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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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How Proton Implement International Marketing

Introduction

Proton is a car manufacturer which was founded in 1983. It was founded by the former Prime Minister of Malaysia, Tun Dr. Mahathir bin Mohamad. Proton actually comes from PeRusahaan OTOmobil Nasional Sendirian Berhad. It started when Tun Dr. Mahathir came out with the idea to create Malaysia's very own car production. It was to accelerate Malaysia's industrialization capabilities to match those of developed nations. The idea later became reality when the Cabinet approved the National Car Project in 1982 and in 1985, the first ever model was launched commercially by the name of Proton Saga.

In the early stages, Proton uses the parts and technology from Mitsubishi. Mitsubishi Motors Corporation (MMC) and Mitsubishi Corporation (MC) were the backbones of Proton's production. Besides than that, Proton's staffs trained under Mitsubishi in Japan as part of a bilateral agreement. This is to enhance the knowledge and gain every experience they can in order for Proton to penetrate the world market.

Today, Proton has become the market leader in Malaysia's automotive industry with the largest domestic market share and a distribution network that spans the globe.

Introduction to Global Marketing

As a well-known automobile company in Malaysia, Proton already planned out their moves to make it globalize. It is wise for Proton to go global in order to enhance their reputation and to develop more cars in the future. There are many competitors such as Honda, Mitsubishi, Toyota and more. These competitors help Proton to realize that they need to compete harder and enhance their technology in order to survive the global market.

In 1987, over 50,000 units of Proton Saga had been produced and sold in Bangladesh, Brunei, New Zealand, Malta and Sri Lanka. This was the first step taken by Proton in order to go globally and it was a great feedback. It shows that there were demands for Proton's cars and that was also the stepping stone for Proton to continue pursuing to a global market.

Proton carries the name of Malaysia by introducing the whole world that Malaysia can and have already produced and sold cars. It will definitely enhance Malaysia in terms of economics and portrays the development of Malaysia's automobile industry. Proton belief that when the cars are at low prices which are affordable; the customers will have no problem of purchasing the cars. By producing low-cost cars, it is much easier for Proton to enter the global market.

Proton's marketing concept was to create cars that can compete and suit all kinds of lifestyle. By that, Proton created cars based on the most universal or the most suitable type that customers prefer which is sedan type car. By this, it will be easier for Proton to penetrate the global market.

The Global Marketing Environment

Proton is an organization which now is fully owned by DRB-HICOM. DRB-HICOM is one of Malaysia's leading organizations involved in automotive manufacturing, assembly and distribution industry. In the beginning, Proton was a fully under the government of Malaysia. It was to use the Malaysia's relationship with Asia's countries in order to enter their market.

Proton had to target upper-middle-income countries such as China. By this, Proton has the advantage to enhance the automobile sector as people are more interested in it rather than agriculture that had dropped sharply. With what Proton has to offer, they did survive the global market by putting low prices in the chosen countries.

It means that Proton way of marketing is by putting low prices on their cars. It will give an advantage to the low-income countries and lower-middle-income countries to purchase Proton's cars. The only problem they did face was when they did their marketing at high-income countries. There are so many more well-known cars such as BMW, Audi, Ford etc, and this will give a side effect on the profit. On the other hand, with the low prices, Proton still have the advantage to survive.

The Global Trade Environment

Proton has used Free Trade Area in order to go globally. By that, in 1989, Proton managed to enter the United Kingdom market with the Proton Saga. It shows the possibilities and advantages by having the FTA agreement that can help both countries to achieve the ultimate goal with zero duties. It will definitely reduce the cost of the car itself.

Due to the positive collaboration, Proton had made another step by joining the ASEAN Free Trade Area (AFTA). By joining AFTA, Proton and Honda had done an early collaboration between them by investing around $41 million. The result of the collaboration was positive with almost 20,000 cars been produced since 2003.

For Proton, they did whatever necessary to be done to survive in the global market. Although Proton is not a well-known automotive company around the globe, competing with other stable and greater technology and knowledge companies, AFTA did support and helped with long term benefits for Proton. Today, we can see how well Proton is and how they can innovate their products.

In addition, other than the United Kingdom, Proton managed to enter the ASEAN countries. Most of the ASEAN countries have a mutual relationship with Malaysia as Proton is representing Malaysia. The countries are Indonesia, Brunei, Singapore etc. it shows that Proton has a very stable relationship around Asia. Other than that, Proton also managed to enter the Middle East market. With Kuwait and Saudi Arabia, Proton had proved that their products can survive the global market.

Social and Cultural Environments

Proton did launch their cars in Malaysia and mostly in Asia's country by using the right-hand driving style. It is the style that Proton used in each and every of the cars they produce. The Asians feel that as a normal thing and it is more suitable based on the style of roads in Asia.

Unlike in the European countries as their cars is left-hand driving style. Proton did what they need to pursue to the global market. They did change the left-hand driving style to all the cars that were entering the European market. This shows that, by following the culture of a certain place, Proton will have the advantage to still continue their global marketing plans.

Other than that, back in the days, when Proton entering Japan, the collaboration with Mitsubishi gave an important impact in order to survive the Japanese market. By that, Proton came out with the tagline ‘Japanese Technology, Malaysian Car'. It did give a great impact due to Japanese will always support their own products.  

As for the adoption process, Proton gave their customers to understand and know all of the information needed about the cars. The first step is searching for the information (awareness). Next is, if the customer likes on what they see, it is called interest. Then, the comparison will begin, and it is the evaluation from the customers. If the customers are truly happy with the car, they will have a trial which is the test drive of the car. Lastly, would be the adoption, on either to buy it or not.

The Political, Legal and Regulatory Environments

Proton is a representative for Malaysia in the automotive industry. Whatever they do will portray how well Malaysia can be. By that, Proton did come out with a great logo that reflects the Malaysian flag. By following the intellectual property, having a logo of its own will give the identity of the company itself.

A trademark is defined as a distinctive mark, which in this case, the logo of Proton. In 2016, Proton has introduced their new logo with the new black-and-silver color. "A new era, a new face. This new logo signals the beginning of a new era for all of us at Proton. It's more than just a new face. It's a new promise. A new attitude. A new commitment. Many do not know and have not driven our latest cars. It's time they did. It's time they knew who we are, what we stand for and how good our cars really are," Proton said on its FB page.

Other than that, licensing and trade sectors help Proton to be known all around the world. It means that, when Proton is giving the permission to use their name or product but with another company, it will help to increase the popularity of Proton. Proton entered the People's Republic of China in 2007 under a strategic joint venture with China Youngman Automobile Group Co., Ltd. The agreement involved a minimum of 30,000 Proton Gen-2 CBU units which were rebadged in China under Youngman's Europestar marque.

In 2008, the Proton Persona became the second model to be sold under the Europestar brand. The Gen-2 and Persona were known as the RCR (short for RaCeR or Racing) and Jing Yue between 2007 and late 2009, but both cars were facelifted and renamed as the L3 5-door and L3 4-door (or L3 Sedan) for the 2010 model year respectively.

Global Information Systems and Market Research  

Global information systems and market research are the tools the organization used in order to keep track and to keep every detail about their customers. In this case, Proton has their own systems and research in order to follow up with their customers. It is not just about the customers, but between staffs in the organization is important to stay connected.

By that, Proton uses the intranet. An intranet is a private network that allows authorized company personnel or outsiders to share information electronically in a secure fashion without generating mountains of paper. It helps Proton's staff to interact with each other by sharing information of customers. Every organization will definitely use the intranet for communicating between each other.

Other than that, Proton uses customer relationship management (CRM) to collect, store and analyze customer data. The system that Proton uses is called the Customers Advocacy Relationship Enhancement System (CARES), in partnership with Oracle Malaysia. Proton belief that it's the key business units in realizing the delivery of a consistent and superior customer experience. It was also for the marketing's department to use via e-mails and short messaging services and also to tracked customers' response to real-time campaign effectiveness.

The database is part of an efficiency drive that has resulted in Proton Cars' headquarters moving to Norwich to join its sister company Group Lotus. Proton's head office will have remote access to the database, to view customer details, listen to phone calls and flag customer records.

Segmentation, Targeting, and Positioning

As for the segmentation, Proton is very clear on who they decided to concentrate on. For types of cars, Proton did by the demographic segmentation. Proton had produced many kinds of cars such as sedan, MPV, and hatchback. Each and every one of the cars was designed to suit the status of an individual. For example, for families, they should buy the Proton Exora due to the spaces and the size of the car. It can fit more than five people at a time.

By producing cars that can suit varieties of ages, Proton has made a very significant step towards it. Age segmentation gives Proton the advantage on deciding the design and also the specs. Moreover, it will give Proton the advantage on putting the price on each and every type of the cars.

Other than that, Proton did use the psychographic segmentation in order to know on how to design the cars for the chosen customers. It means that, by knowing the lifestyle of the customers, Proton can target them for a particular car. For example, if a student wants to buy a car, it is most suitable to purchase either Proton Saga or Proton Iriz. This is because both cars suit the life of a student. Other than that, for a manager, he or she should choose to buy the Proton Preve or Proton Persona as they can afford and it suits their lifestyle.

Proton has faced so many competitors from the start. It doesn't mean that Proton is slowing down. From the beginning, Proton knows that competitors such Honda, Toyota and Mitsubishi will definitely come at some point. So, they were well prepared to face the competitors by having their own style of producing cars.

Importing, Exporting and Sourcing

At the beginning of Proton, there was no knowledge or technology in Malaysia that can help to produce a car. So, what Proton did was, they collaborate with Mitsubishi Motors Corporation (MMC) and Mitsubishi Corporation (MC).   

By that, it means that Proton needs to import most of the equipment and parts from Mitsubishi. This is what importing for Proton was. Proton imports parts from outside Malaysia and assembles it in Malaysia under Proton's roof. This shows the positive relationship between Mitsubishi and Proton over the years. Later in 2007, Proton rebadged the Mitsubishi Lancer into Proton Inspira.

Other than that, in order for Proton to enter the global market, they need to export their cars globally. Proton already did it in 1987 when they first launched the Proton Saga. There were five first countries that Proton exported cars which are Bangladesh, Brunei, New Zealand, Malta and Sri Lanka.

Global Market-Entry Strategies: Licensing, Investment, and Strategic Alliances

Proton did their licensing process a long time ago. This is to legally protect the asset available from being copy or plagiarism. It is important for Proton to protect what they have because as Proton is a small and growing company, many would take advantage of that. Lack of experience would turn Proton down from the automobile industry.

In order to enter the China market, Proton did give their permission for China Youngman Automobile Group Co. Ltd. to proceed on with the rebadged the Proton Gen-2. The agreement involved a minimum of 30,000 units. Later in 2008, the second model which was Proton Persona was to be sold under the European brand. This is one the ways that helped Proton to penetrate China's market. It was a tough competition due to China's automobile production.

Other than that, Proton did several of joint ventures with similar kind of automobile company. This was also to enter the market of the particular country. It is much easier when Proton did the joint venture due to the establishment of the other automobile company. For example, when Proton was trying to enter Japan's market, they did the joint venture with Mitsubishi. With the Proton Inspira that has been converted from the Mitsubishi Lancer, serves a symbol of the strong historical partnership between Proton and Mitsubishi Motors.

Brand and Product Decisions in Global Marketing

As for the final topic, Proton did the Basic Product Concept. With having the tangible attributes and intangible attributes, Proton has a very stable and convincing ground to stand on. It shows that Proton was and is particular on what they want their customers to know. The knowledge and information that they supply to the customers were and are complete enough.

As for the tangible attributes, customers can always take a look at how the car is. It is best for the customers to see and feel the car first before deciding on either to buy it or not. Proton also provides the accessibility to test drive on which car the customers want. It is wise to test drive the car and experience what the car can offer. On the other hand, for the intangible attributes, Proton provides services, warranties and guarantees. Services can be done whenever the customer feel like doing it. It is to change the parts that are about to decrease in terms of quality and quantity.

Product warranties are the service that the company can provide to the customers. Proton has provided warranties such as the 5 years comprehensive Factory Backed Warranty. It is for the selected cars such as Preve, Suprima S, and Exora. In addition to the 5 years Factory Backed Warranty, the vehicle is also covered by a 7-year Perforation Warranty.

As for the brand image, the world knows that Proton produces cheap cars. It is the suitable due to the technology and knowledge that Proton has. This is how Proton projects what they offer to the customers. Whenever a customer wants to buy a cheap car, Proton will have a bigger advantage to close the deal.

Conclusion

Proton is an automobile company that has been established since 1983. It was and still the leading automobile company in Malaysia. The technologies and knowledge are growing every second. By that, they have a stable but yet still much more to learn in order to improve their cars.

Proton will slowly turn the cheap cars into one of the most wanted cars in the world. This is because; Proton provides cheap and stable technology cars to the world. It will one day open the eyes of the world that although it is cheap, but it is also a quality car.

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