MARKETING STRATEGY PLAN FOR

PROTON HOLDINGS BERHAD

Written by
Mary Salang

MARKETING MANAGEMENT
May 16, 2018

Important remarks: This paper is an assignment, written by an MBA student. Some of

the information contained in this paper may be inaccurate and/or outdated. This
document can only be used as point of reference. It is not advisable to use the content
of this paper for any professional purpose.
Table of Contents

1.0 Executive Summary..................................................................................................... 2

2.0 Situation Analysis......................................................................................................... 3
2.1 Company.....................................................................................................................3
2.2 Collaborators.............................................................................................................. 8
2.3 Customers................................................................................................................... 9
2.4 Competitors.............................................................................................................. 10
2.5 Climate..................................................................................................................... 13
3.0 Marketing Strategy.................................................................................................... 14
3.1 Mission..................................................................................................................... 14
3.2 Marketing Objectives............................................................................................... 14
3.3 Financial Objectives................................................................................................. 16
3.4 Target Markets.......................................................................................................... 17
3.5 Positioning................................................................................................................17
3.6 Strategies.................................................................................................................. 19
3.7 Marketing Program...................................................................................................20
3.8 Marketing Research..................................................................................................21
4.0 Financials.................................................................................................................... 22
4.1 Break-Even Analysis................................................................................................ 22
4.2 Sales Forecast........................................................................................................... 23
4.3 Expense Forecast...................................................................................................... 24
5.0 Controls.......................................................................................................................24
5.1 Implementation.........................................................................................................25
5.2 Marketing Organization............................................................................................25
5.3 Contingency Planning.............................................................................................. 25
6.0 Conclusion...................................................................................................................26
References......................................................................................................................... 27

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1.0 Executive Summary

Being the first national badged car company in Malaysia, PROTON Holdings Berhad or
widely known as PROTON, is a homegrown automotive brand that is close to the hearts
of Malaysians. PROTON was launched in 1983 and its first car, PROTON Saga, became
an instant hit. Business was great for a decade until the Asian financial crisis in 1997.
Ever since then, PROTON has been in a roller-coaster ride, with declining sales and
reducing market share.

PROTON’s market share in Malaysia fell from its grace of 74% in 1993 to the lowest of
8.8% in December 2017. At its peak in 2002, PROTON sold 214,373 units, down to just
72,290 in 2016. This is far below its break-even of 100,000 to 120,000 cars per year. By
end of March 2016, PROTON reported a net loss of RM1.46 billion. So last year, 2017,
DRB-HICOM sold-off 49.9 per cent stake of PROTON to a Chinese automaker, Zhejiang
Geely Holdings Group.

2018 moving forward, with the new management in place, can PROTON revive itself and
bounce back to success? The objective of this paper is to provide a detail marketing
strategy for PROTON, by describing its past, current and future state, with some useful
recommendations and analysis that PROTON should consider in their journey to success.

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2.0 Situation Analysis
Lets look at PROTON’s situation analysis using The 5 C’s: Company, Collaborators,
Customers, Competitors and Climate.

2.1 Company

The conceptual idea of National Car was originated in 1979 by Tun Dr Mahathir
Mohamad, the 4th Prime Minister of Malaysia at that time. PROTON Holdings Berhad,
(PHB; informally PROTON) was incorporated in 7 May 1983. It is a Malaysia-based
corporation, active in automobile design, manufacturing, distribution and sales.
'PROTON' stands for Perusahaan Otomobil Nasional in Bahasa Malaysia (translated as
National Automobile Company). PROTON’s headquarter is in Shah Alam, Selangor and
it operates additional facilities at PROTON City, Perak (Tanjung Malim).

PROTON is currently undergoing a transformation process as part of a long-term

turnaround plan. PROTON's tie up with Geely is expected to return the company into
profitability and regaining an international presence, betting on the introduction of the
much-anticipated SUV named Boyue planned to be launched by the end of 2018.

Below is PROTON’s marketing mix based on Kotler’s 4Ps model: Product, Price, Place
and Promotion.

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Product Offering
PROTON has several product variance to meet different needs and tastes of customers.

PROTON’s 8 current models line up with calender year of introduction

PROTON’s current models are as follows:-

1) PROTON Saga (1985–present; A-Segment sedan) : Price RM36,800
2) PROTON Persona (2007–present; B-Segment sedan) : Price RM46,350
3) PROTON Iriz (2014–present; B-Segment hatchback) : Price RM41,620
4) PROTON Ertiga (2016–present; B-Segment mini-MPV) : Price RM58,800
5) PROTON Preve (2012–present; C-Segment sedan) : Price RM58,710
6) PROTON Suprima S (2013–present; C-Segment hatchback) : Price RM69,840
7) PROTON Exora (2009–present; C-Segment MPV) : Price RM67,220
8) PROTON Perdana (1995–present; D-Segment sedan) : Price RM113,438

PROTON’s former car model are as follows:-

9) PROTON Arena (2002-2010; C-segment coupe utility)
10) PROTON GEN•2 (2004-2012; C-segment hatchback)
11) PROTON Inspira (2010-2015; C-segment sedan)
12) PROTON Juara (2001-2003; A-segment microvan/MPV)
13) PROTON Putra (1996-2001; C-segment coupe)
14) PROTON Satria (1994-2005; C-segment hatchback)
15) PROTON Satria Neo (2006-2015; B-segment hatchback)
16) PROTON Savvy (2005-2011; A-segment hatchback)
17) PROTON Tiara (1996-2000; A-segment hatchback)

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18) PROTON Waja (2000-2011; C-segment sedan)
19) PROTON Wira (1993-2009; C-segment sedan)

Critical Issues
Throughout 35 years of business, PROTON has a long list of issues.

Made wrong investment at the wrong time - After its incorporation in 1983,
PROTON’s sales grew steadily and the future looked very promising. PROTON was very
ambitious that it bought Lotus Cars in 1996 to leverage on Lotus’ solid engineering
capabilities that PROTON could not have developed on its own. Sadly, the investment
was not a good move because of the financial crisis. Since 1996, Lotus Cars have lost
money amounting to an estimated of RM6 billion for over 20 years.

Too volatile for competition - In 2005, PROTON was overtaken by the second car
manufacturer in Malaysia, named The Perusahaan Otomobil Kedua Sendirian Berhad
(widely known as Perodua). PROTON’s sales declined for five years in a row due to
cheaper and more competitive offerings from Perodua. And then, in 2016, PROTON was
overtaken by Honda, putting PROTON in the third place, with Perodua at 32% , followed
by Honda at 18% and PROTON at 15%.

Protectionism policy by the government - A total of RM15.3 billion financial assistance

in the form of soft loans and grants was provided to national automaker Proton Holding's
Bhd since 1984.

Failing exports business - PROTON started exporting cars into the UK in 1989 and
Australia 1995. Exports sales to UK and Singapore have dropped to zero. In Australia,
from January to April 2017, PROTON only managed to sell 11 cars.

Huge financial losses - PROTON reported a net loss of RM1.46 billion in FY2016 ended
March 31. In the bid to save PROTON’s financial situation, DRB-HICOM took over
PROTON in 2012. DRB-HICOM itself incurred net losses of RM991.90 million in the

5
financial year ended March 31, 2016, mainly due to the poor performance of PROTON.

Jobs insecurity for its employees - Geely is now leading the production, sales and
marketing and Geely planned to relocate PROTON’s production plant from Shah Alam to
Tanjung Malaim, Perak making the future for PROTON’s 12,000 employees uncertain.

Underutilized production - PROTON is only producing around 70,000 units in 2016,

whereas its Tanjung Malim plant is able to produce an average of 500,000 cars annually.

Poor product quality - Based on a research on “Malaysians Perception on PROTON

Cars”, a report by Assoc. Prof. Dr. Idris bin Md.Noor from Universiti Malaysia Perlis, in
general, Malaysians have negative public perceptions about PROTON cars mainly
because of its poor product quality compared to other competitive brands.

Poor service quality - According to J.D. Power 2017 Malaysia Customer Service Index
(CSI), PROTON ranked number 9 (out of 10) with CSI rated average below average,
mainly due to a poor service quality.

Keys to Success
As we will discover more in this document, PROTON’s keys to success is to improve its
product and service quality, reduce costs, find new market through international exports,
increase utilization rate of its plants and last but not least, focus on people development.

6
SWOT Analysis

PROTON’s SWOT Analysis

Strengths : PROTON is the first national car manufacturer in Malaysia and it has 34
year-old legacy. This gives the company a good base and loyal customers. With variety of
car models, PROTON is able to meet different needs of its target segments. PROTON’s
cars are affordable and consumers buy PROTON because of its value for money.

Weaknesses : PROTON’s poor product and service quality is giving it a negative public
perception. PROTON lacks expertise in advanced automotive engineering technology,
which is why it has to collaborate with international partners who are experts in this area.
PROTON has high costs due to costly parts and costly technologies.

Opportunities : By increasing the utilization of its Tanjung Malim plant in Perak,

PROTON would be able to produce an average of 500,000 cars annually. PROTON can
leverage on its collaboration with Geely, and have access to Geely’s research and
development (R&D) center, which is equipped with Swedish technology and 10,000
engineers from 46 countries. Partnership with Geely will also expose PROTON to global
expansion with the opportunity to tap into 1.4 billion new market segment in China.

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PROTON has always been receiving support from the government, for example, in 2017,
the Malaysian government has allocated RM200 million for the relocation of PROTON
Holdings Bhd’s development plant from Shah Alam, Selangor, to Tanjung Malim in
Perak.

Threats : PROTON lost its market share from 70% before to below 15% because of
competitors. Main competitor of PROTON is PERODUA. Fuel price increase will put-off
customers into buying cars in general, which may impact PROTON as carmaker company.
PROTON is also threatened by market maturity in Malaysia, therefore it makes more
sense for PROTON to export its cars outside of Malaysia. According to Malaysia
Automotive Institute (MAI), the automotive industry will experience a slow market
growth at 2%. Car performance technology is changing fast and PROTON is not quick
enough to catch up to the changes.

2.2 Collaborators

PROTON’s former partners were Mitsubishi, Citroën and Youngman. PROTON’s current
partners are Honda, Suzuki and Geely. PROTON also work with its authorized dealers.

Honda
On 29 October 2012, PROTON entered a collaboration with Honda Motor Company, Ltd.
The result of the collaboration, the second generation PROTON Perdana to replace the
ageing PROTON Perdana V6, was unveiled on 11 December 2013 at an official
ceremony in Putrajaya.

Suzuki
PROTON partnered with Suzuki and rebadged the Suzuki Ertiga.

Geely Holdings
PROTON can benefit from Geely’s expertise on advanced automotive technology, in
return, Geely will help to increase the utilization rate of PROTON’s production plant in

8
Tanjung Malim by using it as the main hub to produce its right-hand cars. The partnership
will see the launching of the much-awaited SUV named Boyue by end of 2018. Looking
forward, the company is set to introduce more models to be co-developed with Geely.

Authorized Dealers

As part of PROTON’s business expansion plan, the national automaker is targeting to

convert all of its 1S (only sales) authorized dealers to 3S (sales, service and spare parts)
or 4S (the fourth ‘S’ includes body and paint) service centers. The target is to increase the
centers to a total of 109. Up until now, PROTON only has 66 authorized service centers.

2.3 Customers

Market segmentation
Behavioral factors
If we look at PROTON’s wide range of product offerings, it is clear that PROTON targets
customers with different behavioral factors, based on customers’ different background,
status and lifestyles who sought different benefits and occasions when buying a PROTON.
For example, PROTON’s 7-seater MPV called PROTON Exora targets a big family who
travel together most of the time. Hence, features such as safety and comfort is essential
for this group of target market. On the other hand, PROTON Suprima targets young,
active and single men with its athletic personality and sportier hatchback feature.

Demographic factors
PROTON targets customers aged 20 years and above, male and female, all races, family
member of 3 to 5, working adults with average monthly income of RM2,500 and above.

Psycho-graphic factors
Being labeled as a national car, PROTON harps on patriotism to influence the buying
decisions of its customers. It gives them a sense of belonging.

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Market Needs
There are five types of needs. Based on the picture below, PROTON may not have yet
captured the secret needs of customers.

2.4 Competitors

Last year, PROTON ranked at number 3 in terms of number of units of car sold and
market share. The gap between PROTON and Toyota is very little, so if PROTON is not
careful, Toyota could overtake it in 2018.

No Brand Units sold in 2017 Market share (%) in 2017

1 PERODUA 204,887 35.5
2 HONDA 109,511 19.0
3 PROTON 70,991 12.3
4 TOYOTA 70,445 12.2
5 NISSAN 27,154 4.7

Source: Malaysia Automotive Institute (MAI)

PERODUA
Malaysia's second largest automobile manufacturer after PROTON, Perusahaan Otomobil
Kedua Sendirian Berhad (Perodua), was established in 1992. Perodua operates two

10
manufacturing plants in Malaysia, with a maximum annual capacity of 350,000 units.
Perodua exports to Indonesia, Singapore, Mauritius, Fiji, Sri Lanka and Brunei. Perodua
is leading the market share with 35.5% in 2017. Perodua sold 204,887 unit in 2017 and
target to sell 209,000 units in 2018.

HONDA
Honda Malaysia Sdn. Bhd. was incorporated in 2000 and is based in Alor Gajah,
Malaysia. Honda has 96 dealerships nationwide. Honda retains its leading position as the
top non-national car brand in Malaysia and second place in overall total industry volume.
Honda Malaysia captured 19% of the market share in 2017 and this year 2018, it targets
to sell 109,000 units to capture 18% market share.

TOYOTA
UMW Toyota Motor Sdn. Bhd. (UMWT) distribute, assemble and export Toyota vehicles
in Malaysia. In 2017, Toyota managed to sell 70,445 units and target to sell more than
70,000 units in 2018.
Below is Porter’s Five Forces Framework for PROTON, to understand its business
environment better.

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 Porter’s Five Forces for PROTON

Industry Rivalry - As mentioned before, PROTON’s main competitors are Perodua,

Honda and Toyota.
Threat of Substitutes - Customers can use public transportation and other means of
transportation to substitute with PROTON.
Threat of New Entrants - Automotive industry is highly regulated with high costs,
hence the entry barrier is very high.
Bargaining power of Buyers - Car buyers have high bargaining powers because they
have many choices in the market (similar product with similar price range) and
substitutes.
Bargaining power of Suppliers - Local spare parts suppliers used to be powerful with
PROTON last time, but now with Geely’s partnership, PROTON has an alternative option
to source cheaper spare parts from China.

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2.5 Climate

Market maturity
The automotive market in Malaysia is facing market maturity. Compared to neighboring
country such as Thailand, Malaysia is a more mature market for automotive industry.
According to a report by MAI, Malaysia’s vehicle to 1,000 people ratio is 348.6 , which is
higher than Thailand 228.1 and Indonesia 87.3.

Market Trends
Based on an automotive updates by Malaysia Automotive Institute (MAI), the global
automotive future trends are going towards electric vehicle, plug-in hybrids and green
cars. There is also an interest in intelligent mobility. Perhaps this is one area that
PROTON could look at in future in order to meet the market trends.

Market Growth

The last couple of years have not been that great for players in the automotive industry.
Automotive Association (MAA) reported that the total industry volume (TIV) of newly
registered vehicles declined marginally by 0.6% in 2017. For 2018, both MAA and The
International Trade and Industry Ministry projected a 2% growth. MAI report also
mentioned that Malaysia’s TIV is comparatively lower than other Asean countries. TIV in
Thailand is more than 1.9 million units and Indonesia is more than 1.2 million units.
Hence, exports is the way moving forward.

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3.0 Marketing Strategy

Strategically, PROTON aimed to transform the business into profitability, hence the
decision to partner with Geely. PROTON is also looking at the opportunity to expand into
South East Asia markets. PROTON believe its value proposition of offering quality cars
at lower price will capture the market successfully.

To support the strategic decision, PROTON will implement key tactical plan. PROTON’s
cars will be equipped with advanced automotive technology from China, combined with
Volvo’s durability features for safety and comfort. Product price will be kept lower than
its competitors who offer similar range of product. Sales and service channels through
authorized dealers are upgraded from 1S to 3S/4S. Marketing promotion activities will
revolve around new product launches and exciting company’s progress announcements.

3.1 Mission

PROTON’s mission is to revive Malaysia’s national car and transform itself into a market
leader in Malaysia and South-East Asia. According to its CEO, PROTON aims to be the
top-three car maker in South-East Asia. PROTON’s wants to succeed its transformation
and become a model for other Malaysia-China joint ventures in Malaysia.

3.2 Marketing Objectives

Improve quality - PROTON’s number one objective is to improve the quality of its
products and services. PROTON’s car quality was improved 30%-50% using a stringent
system aligned to the international standard of Volvo cars, by infusion of technologies
and new energy vehicles. By the end of 2018, PROTON is expected to achieve the same
quality standard as Geely cars in China.

Launch new products - PROTON is planning to launch three new car models
throughout 2018 and upgrade four of its current models. PROTON is set to launch a new
sport utility vehicle (SUV) by end of 2018, the first product jointly developed with Geely.
The SUV will come with attractive features like adaptive cruise control and an

14
autonomous emergency braking system.

Enhance customer relationship - PROTON is in the progress of converting all of its 1S

(sales) authorized dealers to 3S (sales, service and spare parts) or 4S (the fourth ‘S’
includes body and paint) service centers. This is part of the strategy to enhance its
relationship with customers. PROTON’s customers would only need to go to one-stop
service center to conveniently enjoy all of PROTON’s services. With this in place,
PROTON would have the opportunity to know its customers better and create a better
relationship with their customers.

Increase sales - In volume projection, car output is to hit 200,000 units in 2020, above
300,000 in 2023 and 400,000 in 2027. PROTON’s new plant in Tanjung Malim is
expected to create 50,000 jobs. Once its sale volume hits 400,000 cars, the company will
bring in revenue of more than RM24 billion. Last year, PROTON’s best-selling car was
the most affordable-priced sedan, the Saga, which recorded steady sales preceding 30,000
units, while the Persona model sales rose 27% year-on-year to 19,510 units.

Grow market share - Within the next 10 years, PROTON wants to grab a 30% market
share in Malaysia and 10% of the Asean market share.

Enhance brand value - In order to instill brand confidence among its dealers, in
December 2017, top car dealers were invited to China to view Geely’s modern sales
network and the high-end technology employed in the making of Geely-Volvo cars.
PROTON is also building a brand awareness of the much anticipated new SUV, to the
consumers, by putting up an online poll in its Facebook (69,000 followers), inviting the
public to vote for the names of its first SUV. It received a huge number of responses. The
video on the new SUV was viewed for more than 165,000 times and 1,000 people shared
the content on their own personal pages.

Enter new markets globally - Malaysia market is small and is reaching maturity,
therefore export is the right way to go. In volume projection, PROTON’s car output is to

15
hit 200,000 units in 2020, above 300,000 in 2023 and 400,000 in 2027. In-line with the
increasing production, PROTON plans to export 25-30% of its annual sales, with major
chunk will be exported to China and Southeast Asia. China has 1.4 billion and Southeast
Asia has 600 million population.

Improve stakeholders relationship - In the next four years, PROTON plans to source
80% of the components and services locally, which means that local enterprises can enjoy
business benefit from PROTON.

3.3 Financial Objectives

Revenue
PROTON intends to generate sales based on the number of units produced, 200,000 units
in 2020, above 300,000 in 2023 and 400,000 in 2027. In average, one unit of PROTON’s
car is priced at RM60,000. Which means, PROTON will generate RM12 billion revenue
by 2020. However, based on actual results only 4,783 units have been sold so far in
January 2018.

Cost
PROTON has taken steps to reduce its auto parts prices by about 30% to manufacture and
distribute the product including material costs, shipping costs and personnel costs.

Advertising
PROTON will allocate only 5% percent of its profit margin for marketing and
advertising.

Profit
Last year PROTON reported a net loss of RM500 million. In 2018, PROTON received
government aid amounting to RM1.5 billion. PROTON hope to break even and target to
produce 80,000 car this year.

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3.4 Target Markets

PROTON will continue to serve the domestic market despite its challenges and tight
competition. For new markets, PROTON is also targeting to expand its products portfolio
in the A, B, SUV and MPV segments for their export market potential. These four
segments account for 68% of ASEAN’s total industry volume.

3.5 Positioning

Brand positioning - First national family car that offers quality, safety and comfort
features, which are affordable to own.

PROTON’s Value Proposition

Company & Product PROTON (automobile)
Target customers Quality-conscious customers
Key benefits Quality, Safety, Comfortable
Price Cheaper than other competitors in the market
Value proposition Better quality, safer and more comfortable cars
for your family, at a cheap price.

Product differentiation - PROTON differentiates itself by providing good quality cars

with cheaper price. model that are using advanced engine technology for great driving
performance, equipped with Volvo’s well-known safety and comfort features, but at a
much lower price.

Brand Asset Valuator (BAV) model - Based on Young & Rubicam’s BAV model,
PROTON’s brand is currently valued as low strength but it has high potential. With the
partnership with Geely, they are building stronger energy and relevance to the markets,
but are currently known to only a small audience (only 12% market share in Malaysia).
With a new group of management and long-term transformation plan in place, there is a
great potential for PROTON to move to the “Leadership” quadrant of BAV.

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BAV model

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3.6 Strategies

PROTON employs specific attack strategy for pricing and manufacturing cost.

(a) Pricing - by offering lower price than competitors for a similar range of product. The
Geely Boyue is currently priced around RM68,500 (110,000 yuan) in China, while
competitors such as the Honda CR-V and Mazda CX-5 are sold at over RM100,000.

(b) Reducing manufacturing cost - PROTON is already asking its spare part vendors to
reduce their price by 30%

For marketing channel, PROTON uses both push and pull strategy.

(c) Customer awareness through marketing communication

PROTON need to create customer awareness concerning the offered products and
services and then develop the customer base. The message that PROTON will
communicate is that it offers a better quality, safer and more comfortable features, using
advanced engine technology, riding on Volvo’s well-known safety technology. With the
awareness, let customers pass the words around through word-of-mouth marketing. The
words to pass around are, “PROTON, new product, new image, new hope”.

(d) Building trust through relationship marketing

PROTON can use relationship marketing to create relationships with customers and
develop trust to improve their perception, through face-to-face interactions, call centers
and social media.

(e) Create a modern market leader image by using digital marketing

PROTON can use various digital devices such as smartphones, computers, tablets, or
digital billboard to inform customers about their products and services. Digital marketing
can leverage on online, MyPROTON apps, PROTON’s web site and Facebook.

19
(f) Customize communication to different target segment using diversity marketing
PROTON can expand the reach of its target segment, who are from different culture,
beliefs, tastes and needs, with diversity marketing.

(g) Magazine and billboard advertisements to promote new product launches

PROTON can place advertisements in top automotive industry magazines and billboards.

(h) Test drive through trade show marketing because, “Its in the Drive”
PROTON can use trade show marketing to give face-to-face opportunity for customers to
test drive the advanced technology engine, to touch the comfort inside the cars, and to
feel safe being in PROTON’s cars. This test-drive experience could help instill customers
confidence of PROTON’s brand promise which is “Its in the Drive”.

3.7 Marketing Program

Throughout 2018, PROTON’s key marketing program are based on festivals.

 During the Chinese New Year festival, PROTON offered discounts for all its models
– up to RM500 for an Exora, up to RM1,000 for a Saga, up to RM1,000 for a
Persona, up to RM5,000 for an Iriz, and up to RM13,888 for a Perdana. Customers
can also drop by any authorised service centre for a free 20-point safety inspection.
 For Ramadhan and Eid Mubarak (Hari Raya), PROTON’s authorized dealers have
uploaded promotions on their websites. May 2018 promotion is RM2,000 rebates
plus complimentary free gifts worth RM1,388.
 Similar marketing program for Merdeka, Deepavali and Year-End campaign.
 Ongoing trade-ins program to encourage customers to trade their old cars with new
PROTON cars
 Three marketing program for the upcoming three new model launches including
PROTON’s first SUV launch by end of 2018.
 Dealership expansion program to upgrade its service centers
 Customer Care program to show that the PROTON cares about its customers and to
create relationship
 Social media contests (online polling through Facebook) to name the new SUV

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3.8 Marketing Research

Problem
There was a marketing research made by Associate Professor Dr. Idris bin Md.Noor,
School of Business Innovation & Technopreneurship from Universiti Malaysia Perlis.
The research examined public’s opinions and discover public’s perception towards the
brand. An investigation is necessary to clarify the choice made by the public’s views
toward PROTON.

Research plan
100 respondents were involved, 47% male and 53% female. 74% are below 31 years old,
23% are 32 to 41 years old, and 3% above 42. Types of research was exploratory, through
observation and questionnaires, using dichotomous and Likert scale.

Findings of the research

(1) Do you think PROTON cars are serving better than other brand cars?
55% agreed, 45% disagreed.

(2) Do you think PROTON has a wide variety of cars? 75% agreed, 26% disagreed.

(3) Do you think PROTON cars are worth their price? 65% agreed, 35% disagreed.

(4) If opportunity arises in the future to buy a car, would you prefer to buy a PROTON
car?
55% sais No, 45% said Yes.

(5) What are the factors you considered while purchasing your car?
The results were based on Likert scale. The top most favourable are Quality (4.36), Safety
(4.36), Comfort (4.28) and Performance (4.26).

(6) Which of the following information sources did you use to find out about PROTON
cars?

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18% Word-of-mouth, 13% Television, 12% Newspaper, 12% Internet, 7% Exhibitions
and
7% Salesperson

4.0 Financials

This section will offer the financial overview of PROTON related to marketing activities.
PROTON will address break-even analysis, sales forecasts, expense forecast, and indicate
how these activities link to the marketing strategy.

4.1 Break-Even Analysis

For PROTON to break even, it needs to produce 100,000 to 120,000 number of cars per
year, which means it need RM600 million sales to reach break-even point.

TABLE 1 : Break-Even Analysis

Yearly car production to break-even 100,000 to 120,000

Monthly car production to break-even 10,000

(based on the HIGHEST break-even)

Monthly Sales Break-Even RM600,000,000

Monthly Costs (80% from Revenue) RM480,000,000

Monthly Profit Break-Even RM120,000,000

Assumptions:-
Average car price per unit RM60,000

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4.2 Sales Forecast

As mentioned before, PROTON target to generate sales based on the number of units
produced 200,000 units in 2020, above 300,000 in 2023, 400,000 in 2027.

TABLE 2 : Monthly Sales Forecast

2018 2019 2020
(RM) (RM) (RM)
Sales 400,000,000 600,000,000 1,000,000,000

Cost of Sales 320,000,000 480,000,000 800,000,000

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4.3 Expense Forecast

The expense forecast will be used as a tool to keep PROTON on target and provide
indicators when adjustments are needed to properly implement the marketing plan.

Monthly Expense Budget

TABLE 3 : Monthly Marketing Expense Budget

2018 2019 2020
(RM) (RM) (RM)
Website 400,000 600,000 1,000,000
MyPROTON
400,000 600,000 1,000,000
App
Advertisement 1,200,000 1,800,000 3,000,000
Printed materials 800,000 1,200,000 2,000,000
Trade shows 1,200,000 1,800,000 3,000,000

Percent of 5% 5% 5%
Margin
Contribution
4,000,000 6,000,000 10,000,000
Margin

5.0 Controls

The purpose of PROTON’s marketing plan is to serve as a guide for the organization. The
following areas will be monitored to gauge performance:
 Revenue: Monthly, quarterly and annually
 Expenses: Monthly, quarterly and annually
 Sales growth: Monthly, quarterly and annually
 Customer satisfaction Index (CSI)
 Authorized Dealers service performance index
 New-product development
 Marketing campaign
 Staff Training to increase capabilities and knowledge

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5.1 Implementation

The following milestones identify the key marketing programs. It is important to

accomplish each one on time and on budget.

PROTON’s Marketing Initiatives based on Marketing Program

5.2 Marketing Organization

Geely will be responsible for PROTON’s production, sales and marketing, meanwhile
PROTON is responsible for the distribution. PROTON’s current CEO is Dr Li Chunrong
(appointed on September 29, 2017).PROTON Sales and Marketing Vice President Abdul
Rashid Musa.

5.3 Contingency Planning

Difficulties and Risks

 There is is a risk of delay in relocating employees from Shah Alam, Selangor to

Tanjung Malim, Perak. This will potentially delay the plant production target
 There is a risk of not achieving the 109 target of 3S/4S service centers. The

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 conversion from 1S to 3S/4S is very costly for the dealers, which caused some
dealers to close their shops or merge with other dealers. If the target of service center
is not achieved, then there is a risk of unsatisfied customers due not many service
centers to serve them.

Worst-Case Risks

 There is a risk of new regulation due to the newly change of government, which
could influence the directions for Malaysia-China business ventures which might
affect PROTON’s transformation plan and turn-around mission.

6.0 Conclusion

The next three years are crucial for PROTON. It is important for PROTON to keep
following through and be persistent about achieving its mission successfully. With all of
this plan in place, there is a great potential for PROTON to take over the driver seat and
steer itself into becoming a market leader, again.

26
References

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Pearson Prentice Hall

Porter, M. E. (1979). How competitive forces shape strategy. Retrieved May 9, 2018 from
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Kaur, G. (2016). PROTON’s bumpy journey. Retrieved May 9, 2018 from

https://www.thestar.com.my/business/business-news/2016/04/09/PROTONs-bumpy-journ
ey/

Wikipedia. Last edited May 14, 2018. Retrieved May 9, 2018 from
https://en.wikipedia.org/wiki/PROTON_Holdings

Leong, T. (2017). It's official: China's Geely now owns 49.9% of PROTON. Retrieved
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OTON

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Goh, S. (2015). Perodua pushes PROTON to the brink. Retrieved May 9, 2018 from
http://www.kinibiz.com/story/issues/191556/perodua-pushes-PROTON-to-the-brink.html

Zainul, I. F. (2017). Can PROTON do it this time? Retrieved May 9, 2018 from
https://www.thestar.com.my/business/business-news/2017/02/11/can-PROTON-do-it-this
-time/

Kaur, M. (2016). To regain public trust, PROTON needs to solve two issues. Retrieved
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OTON-needs-to-solve-two-issues/

Lye, G. (2017). J.D. Power 2017 Malaysia Customer Service Index – Toyota takes top
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akes-top-spot-improvements-across-the-board/

Augustin, R. (2017). PROTON to focus on customer satisfaction, release new model

every year. Retrieved May 14, 2018 from
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