Upload
hoangthuy
View
215
Download
0
Embed Size (px)
Citation preview
BRAND POSITIONING IN NEW MARKET
PROTON EXORA IN INDIA
Background
Proton Holding Berhad was idea inspired by Malaysian Father of Modernisation, former
Prime Minister of Malaysia, who is Tun Dr Mahathir Mohamad in 1979. Proton is the first
national car maker, motivated to be accelerate Malaysia’s economies capabilities in order to
compete with other developed country. Proton was fully sponsored under the government, it
was being provided with funding, land, infrastructure and favourable policies also heavy
tariffs to protect its new born motor industry. Malaysia at the time, was lack of knowledge
and know-how in automotive manufactories, therefore, Mitsubishi Motors of Japan was
called to help building the factory, supplying production equipment and training people. In
1981, the late Yohei Mimura, the President of Mitsubishi Corporation (MC) visited Malaysia,
and on a separate meetings with the former Prime Minister of Malaysia, Tun Dr Mahathir
Mohamad, he was presented with the idea of collaboration between the two car maker
manufacturer. At first, Yohei Mimura disagree with the plan, but, soon later Mitsubsihi got
minority shares in Proton, and earned profit by supplying engines and transmissions.
After negotiation, Mitsubishi decided to agree and share the knowledge in developing Proton
first car. Only in 1982, the Cabinet agreed on the national car project. Thus, a special group
was formed. The head of the special team was Y. Bhg. Tan Sri Jamil Mohd Jan, and Y. Bhg
Dato Wan Nik Wan Ismail was voted as first manager and Executive Director, under a
company with the name of Perusahan Otomobil Nasional Sdn Bhd (PROTON) which then
was launched. A treaty agreement was signed between Perusahan Otomobil Nasional Sdn
Bhd (PROTON) with Mitsubishi Motor, and Heavy Industries Corporation of Malaysia
(HICOM).
In 1984, two years from signing of agreement, Perusahaan Otomobil Nasional (PROTON)
could come up with the first prototype of the car.The first car was known as Proton Saga,
proudly was launched to the market by Tun Dr Mahathir Mohamad, on 9 th July 1985.In
within a year in the market, it reached alsmot 10,000 orders locally, but international markets
are beginning to recognise the performance of Proton Saga. PROTON begins to looking at
border prospects of international markets within 2 years of its existence. In 1987, a new
model of Proton Saga, with imporved version called Proton Saga aeroback, was launched.
PROTON was able to produced and sold 50 000 amount of the car nationally. On the same
time, it begans exporting the car to neighbouring countries for example, Brunei, New
Zealand, Malta, and Sri Lanka. In addition, due to high market demands, and market growth,
PROTON recognise Proton Saga demands in United Kingdom, and Ireland, thus, a distributor
company under PROTON (UK) Ltd. was appointed.
PROTON was began to be appreciated in national and international market, within 5 years of
its market penetration. In 1988, its sold its 100 000th car, in addition, PROTON received three
prestigious awards in British International MotorShow.
The skilled and trained workers, also the expertise had enough knowledge on manufacturing
parts and engines, PROTON decided to launch their own MAGMA 8 valve engines. With
impressive background, and fast learning skilled workers, in 1990, PROTON could finally
work on their engines and modelling of the car by themselves independently. They build a
factory for Engines Parts Machining, and Transmission Assembly Plant in Batu Tiga, Shah
Alam.
Each year, PROTON was showing a remarkable growth in the market. Each year are also
showing, a launch of new model cars. For example in 1991, Proton Saga Aeroback 1.5, in
1992, Proton Iswara,in 1994, Proton Satria, in 1995, Proton Perdana, and Proton Iswara was
launched, in 1997, Proton Tiara, Proton Wira Diesel 2.0 and two door Proton Putra, In 1998,
Proton Perdana V6, and Proton Satria GTi, in 1999, Proton Wira 1,6 Millennium, In 2001,
Proton Putra, in 2002, Proton Arena, and Wira 1.8, in 2004, Gen 2, in 2005, Proton Savvy, in
2006, Satria Neo (Campro-engine), in 2008, Saga Waja CPS, Gen 2 CPS,Pesona Special
Edition, Proton Staria Neo, in 2010, Proton Sedan.
Proton kept relying on Mitsubishi technologies (plus some Citroen technologies later on)
until the end of 1990s. In order to build its own R&D autonomy, it purchased Lotus group of
UK in 1996. A specialized facility was setup at Norfolk to design and engineer cars for
Proton. The first fruit came as Waja (or Impian) in 2001. It showed some Lotus character in
handling, but the packaging and Mitsubishi engine remained outdated. As Mitsubishi sold out
all its stakes in Proton, the latter started sourcing engines from Renault.
The best achievement about the collobration of PROTON and Lotus Engineering is Campro
Engine. The name Campro is short for Cam Profiling. This engine powers the Proton Gen-2,
Proton Satria Neo, Proton Waja Campro, Proton Persona, Proton Saga and Proton Exora .
The Campro engine is aimed to show Proton's ability to make their own engines that produce
good power output and meet newer emission standards.
PROTON was able to capture the needs of its customers because they constantly adapt their
products to the country their marketing to, for example left hand proton Wira was launched to
be marketed in United Kingdom, and launched in Chile. While, some names of its model
might not be suitable for international market, it establishes a new name, for instance Proton
Arena is known as Proton Jumbuck in Australia.
In those excellence 25 years, PROTON has proudly bring the Malaysia to the eyes of the
world. Once upon a time, Malaysia have zero knowledge on automotive industries, but now,
it won awards nationally even internationally. Our national cars were a demands in various
international countries, for example, Proton Waja cars was used as a police car in United
Kingdom, while Proton Impian as taxi in Iran.
Among awards won are
Three awards in British International Motorshow, for coachwork and ergonomics
Voted Best Vale Car in Britain Magazine
Two gold awards in Birmingham Motorshow
Asian Management Awards in Operations Management from Asian Institute
Management
Won MATRADE Export Excellence Awards
Won Industry Excellence Awards for Quality Management Category 3 Awards
Won the Greenest Car in Australia Automotive Instutution
The Most Fuel Efficient to be Driven In Peninsular, for Proton Savvy, in Malaysian
Book of Record
Frost & Sullivan Awards 2011
Frost & Sullivan Asian Pacific for Proton Saga, Best Model Awards
Best Local Assembly MPV by Asian Auti-CVA Auto Industry Awards
Won the Most Trusted Brands in Gold Awards 2009
Won Best Automotive Awards for Proton Exora in Frost & Sullivan Malaysia
Excellence Awards
Product Background
Proton Exora is a compact multi-purpose vehicle (MPV) model produced by Malaysia car
manufacturer known as Proton Holdings Berhad (Proton). The new model car was launched
on 15 April 2009, which is the first Malaysian designed MPV. Proton Exora is a new lifestyle
family vehicle, which combines advanced styling, spacious interior, which accommodates 7
adults and has multiple usage, high quality design and good performance with emphasis on
value for money.
There are few competitor f Proton Exora, but there are definitely difference between all the
cars even they falls under the same categories, which is MPV.
ExoraLivina
1.6
Avanza
1.5Rondo Innova
Kerb
Weight1,422kg 1,245kg 1,120kg 1,563kg 1,575kg
Length 4,592mm 4,420mm 4,150mm 4,545mm 4,580mm
Width 1,809mm 1,690mm 1,630mm 1,800mm 1,770mm
Height 1,691mm 1,590mm 1,695mm 1,650mm 1,755mm
Wheelbase 2,730mm 2,600mm 2,655mm 2,700mm 2,750mm
Track (F) 1,542mm 1,470mm 1,415mm 1,573mm 1,510mm
Track (R) 1,530mm 1,475mm 1,425mm 1,569mm 1,510mm
Fuel Tank 55L 52L 45L 55L 55L
Power (hp) 125hp 104hp 108hp 142hp 134hp
Torque
(Nm)150Nm 150Nm 141Nm 189Nm 182Nm
kg/Nm 9.48 8.3 7.94 8.27 8.65
Consumer Information
India is experiencing rapid economic growth. This is marked by the increased affluence of
the burgeoning Indian middle class (Nagaraj, 2008), culminating in a huge growth in private
vehicle ownership. The most popular mode of transportation in India is a two-wheeler,
among them are motorcycle, snookers, and others. In the motorized two-wheelers segment,
India is the second largest market in the world with Japan being the largest. The sales of
motorized two-wheelers have exceeded that of cars by multiples since the seventies with over
9.3 million being sold in year 2009-2010. However, the present trend shows that the growth
rate of cars has become at par. With manufacturers competing to capture one of the fastest
growing car markets in the world, the Indian consumer is being offered increasingly larger set
of cars in various sizes and attributes to choose from. A nascent market, there are shifts in
popularity between the various car sizes.
Currently, India is the eleventh largest passenger car market having recorded domestic sales
of over 1.9 million cars in the country in the year 2009-2010. Apart of purchasing new car
model, India have a high percentage of sales on used car, which are constantly growing,
because a used car are valued high in term its quality. On the demand side, India is one of the
largest markets for small cars in the world, with more than 8 million households that can only
afford cars in the $5,000 to $8,000 range.
Currently, India is the eleventh largest passenger car market having recorded domestic sales
of over 1.9 million cars in the country in the year 2009-2010. Sales of passenger car have
constituted around 80% of automobile sales, this is due to rising per capita income and the
changing demographic distribution. Among the reason are stated by Srinivasan et.al. find in
their study of Chennai city conducted between 2004 and 2005 that income, presence of
female workers and school age children lead to increased probability of households owning a
car.
India has highest population below the age of 35 years old which makes up 70% of the total
population. This means among 130 million of its nation, is a working class. This situation
give rise for small and medium cars to dominant the market. On the same time, the market for
SUV and MPV are increasing growing.
For the last couple of years, sales figures have shown a shift towards bigger cars (SIAM,
2007).
78%
22%
SalesPasengger Car MPV/SUV
When it comes to making their final decision about which vehicle to buy, consumers focus on
factors such as reliability, safety, price and fuel economy.
An interesting aspect of the Indian passenger vehicles market is the fact that around 40 per
cent of the market comprises of consumers, who already own one car and are buying their
second car. Those replacing their current car comprise 28 per cent of the market. Buyers, who
replace their cars, usually upgrade to a higher segment. Indian consumers are value conscious
and cost of ownership is more important as compared to image, performance and power. This
is supported by the fact that 80 per cent of the cars sold in India are priced below US$
12,000.
Demographic factors such as age and gender accounted for some variances. For example,
older consumers tend to put more emphasis on reliability and safety than do younger
respondents. Those in the 50-plus age group were also more concerned with environmental
issues and fuel economy. The youngest respondents were most likely to rate the ability to
research information on the Internet as an important factor in their vehicle decision. Women
tend to rate most of the factors as more important than do men. The difference was most
pronounced for cash-back incentives, low financing, safety, environmental issues, fuel
economy and additional warranty coverage.
Competitive Information
There are 18 passenger vehicle manufactured for the India market
1. Maruti Suzuki
2. Hyundai
3. Tata Motors
4. Fiat
5. General Motors
6. Ford
7. Honda
8. Toyota
9. Mahindra & Mahindra
10. Skoda
11. Mercedez Benz
12. BMW
13. Hindustan Motors
14. Volkswagen 2
15. Nissan
16. Audi
17. Volvo
18. Porsche
The segements of Indian passenger car market
1. A1 (Mini) : ,3.4m
2. A2 (Compact) : 3.4m to 4.0m
3. A3 (Mid-Size) : 4.0m to 4.5m
4. A4 (Executive) : 4.5m to 4.7m
5. AS (Premium) : 4.7m to 5.0m
6. A6 (Luxury) : > 5.0m
MPV in the market for India
1. Hyundai ic25,
2. Maruti R3,
3. Ford B-Max
4. Toyota Innova,
5. Xylo
6. Chevrolet Orlando
The industry leader is Maruti Udyog with 46 per cent market share, followed by Tata Motors
and Hyundai Motors. India is considered as a strategic market by Suzuki, Japan, a co-
promoter of Maruti Udyog. Tata Motors, the largest automotive player in India is launching
the US$ 2,500 car. Hyundai Motors, the third largest passenger vehicle manufacturer in India,
has established its global manufacturing base for small cars in India and is a leading exporter
of small cars from the country. Mahindra & Mahindra is amongst the largest players in the of
cars in India. Other major players are Toyota, Honda Motors and Ford, all of these are
operating in the premium cars segment.
Although the competitors for Proton Exora fall under its market segmentation, which is other
MPV, however, due to few factors, passenger cars, are also an alternative for the consumer.
Thus, passengers’ cars also fall as a tight competition to Proton Exora. Even there is many
vehicles in each sub-segment, the target customer for each model is different.
Competitors for Proton Exora in India in the market segment of compact cars, which is MPV
product line :
1. Toyota Innova
Toyota Innova is currently the number 1 competitor and the leader in the MPV market in
India. The interiors are light and airy with the beige interiors adding further to the modern
appeal. At the rear, passengers are spoilt with separate AC vents and loads of legroom,
irrespective of the variant you choose. For the luggage space, it does get eaten up in the eight
seater version because it have separate compartment for language.
The 2.5-litre D-4D engine may not be the most refined of the lot, but certainly is very capable
to carry you the entire load you may throw at it. The 2-litre petrol engine option is an added
advantage and increases the appeal of the vehicle for large families to travel within the city.
Fuel irrespective, the vehicles pulls away seamlessly with just a light progressive input on the
throttle. With a great engine, well-appointed interiors and Toyota's legendary reliability, the
Innova definitely moves people in style across cities and over state-lines. Despite the quality
and design approach of Proton Exora, Proton Exora offers safety purposes which could
guarantee the safety of your family.
ELEMENTS OF TOYOTA INNOVA
PETROL
Engine: 1,998cc, inline four, VVTi
Power: 136PS @ 5,600rpm
Torque: 182Nm @ 4,000rpm
DIESEL
Engine: 2,494cc, inline four, D-4D
Power: 102PS@ 5,600rpm
Torque: 200Nm @ 1,400rpm
DIMENSIONS
Wheelbase: 2750mm
LxWxH: 4555 x 1770 x 1755mm
Weight: 1510-1585kg
2. Mahindra Xylo
Mahindra’s attack on the Innova territory comes with a decided Indian flavour, be it the
aggressive, big and butch design or its price factor. They already a hit in small towns and
rural India banking on Mahindra’s strong brand name in these areas, the Xylo offers a great
alternative take on a segment that has been dominated by the Japanese MPV.
3. Premier Rio
Premier Rio SUV is now available in petrol and diesel variants. The diesel unit is packed
with a 1.5L, 1489cc, Turbo diesel engine that produces 65PS of maximum power at 4000rpm
with 152Nm of maximum torque at 2250rpm. While Premier Rio petrol SUV has a four
cylinder 1173cc, 77 PS power engine under the hood where both the engines deliver high
performance. The diesel 1.5L, 1489cc Turbo diesel engine makes Premier Rio able to deliver
great acceleration with excellent fuel efficiency.
Automobiles may also launch one more powerful version of Premier Rio that will be packed
with turbo diesel engine that delivers 98PS of maximum power as with the launch of this
SUV company is directly going to compete with Maruti Gypsy, Mahindra Bolero and
Mahindra Xylo. But the company official said that Premier Rio is not going to compete in
any other SUV (Sports Utility Vehicle) in Indian market and it is a small model in
comparison to others. Although the car is in SUV market but will compete with MPV market
for Proton Exora, because it appear to be alternative for Proton Exora.
4. Tata Indigo Marina
Tata Indigo Marina being one of the market catching car in the category of utility vehicles is
the perfect blend of luxury and space. It comes with various advanced features like front and
rear cabin lamp with spot reading lamp, aluminum gear shift knob, HVAC system, 4 spoke
wheel, manual rear and front windows, body colored bumpers, black door handles, roof rails,
rub rails on door, full wheel covers, digital clock, partial fabric seats, retractable luggage
cover, side impact beams, collapsible steering column. It has engine capacity 1396 litre.
Advantages of Proton Exora
It has a great mix of reliability, refinement and comfort make it an equally appealing car for
families. Without sacrificing one of the element, Proton Exora fits all the necessary needs and
requirement which is needed.
An important advantage which is offered by Proton Exora is spaces on the inside, irrespective
of seating configuration.
Disadvantages of Proton Exora
One of the setback of Proton Exora,it rather plain when compared to the competition.When it
comes to choosing design of car, Proton Exora might not be very appealing to its target
market. However, different target audience is looking for different aspects in a car, some
might choose design, safety, reliability.
Despite its competitors, Proton Exora uses diesel engine. Diesel engine could do with more
refinement. With the current petrol price in the world market, the usage of diesel is more.
SWOT Analysis
Strength
PROTON has a full government support, as PROTON was accorded with 20 year
protectionist policies. In this policy, it regulates the price of PROTON’s car in Malaysia, and
also in the foreign countries. Proton has been protected by massive subsidies, in order to help
it attain the same economies of scale and other advantages enjoyed by established automobile
exporters. Malaysia’s protectionist policies have also accelerated the development of
automotive components and parts manufacturing. As an impact, high tariff are attached to the
import cars, while the national cars are made to be reasonable and affordable to the public.
Other imported cars which needs license to penetrate Malaysian market is limited. This gives
rise for the national car to flourish its market within 5 years of its existence. This help in
signifantly reduce loss of the unmatured industries, on the same time, reduce the foreign
exchange outlays.
PROTON is the first manufacturer for cars in Malaysia. Malaysian has a high affluence of
patriotism towards car produced under PROTON. PROTON’s cars were seen as a pride of
Malaysia, thus, its initiate customer to purchase the national car in favour of supporting local
products. However, with national pride, PROTON has successfully tackled the interest of the
local and even international market. It is believe that as the PROTON is co-related with the
country, Malaysia, it will not be made to jeopardize its reputation.
Although PROTON is inexperience, and has a short history in manufacturing cars, but, a
venture with few big manufacturers like Mitsubishi Motors in making of proton first car
has definitely brings the PROTON name elevated itself as the market player. With the help of
Mitsubishi Motors, spill of knowledge, and trained skills were exchange during that period.
Only with venture, other advantage could be seen, Malaysian workers were able to be trained,
and specialised workers were available. PROTON then was able to operate independently in
the market. In recent years, PROTON has collaborated with Renault to produce X.18 Model
engine and transmission. In 1996, PROTON even ventured with Lotus Group International
Limited, a British automotive engineering company to manufacture in luxury sports car.
PROTON has a variety of competitive priced products. PROTON was able to undertake
greater specialized production runs, and reduce the unit cost of production, thereby making
the suppliers more efficient in pricing and quality. Before being able to market their products
at a lower price, PROTON has make sure they control the operating costs, cost of sources
supply, and maximize utilization of resources and capability. Although it is relatively low
price in the market, PROTON has never taken their design for granted. Instead Proton
invested much faster and cost-efficient alternative with the advent of Rapid Prototyping (RP),
a new computerized technology used to physical prototype parts and tools. In addition, there
are three different activities, which is import, to manufacture in-house, or outsourcing from
local suppliers conducted by PROTON and rely on the most cheapest and reliable source with
required quality.
During its early period of time, PROTON had problem with their quality control. Complaints
are flowing in because of overall poor performance of the car. But now, PROTON has
upgraded themselves for a new campaign zero-defect to erase its reputation for poor quality.
Although the problem which arise was not critical, but certain measures was taken to improve
quality. PROTON has taken an extra mileage by installing the highest international
standards when it comes to passengers’ safety. The safety requirements needed are strictly
followed according to Australian Design Rule and Saudi Arabian Standards Organisation if
PROTON were to be marketed in their country. Yet, PROTON has establish a better
requirement for safety, as PROTON have increased 20 -30% extra then the benchmarked
given. Due to this, PROTON cars have been used for many purposes in many countries, for
example, for taxis, police patrol car, rent car and such.
Opportunities
PROTON is a world’s high demand product. PROTON has long known as highly
competitive products and has consumer-friendly prices. PROTON has seen its fortunes
dwindle due to growing competition from the local and foreign competitors. PROTON is
Southeast Asia’s largest passenger car with 4497,459 vehicles sold in the year 2008. In
Malaysia itself, PROTON and its sister company PERODUA accounted for 90 percent of the
market share of vehicles sold annually. Other 25 foreign manufacturers compete with the
other remaining 10 percent.
PROTON provided training to all employees to help them make decisions. Human capital
development programmes become more structured which helps to strengthen competitive
edge. PROTON had developed extensive vendor programme to ensure they adhere to the
expected quality which previously overlooked.
Since PROTON has a good reputation for corporate governance, which is the set of
processes, customs, policies, laws, and institutions affecting the way a corporation (or
company) are directed, administered or controlled. It has been looked to be good company to
collaborate and venture in too. Malaysia in general, is supporting for foreign companies to
participate with the local companies. With support from the government, and funds that are
available, increasing number of big foreign manufacturers are collaborating with PROTON.
For example, in India, PROTON has been collaborating with HINDUSTAN MOTORS. With
this collaboration, it’s has been made easier for PROTON to have opportunity to grow their
business globally. Without such partner, it will be hard for PROTON to penetrate other
country, and in addition, this joint venture, have given PROTON more experience, and better
know-how knowledge.
PROTON as been said is a government owned entities. PROTON is blessed with extra
budget for R&D every year. With such budget, PROTON could rely on heft money, for
product development, research on new niche market, the improvement of its technology, the
needs for better research on technologies to be used in future, even to expand their products
to other countries. With this being said, R&D will supports the idea of penetrating other
countries, only with enough budget, adaption of the product to certain country could be done.
Some countries like China and Gulf countries, are more confined, thus, research need to be
done in detail.
Malaysia is part of agreement between countries, for example, ASEAN, is a mutual
agreement between Malaysia with other neighbouring countries, including Indonesia,
Singapore, the Philippines, Brunei and Thailand including Cambodia, Laos, Burma and
Vietnam. Advantages of this agreement are that, tariff is eliminated between these country.
According to research done by Deutsch Bank Research, The member countries of ASEAN
(Association of Southeast Asian Nations) are characterised by strong economic growth. In
both 2011 and 2012 these countries are set to post real GDP growth rates of more than 5%,
following an 8% increase in 2010. German automakers currently account for just 1% of unit
sales in the ASEAN countries which is due in part to the high import tariffs of up to 80%.
Threats
PROTON is facing severe competition in its home market as government may remove rules
that protect local car makers when it reviews the 3 year old auto policy to boost foreign
investment. This reduction of the protection accorded to PROTON may increases its
difficulties to become market leader again. Although government has cut import taxes, it still
imposes high taxes on locally assembled foreign cars and this has given protection to national
car makers.
The other threats of course are competitors in the automotive industry. Even Perusahan
Otomotif Kedua (PERODUA) which is Malaysian 2nd national car maker, set up after
PROTON started to challenge PROTON’s market share in Malaysia. PERODUA actually
overstrike PROTON performance via their mist selling car modal so far, MYVI. However,
other competitors that are seen to be preferred by customers are foreign cars like Honda,
Toyota, Chevrolet and other brands. PROTON brand product categories itself against its
competitors Honda and Toyota because their product extensions are grouped together. Under
the Luxury category, there is no compatible PROTON product, but in Executive category,
Proton Perdana could be used to compare with Toyota Altis, and Honda Civic. Proton Waja
are more likely to have Toyota Vios and Honda City as its competitor, while for MPV, its
will be Proton Exora against Toyota Avanza, Toyota Wish, and Honda Stream.
Furthermore, the problem faced by car maker is that, they products are short life cycle
product. This means that, car will not have valued the same way when its initial launched,
then after 5 years. The price of the car, and its value will drop simultaneously. Customers are
frequently looking for a new design, new model in the market. Therefore, car makers need to
make sure they sold their car as quickly as possible, and after 5 years, they will need to come
up with a new model.
If a company, car maker decided to remain with the last design, while the other competitors
keep bring in a new model. Then, customer will most probably more attract with your
competitors than yours. Customers have certain mindset that, if they will be purchasing car,
might as well, it’s a new product, and more likely the newest design in the market. In every
category, there are lot of substitute or competitors that offer almost the same benefits are
you, but difference in pricing. So, if they were able to convince your customers, then, you
will lose them instantly. In India for example, it is a more tight competition, because there are
at least 60 car makers, all grouped under the same category which is small car.
With the short life cycle and too many competitors, its leads to a new situation where car
makers started to compete with technology they could offer. Competitors will design their car
with their latest and advanced engineering technology. Active market player, will compete
with one another to produce the best on that time, will other passive car makers,will only
copy and implement other technology. Car makers which are unable to compete with the
latest technology will fall to be the last on the market also consumer’s mind.
Despite the challenges that persistently impact the industry, which include the increasing
cost of manufacturing and raw material, shaken consumer confidence stemmed from the
threat of global economic slowdown as well as over-crowded operating environment.
Globally, the automotive industry is going through a period of change, reflecting both rapid
change of technology, increasing need to comply with continually more strict regulation
requirement and increasing of liberalization of markets.
Higher petrol prices and increased cost of raw material and manufacturing resulting in
lower profit margins, also posed a challenge.
Weakness
PROTON has been in the market for only 25 years, which can look at as having a short
history in automotive industry. Short history imposes a challenge to PROTON because
customers have perception such PROTON is inexperience and are not reliable. Due to
overload complaints from other consumer, criticising poor quality, and unimpressive
design of the car have cause other advance bookings been cancelled too. With the same
reason as short history, PROTON are not able to collect its revenue back, but its maintained
with government support, thus, any weakness will need to be absorb by the government itself.
This definitely leads to more money being pump in, but unable to collect any revenue.
PROTON therefore could only afford to expand their operation by advanced technology
by collaborating with other giant car makers, because of the high cost incurred. According to
PROTON’s annual report in 2008, PROTON’s financial performance for the second half of
the financial year was adversely affected by the accelerated amortization of dies and jigs for
certain models as well as higher commodity prices, increased costs of components and
raw materials which arose from higher foreign currency exchange rates particularly
Japanese Yen and US Dollar
Situation Analysis
KEY PROBLEM
Just like in any Asian developing country, India has a lot to fulfil while transporting its huge
population to and from their various destinations. With the largest population in India makes
the India as the second most populous nation in the world! A co-ordinated system of
transport plays an important role in the sustained economic growth of a country. Good
physical connectivity in the urban and rural areas is essential for economic growth.
Since the early 1990s, India's growing economy has witnessed a rise in demand for transport
infrastructure and services. However, the sector has not been able to keep pace with rising
demand and is proving to be a drag on the economy. Major improvements in the sector are
required to support the country's continued economic growth and to reduce poverty.
There were many kind of transportation can be found in India, it can be at Ports, Aviation,
Railway, Road. In some places, waterways are also used as a form of transport. Whatever the
ride, be sure to take in the whole scene - crowd and all - and truly experience transport in
India. Since our product is a car, we were analyzes about the road situation in India.
Roads are the dominant mode of transportation in India today. They carry almost 90 percent
of the country’s passenger traffic and 65 percent of its freight. (WorldBank)
Transport infrastructure in India is better developed in the southern and south western parts
of the country.
Inadequate transportation facilities retard the process of socioeconomic development in a
country. Especially in a heavily populated country such as India, managing different aspects
of transportation is a difficult task. Most developing countries are facing problems related to
traffic and transportation. Same goes to India, the most important problem concerning
highway/transportation professionals in India is that of highway safety. In India, there were a
lot of problems if we talking about the transportation in road such as:
a. India’s roads are congested and of poor quality. Mostly national highways are two
lanes or less. So it caused quarter of all India's highways are congested. Roadways are
already hopelessly congested, with average speeds declining each year. In Mumbai,
Delhi and other metropolitan center, roads are often severely congested during the
rush hours. Then, quality isn’t good, many roads, for example, were breaking up
because of overuse and lack of maintenance; railroads required new track and rolling
stock.
b. Rural areas have poor access. Many roads are of poor quality and road maintenance
remains under-funded - only around one-third of maintenance needs are met.
Elementary traffic control and management, often without even the most basic street
signage.
c. Extremely high and rapidly rising traffic fatalities, overcrowded, uncomfortable,
uncoordinated transport system causes accident. Another problem is about the
safety. Many developing countries including India have serious, road accident
problems. Fatality rates are quite high in comparison with developed countries. Many
developing countries face a worsening situation. A large number of deaths in the
developing world are due to road accidents.
d. Extremely high levels of transport-related pollution, noise and other
environmental impacts, especially in metropolises. There is also a growing concern
over the high degree of air pollution in Indian cities. (TRB Publication)
Most prominent among them is the high level of air pollution caused by motor
vehicles.
Large cities face major problems, which the smaller ones have, so far, not been noticeably
affected by. Roads are significant for the development of the rural areas - home for almost 70
percent of the India's population. The problem is more acute in India's northern and north
eastern states which are poorly linked to the country’s center major of economy.
So, from all these key problems that I’ve mentioned above, our company will know the real
problem that India’s transportation system faced since long time ago.
As Proton Exora is one of the MPV, a Multi Purpose Vehicle, this car is powered by a 1.6
litre petrol engine, produces 125 Bhp of maximum power and 150 Nm of maximum torque.
Bhp is stand for brake horse power where this type of car is more safety for the family and
also have large compartment with 8 seats. This car can solve the road problem in India. Such
as congested road, pollution, safety problem etc.
1. Decrease the consumption of cars in the road by car pool for working people and for
family, they can just fit in the car if they are from the big family.
- As our ozone layer have to be save due to create the clean environment which is pollution
problem.
- When the big family is going out for their trip, they can just fit in one car but if the
families have like 15 persons, and then they can use 2 cars for the trip and not 3 or 4 person
only in a car. This may help save the use of petrol and consumption of cars.
2. Decrease the cars on the road, thus decreasing amount of carbon dioxide emission.
- Since India is the large amount of population, they need their environment to be clean for
their surroundings.
3. Can be used as multi – purpose car for businesses purpose.
- As in the India country itself, most of their society also involves in the independent
market, they usually carry a lot of stuffs for their businesses so they can use the car for their
purposes.
4. Decreasing in the road accident.
- As we know, India carries the highest number of accident in the world. For make the
country more save and do not really stuck also rush on the road to go to the place they want,
why not use only one car. Here we can see this point can save the road accident in the
country.
Market Analysis
Our company, PROTON Holding Berhad, have a plan to go abroad to India, they try to go
entry the car market there. India’s car market is currently the sixth biggest in the world ,
growing at the second fastest rate in the world ,it is expected to be the 3 rd largest by the
2030.The Indian Auto mobile component industry is estimated to triple from 63 billion usd of
2009 to 190 billion USD by 2012. There has a been growth in sales of small cars of about
17% and 28% with luxury cars. Hyundai Tata Motor , Maruti Suzuki, Honda Ford and GM
constitute over 90 % of all car sales in India.Banks in India are now making car loans more
accessible as demonstrated 80% of the cars sold in 2004 being financed by bank loans.
Small cars are the best seller (about 70% of annual car production but we intend to make
MPV a strong competition by pitching the Proton Exora a as a family car. As Indians have
large extended families we believe this is the factor about the Proton Exora they will find
most appealing.
Automobile Domestic Sales Trends(India)
(Number
of
Vehicles)
Category 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Passenger Cars 509088 541491 696153 820179 882208 1076408
Utility Vehicles 104253 113620 146388 176360 194502 220199
MPVs 61775 52087 59555 65033 66366 83091
Total Passenger
Vehicles675116 707198 902096 1061572 1143076 1379698
M&HCVs 89999 115711 161395 198506 207472 275600
LCVs 56672 74971 98719 119924 143569 192282
Total
Commercial
146671 190682 260114 318430 351041 467882
Vehicles
Three Wheelers 200276 231529 284078 307862 359920 403909
Scooters 908268 825648 886295 922428 909051 940673
Motorcycles 2887194 3647493 4170445 4964753 5810599 6553664
Mopeds 408263 338985 307509 322584 332741 355870
Electrict Two
Wheelers- - - - - 7341
Total Two
Wheelers4203725 4812126 5364249 6209765 7052391 7857548
Grand Total 5225788 5941535 6810537 7897629 8906428 10109037
This is our new target market. We should know what benefits our target costumer are looking
for. What motivates them to purchase our product, Proton Exora? How the product is
purchased (impulse buys, internet, etc)? Understand the quantity a customer will purchase
and even trends in consumer tastes. So, that’s why we need to analyze our target costumer
segmentation. Target audience was classify into 4 groups based on the :
A. Geographic
Proton Exora divided the market into homogenous group based on the location, they
determine market size with looks to the population. Based on the research, our
company stated there were 7 countries that become our main target costumer since
India was a large country, we can’t cover up the whole country since it’s our 1st time
to entry India’s car market. India's largest cities are Mumbai (formerly Bombay),
Delhi, Kolkata (formerly Calcutta), Chennai (formerly Madras), Bengaluru (formerly
Bangalore), Hyderabad and Ahmedabad
B. Demographic
This target market is divided into a group based on consumer’s gender, age, income,
occupation, education, household size and stage in family life cycle.
The Proton Exora is designed as a family car so adults of age 30 to 40 with children
are the main target base.
C. Psycographic
This is a group that has similar psychological characteristic, values and lifestyle.
Middle class Families
”Striver” and”Traditionalist” personalities who maintain traditional values like keep
family close and extended families but also live modern progressive lives
D. Product-Related
The consumers is formed as a group that according to the strength of their product
loyalty. They become loyal because of variety reasons. A local consumer is needed
for a company because it means they were trust with the product and they will
purchase the product frequently.
Campaign Strategy
Objective
1. To increase awareness of MPV in the small car markets
2. To create desire in purchasing MPV cars
3. To penetrate the car markets and preferences of car in India
4. To portray the positive brand image of Proton, and Proton Exora.
5. To increase its sales of Proton Exora to 20% to 30%
6. To be a household name of families in India
7. To be market leader in 10 years of its penetration in India, estimating in the year 2020.
Targeting
Proton Exora will be marketed in 7 states, such Mumbai, Chennai, Kolkata, Ahmedabad,
Hyderabad, Delhi, and Mumbai. These states were chosen because they are most populated
and have a density with over 2 million populations compared to the whole India and are part
of metropolitan cities.Thus, this give rise to the boom in the Indian economy has led to the
rise of a new affluent middle and upper-middle class who have a large spending power. India
is a home to rising number of billionaires and many of them have made it to the Forbes
World Top 250 billionaire list.
Proton Exora is targeted to families and for business purposes. Why it is targeted to families?
It is due to the culture in India. The most widely desired residential unit is the joint family,
ideally consisting of three or four patrilineally related generations, all living under one roof,
working, eating, worshiping, and cooperating together in mutually beneficial social and
economic activities. Patrilineal joint families include men related through the male line, along
with their wives and children.
Despite the continuous and growing impact of urbanization, secularization, and
Westernization, the traditional joint household, both in ideal and in practice, remains the
primary social force in the lives of most Indians as loyalty to family is a deeply held ideal for
almost everyone.
Proton Exora can also be used for business purposes because this can be substitute for van, or
lorry. The huge space of the car and the ability of the car which could lays down also rotating
seats give the car advantage. Goods could be carried in the seat areas and boot. Apart from
goods, it could also be a people carrier, as the car could be used for example to sent and fetch
workers for work.
Positioning
Proton created a competitive positioning map from information solicited from consumers or
from their accumulated knowledge about markets. A positioning map might present two
things, price and perceived quality.
Positioning is placing a product at a certain point or location within a market in the minds of
prospective buyers.
There are few concepts on marketing Proton Exora in India :
Concept 1 : Perceptual Selection
In order to catch the attention of a target market, very wide tactics were implemented to
create interest among audience. The interests were instil to make the customer to feel like
they ‘need’ the car. According to Indian family value, and how they value they family, we
could create an advertisement for the car to be achieved as a need for a big families. Instead
of driving in two separate cars, an MPV will help to unite the family together when they are
going places, or visiting any destination.
Concept 2: Figure and Ground:
This concept for an advertisement well used when targeting a very unknown or very new to
the market. It could be done by displaying a famous person, or celebrities to present the brand
image of the company, but, their advantages or benefits were not empathized in the
advertisement.
Concept 3: Grouping the Advertisement:
The advertisement for the product runs on a particular theme. For example theme of ‘fun and
joy’ are associated customer’s decisions reflecting their respective choice and theme
matching their targeted lifestyle.
Concept 4: Positioning based on special benefit:
It shows the benefit of products which give an added advantage over the other competitive
products. For example, Proton Exora’s benefit such as bigger space, the consumption of
diesel, fuel savings, sets Proton Exora from its competitors, in the MPV markets segments.
These concepts were applied based on the culture and value in India’s market. India is a high
context culture, they have high uncertainty avoidance. Therefore they do not appreciate a
elaborated detail of technology and system. High uncertainty avoidance culture appreciate
other appeals in their advertisement, one of them is humour. Indian values on car when it is
marketed based on price strategy. Therefore, concept no 1 will be suitable to be used because
we try to create a niche market for MPV in India, although the idea of purchasing MPV is
still new, thus, instilling the ‘need’ in their mind, would help projecting better demands for
the car. Based on Maslow Hierachy, Maslow also coined the term Metamotivation to describe
the motivation of people who go beyond the scope of the basic needs and strive for constant
betterment. Metamotivated people are driven by B-needs (Being Needs), instead of
deficiency needs (D-Needs). Therefore, instead of projecting Proton Exora as a luxury, and
unrealistic, Proton Exora is portray as necessary need especially for big families, and for
business purposes.
Concept no 2 is chosen because of Indian because based on research also shows that celebrity
endorsement still plays an important role in generating brand salience and positively affecting
the brand image. In fact, 57 per cent believe that celebrity endorsement makes a brand stand
out, while 62 per cent agree that it enhances a brand’s personality. Conventional belief of
India market has a great influence of celebrity endorsement, as survey conducted, they
prefers local celebrities endorsement rather than international icon.
Concept no 3 is part of the advertisement because, when a theme were picked to represent the
companies brand, target audience who could related to such theme, will be more attracted to
purchase the product. For example, the theme Bold will attract those who’s their lifestyle is
daring and adventurous to be attracted to the product. A theme in the advertisement will make
the advertisement look consistent between all the media mix. With such consistency,
audience will remember the product and the company better.
Well concept no 4 is picked as part of the advertisement because it shows the benefit of the
car compared to its competitors. It is part of the advertisement as at a glance, audience could
differentiate the product to the current market. The benefit listed must therefore, be things
that are unique, and different from the others
Advertising and Marketing Communications Activities
Creative Strategy
Our creative strategy consists of a strong message that the advertisement wants to convey to
the audience, the desired targeted audience in 6 different states of India and the tone of the
advertisement which will eventually attract, interest and persuade consumers to purchase the
product in these markets. The creative strategy needs to be determined in the form of
advertising in order to compete with other competitors in the existing market. Therefore, all
adverts of Proton Exora will be targeted and in their language. This creative strategy will
work as a guideline for art directors and copywriters who are assigned to come up with the
advertisement and maintain the overall consistency in creative communications that will
attracts the targeted market. We believe that it is important to have one effective creative
strategy that Proton to achieve its advertising campaign and objectives. Proton has decided to
use ‘You will be Amazed’ as the brand slogan and Taglines and headlines will be focused for
families and long trips.
Why choose Proton Xora: - A Proton Xora is the best brand in the automobile market in
Malaysia, which is a trustable brand that gives safety guarantee
to passengers.
- another added advantage to Xora is 8 seated vehicle and very
suitable for a family. Since India has a high-context culture that
they believe in superiority and power. Therefore, for a family
ride Proton Exora is the most appropriate with low
consumption of petrol.
- The number one Automobile brand in Malaysia ‘Proton
Exora’ the brand itself creates an image and a good reputation
to make the customers comfortable and happy.
Creative Concept
Advertising concepts and elements (advertisements itself):-
Colors :
In choosing color for Proton Exora advert, which is targeted to Indian Market will be
culturally attractive to them, within their trends. The most colors used in the ads will be the
commonly used colors for festival and celebrations in India.
Image
Since the product ‘proton Exora’ is suitable for family use and other long trips such as family
trips and picnic by a group. So the image would show more of its purpose in a smooth and
long drive to its destination.
Complexity :
One of the difficulty would be to understand the vast audience of Indian market but since we
are going to promote and advertise in selected 7 states, that are the most highly populated
cities in India, this will enable us to reach the right audience.
Slogans : Perfect fit for happiness. This is to show how happiness could easily be
achieved when u are crowded with families, and friends with you. Rather than travelling
alone, now you could bring your beloved ones, in the same car as you. Long journey, or
family day will be so much fun and different.
Main selling points in the copy: One of the main selling points in the copy are that the car
is designed for comfortably 8 passengers, low petrol consumption and smooth drive for long
trips.
Action: at the launching events and other road shows booking opportunities will be
available across the 8 states of India.
Media Strategy
For this Proton Exora campaign, we will be using several traditional mass media formats
combined with online media advertising and BTL media.
In terms of broadcast media formats we will be using TV and Radio for the following
reasons:
TV
1. TV has a very wide target audience.
2. Adverts are both visual and audio.
3. With a series of good adverts can develop a relationship with the viewer e.g. they
remember the advert tagline or catch phrase.
4. Most households now have a TV and the reach of TV is very high especially at peak
times e.g. 8-9pm.
5. A wide variety of TV channels are available with which to advertise and therefore can
target certain audiences.
TV will comprise most of the budget for the Proton Exora campaign but selected magazines
and on-line adverts will be used to enhance the reach of the campaign. For the launching of
Proton Exora in India, we will use prime slots for the show.
- Radio
1. Radio also reaches a wide target audience.
2. Is a lot cheaper compared to many other forms of media.
3. Due to its low cost a high frequency of adverts can be played.
4. Can be very effective when adverts are placed at strategic times e.g. morning and
evening rush hours, a lot of people will listen to the radio whilst stuck in a traffic jam, and we
do know how congested traffic in India is.
5. Radio stations all have slightly different listener profiles and this allows you to select the
most suitable station to match with your target audience and therefore increase the
effectiveness of the advertising campaign.
For Print Media, the medium that we use is magazine and newspaper, but we will use
magazine more rather than newspaper and we will provide the reasons below.
Why Magazines?
1. Magazines tend to have a more specific readership and this will be used to focus in on
our target audience and maximize the budget we spend.
2. Newspapers only have a lifetime of 24hrs – by the next day they are usually thrown
away.
3. Magazines are typically published weekly or monthly and therefore the potential number
of readers per magazine copy compared to Newspapers is a lot higher.
4. Magazines are always in colour nowadays and tend to be full one or two page “glossy”
and “high quality” adverts compared to Newspapers which even when in colour sometimes
seem a bit dull.
But why do we still have to use Newspaper?
1. Unlike most media, the media newspaper allows us to create an ad in any size, depending
on the budget we use for the ad.
2. Newspaper advertising is among the fastest forms of advertising. Utilizing extremely
short deadlines, which is good for the ads to be created and run in a matter of days.
3. From targeting ad placement by section readership (in this case is the automotive
section), we can use inserts to finitely deliver to a few residential blocks, and newspapers
can fine-tune your message.
On-line adverts will also be used and for this campaign will focus on Facebook advertising
for the following reasons:
1. Facebook is the number one networking website in the world nowadays.
2. India is in the top 10 in the world in terms of growing countries on facebook.
(http://www.socialbakers.com/blog/38-top-10-countries-on-facebook-in-the-last-six-
months/)
3. More and more households have access to broadband / internet services and the Indian
government is making efforts for even remote rural areas to have internet access.
4. Facebook allows the advertiser to focus on a very specific target audience using factors
such as age, gender, occupation, location etc. This can maximize the budget spent since
you are more guaranteed that your target audience for the advertising campaign will see
the adverts.
Below The Line Media
Billboard ads will be set around the time of the launch to attract the people and reinforce the
brand image, and it will be set in cities such as:
- New Delhi
- Mumbai
- Chandigarh
- Valparai
- Pune
- Chennai
Reasons why is because the cities above are included in top 10 wealthiest city in India.
(http://trak.in/tags/business/2009/08/19/top-10-wealthiest-cities-india/)
Other Marketing Programs and events:
Special Prestigious Benefits for membership: - Being a member of Proton Exora (India) will
be providing special benefits to the customers, Such as one year free repair, Service for every
10000 miles. Advance booking during the launch period will be given a special discount and
privilege customer status.
Evaluation
The methods of evaluation that are going to be used for Proton Exora in India :
1. Test Drive
2. Interactive games
3. Facebook & Twitter medium
4. Bulk SMS
5. Interview with automotive icon in India
6. Questionnaire
7. Market review after 6 months from launching date
For the evaluation phase, these things above will be divided into two sections which is Pre-
Launch and Post-Launch.
For pre-launch the methods that are going to be used are:
Test Drive, Interactive Games, Facebook Medium, Bulk sms, and Interview with Indian
automotive icon.
For post-launch the methods that are going to be used are:
Questionnaire and Market review after 6 months
Methods explanation :
A. Test Drive
“How does a person know the quality of the car without a test drive?”
There will be a free test drive event a week before the launching of Proton Exora in
India, and of course on the day of the launch.
About 20 brand new Proton Exora with two variants will be able to be tested before
the launch. To be able to test the car, audience will have to complete or win the
interactive games provided by Proton. Customer will have approximately one hour
time to test the car accompanied by Proton team technician. By doing this, the tech-
guy will be able to explain the key features of driving Proton Exora.
On the day of the launch, Proton will provide 30 proton Exora test car.
B. Interactive Games
A month before the launch date, there will be interactive games created by the Proton
creative team. The interactive games include the proton history quiz, Proton Exora
mix and match game and an interactive racing game. In that way, the audience will be
briefly educated about what is Proton, the story behind it and the making of Proton
Exora. The winner of the games will have the chance to get a free test drive a brand
new Proton Exora and stand a chance to obtain a 50% rebate on purchase of brand
new Proton Exora.
C. Facebook& Twitter medium
Since there’s a big growth of Facebook user in India, expectation for exposure of
Proton Exora ad will be expected, therefore the creative team came up with a
Facebook Like button on the Proton Exora Facebook page. Using the results of
whoever press the like button, it will be automatically evaluated about how many
people that been exposed on the Proton Exora Facebook page.
Proton Exora will have Twitter medium also. The Creative team will produce one
Proton Exora Twitter account for people to follow. On the Twitter account, there will
be an update of the pre-launch and post-launch of Proton Exora, so the consumer will
be able to get information and give comments or complain thru the Twitter acc.
D. Bulk SMS
Using this method, a bulk SMS will be send to 500.000 cell phone numbers in India
focusing those who live in the city. On the SMS, there will be an option to reply the
SMS, therefore data collection would be easier for those who attend and aware of the
Proton Exora launch.
E. Interview with India automotive icon
There’s going to be an interview with Kumar Ram NarainKarthikeyan, a former F1
Driver from India. Not only F1, he previously completed A1 Grand Prix and Le Mans
Endurance race. The interview will take place after Narain finish test driving Proton
Exora. Using his evaluation of the car, positive response would be expected from the
consumer.
F. Questionnaire
Will be given and distributed one month after the Proton Exora launch. The content of
the questionnaire is used to evaluate customer satisfaction and to get feedback of
which area can be improved for Proton Exora.
G. Market Review
After 6 months from the date of the launch, Proton will do a market review in India
about the sales, the level of customer satisfaction, and areas of improvement.
Success Projection
There are different viewpoints about success of projection when it gets completed. Especially
when we talk about the objective of the projection the focus will be on its objective and goals
achieving. Scope of the work deliverability and accountability in implementation on time
would be the most crucial component of this projection. Launching of Proton Exora in India
will be evaluated and review periodically and check will be done during the campaign. The
campaign will be planned and implemented by using a full integrated marketing
communication strategy.
Product (Proton Exora)
Marketing Communication Plan
Market strategy
Implementation
Market evaluation