(Metallic) RM47,320.00. WIRA 1.5GLi SE Aeroback (Metallic) RM50,027.97. WAJA
1.6L SOCH (Manual) RM59,455.60. GEN-2 1.6 DOCH Auto (Metallic) RM58,114.50.
PERDANA V6 2.0(A) RM106,096.94. ISWARA Aeroback 1.3S-LMST (Metallic)
RM38,500.81.

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Interest Rate is 3.88% for 7 years and 3.99% for 9 years. 2 years standard
manufacturing warranty plus 3 years Extended Warranty. Interest Rate is 3.88% for
7 years and 3.99% for 9 years.
3.5.5 Promotion
The year under review saw Proton aggressively augmenting the International
Sales & Services Division with additional human resources, focusing primarily on
technical support as well as after-sales and customer services. Clearly, this
investment reflects the importance of the export market in Proton’s long-term growth.
In terms of market expansion, the Proton successfully penetrated into China and
Thailand, while expanding their reach in Iran, the Middle East and Indonesia.
At the same time, Proton re-energised the Saudi Arabian market, which is crucial to
their success in the Middle East. The year also saw the implementation of a special
programmed for semi knocked-down (SKD) and completely knocked-down (CKD)
exports to Iran and China, which are expected to contribute positively towards the
new financial year’s export volume growth Proton’s technical support and after-sales
service capabilities must be of high standards in order to further enhance Proton’s
brand equity in the international market. Towards this end, several ‘Service
Campaigns’ were held during the year under review in our key export markets. Also
known as PROTON STAR, these campaigns included customer-focused initiatives
ranging from a 43-point check to discounts for spare parts. Naturally, these
campaigns are ideal platforms to bring Proton closer to the international customer
base. During the year, there was also a marked increase in the frequency of visits by
both the sales and technical teams to the various countries in which Proton has

750705135101001
presence, to enhance their understanding of the markets and provide better
response to the customers.
3.6 CRITICAL ISSUES/ CHALLENGES
On its own, Proton has limited funds for research and development. And the
bulk of its exports are mostly confined to less mature markets, including China and
some Gulf Cooperation Council. A tie-up with a strong foreign brand will enable
Proton to penetrate more discerning markets. But how many foreign stakeholders
would be willing to invest the money in Proton to develop new infrastructure and
facilities and share their latest technology without being given a substantial or
controlling stake in the car maker? That is a matter for the Government to ponder on
when the time comes.
Proton is a government subsidized company, Malaysia’s Pride. It is expected
to generate great revenue for the government but it’s unable to make this
achievement due to low quality management of their automobiles. Proton rising
inflation and high crude prices won’t hurt car sales because most of the models have
1.6-liter or smaller engines. Therefore I suggest that Proton to improve the quality,
provide all the necessary facilities and equipment for the employee, Actively
participate in all the Environmental, Health and Safety (EHS) programmers, Perform
Q.C tests and Position the Product in the appropriate Market segment by crating
Brand Image. It has a much potential high market in both domestic and
internationally, Proton just needs to know who its customers, what they want are and
put maximum efforts to satisfy those needs by learning from past mistakes.

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Therefore, Proton should position their products in the appropriate target
market with a new marketing mix, in other words if they target comparatively average
income consumers and make it a affordable product-then they must design and
provide facilities needed by that group of consumers and reaching the product to
them efficiently.
7. CONLUSION
Today, Proton has emerged as the only full-fledged car manufacturer in the
country. Proton’s current lineup includes the Saga, Iswara, Wira, Satria, Perdana,
Putra, Satria GTi, Juara, Waja, Arena (Jumbuck), Gen.2, Savvy, Satria Neo,
Persona and Proton very latest, the Exora. Proton not only commands a substantial
share of the domestic market for passenger cars, but over the years we have also
been building distribution networks in key market center across the four regions of
South East Asia, the Middle East, United Kingdom/Western Europe and Australia,
where Proton has become a hit with many car buyers. The imperative factor for
success lies in the people and the products. Proton employs a brand philosophy that
spells out Companionship. Proton’s core values of Companionship are in the areas
of placing customers first, even before profits. Customer satisfaction and lifelong
relationships stay at the heart of our organisation.

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

Pearson Prentice Hall, New Jersey.
Rain Stockton, Proton's Shares Increase as Its Deal with Volkswagen near
Conclusion, 26-07-2007, [online], available: http://www.articlesbase.com/automotive-
articles/protons-shares-increase-as-its-deal-with-volkswagen-near-conclusion-
188723.html
Robin Brant, Malaysia firm's 'Muslim car' plan, BBC News, 11 November 2007,
[online], available: http://news.bbc.co.uk/1/hi/world/asia-pacific/7089707.stm
Proton dealer does well in Kuwait, eyes Iraqi mart, DAILY EXPRESS NEWS, 01st
December, 2003, [online], available: http://www.dailyexpress.com.my/news.cfm?
NewsID=23260
ANNUAL REPORT PROTON 2008

http://www.proton.com/public/media/mediacentre/documents/annualreports/AReport
_2008.pdf
Chapter 2- strategy marketing Carl McDaniel, ChAerles W.Lamb and F.Hair, Jr.
(2008). introduction to Marketing (9th edition).Thomos South-Western
Financial Statement 2008 annual report

http://www.proton.com/public/media/mediacentre/documents/annualreports/AReport
_2008_5.pdf
List of Proton car models.

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

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BBPM2203

POLYCARP DANSON AK SIGAI

PUSAT WILAYAH SARAWAK

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

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

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

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

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

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

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

POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 1

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

services branches and 113 services outlets across Malaysia.

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

POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 2

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

satisfy individual and organizational objectives. This definition stresses the

those who sell goods and services.

The purpose and objective of marketing are,

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

II. To satisfy them.

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

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

essential to the company’s success.

POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 3

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

3. Marketing objectives of Proton

promotions efforts to sell Proton products are :

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

POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 4

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

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

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

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

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

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

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

POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 5

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

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

unsuccessful and MG Rover subsequently collapsed.

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

POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 6

about the Proton brand.

Developing a positioning strategy depends much on how competitors position

the four regions:

• United Kingdom / Western Europe

The main business activities of the Proton then encompass vehicle

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

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

POLYCARP DANSON AK SIGAI – 750705135101001 – BBPM2203 7

diverse consumer preferences.

3.3 PROTON DIFFERENTIATES.

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

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

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

fledged car manufacturer in the country.

3.4 SUCCESS AND FAILURE ANALYSIS