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