NURUL IZZATI BINTI MOHAMAD SOPIAN

2020288546
BA243 – MKT420 (NBH2C)
DISCUSSION TOPIC WEEK 7
CHAPTER 9: NEW PRODUCT DEVELOPMENT AND PRODUCT LIFE-CYCLE STRATEGIES

PROTON is the first national car manufacturer in Malaysia. Over 25 years on its development, PROTON
has come out with more than 10 types of cars with different design and categories to satisfying the
nation’s needs, wants, taste and preference towards car.

a) As a product development manager, you are required to design new car for PROTON that will be
targeted to the young generation of Malaysia. The objective is to stimulate youngsters’ interest
to buy national car. Demonstrate the eight stages involved in new product development
strategy. (10 marks)

New product development are the development of original products, modifications, and new
brands through the firm’s own product development efforts. There are eight stages involved in
new product development strategy which are idea generation, idea screening, concept
development and testing, marketing strategy development, business analysis, product
development, test marketing and commercialization.

i. Idea Generation

New product development starts with the generation of ideas that are systematically
looking for new product ideas. Major sources of new product ideas include internal sources and
external sources such as customers, competitors, distributors and suppliers, and others. Internal
sources are the company find new ideas through formal R&D. For example, Proton Persona has
been continuously improving and the latest model has a 1.6 fuel efficient VVT engine, light
weigh, keyless start option and improved break output compared to previous model.

ii. Idea Screening

Screening new product ideas to spot good ones and drop poor ones as soon as possible.
Product development costs rise greatly in later stages, so the company wants to go ahead only
with those product ideas that will turn into profitable products. For example, the X70 was
introduced and is the best-selling C-segment SUV in the country.

iii. Concept Development and Testing

An attractive idea must then be developed into a product concept, which a detailed version
of the new product idea stated in meaningful consumer terms. For example, Engine technology
is increasingly moving with the worldwide demand for high performance yet lower its pollution.
Proton refers to the implementation of the Higher Performance Engine Manufacturing Plan.
NURUL IZZATI BINTI MOHAMAD SOPIAN
2020288546
BA243 – MKT420 (NBH2C)

iv. Marketing strategy development

Designing an initial marketing strategy for a new product based on the product concept. The
marketing strategy statement consists of three parts. The first part describes the target market;
the planned value proposition; and the sales, market-share, and profit goals for the first few
years. For example, Proton cars delivers several models that fit the tastes and desires of
customers. Among the current version, Proton X70, Persona, Iriz, Preve, Exora, Saga and others.
It is directed at the upper middle-class segment for which the car is a fundamental necessity.
The price is between RM40,000 and RM120,000

v. Business Analysis

A review of the sales, costs, and profit projections for a new product to find out whether these
factors satisfy the company’s objectives. For example, Proton cars have been budgeted in a way
that has great technology, but is not over the top. Proton try to attract more customers in the
broad Indian and U.S markets by launch area-specific models to gain a strong demand.

vi. Product Development

Developing the product concept into a physical product to ensure that the product idea can be
turned into a workable market offering. For example, hardware and software fields of Proton
due to technology, new processes and systems were implemented to drive capability and
accuracy improvements. Not only demonstrated by the increased length, but also by the smooth
implementation of the car such as Proton X50.

vii. Test Marketing

The stage of new product development in which the product and its proposed marketing
program are tested in realistic market settings. For example, the Proton X70 is the first vehicle
that PROTON and its partner have jointly produced and is the first luxury SUV develop by the
Malaysian automotive brand and fitted with an intelligent infotainment system that uses voice
commands and conversational English to access various functions, including entertainment,
navigation and mechanical functions.

viii. Commercialization

Introducing a new product into the market. For example, Proton concentrates on the
development of the CKD versions of its X70. As the Xtra Warranty Service Plan will cover the
Proton X70 for up to five years, regardless of mileage, PROTON will be the first national
automotive brand to offer an unlimited mileage warranty to enjoy a quality networking
experience by give free internet data for five years.
NURUL IZZATI BINTI MOHAMAD SOPIAN
2020288546
BA243 – MKT420 (NBH2C)
b) Illustrate how marketing mix strategies can change during the product life cycle (PLC) stages of
newly introduced PROTON Inspira. (10 marks)

Product life cycle (PLC), the course of a product’s sales and profits over its lifetime. The PLC have
five distinct stages:

1. Product development
It is beginning when the company finds and develops a new product idea. During product
development, sales are zero, and the company’s investment costs mount.

2. Introduction
A period of slow sales growth as the product is introduced in the market. Profits are
nonexistent in this stage because of the heavy expenses of product introduction

3. Growth
A period of rapid market acceptance and increasing profits.

4. Maturity
A period of slowdown in sales growth because the product has achieved acceptance by most
potential buyers. Profits level off or decline because of increased marketing outlays to
defend the product against competition.

5. Decline
The period when sales fall off and profits drop.

c) Identify at what stage PROTON Exora now and state their characteristics at this stage.
(5 marks)
NURUL IZZATI BINTI MOHAMAD SOPIAN
2020288546
BA243 – MKT420 (NBH2C)
The stage of PROTON Exora now is growth stage. A period of rapid acceptance and increasing
profits. The PLC stage in which a product’s sales start climbing quickly. Company’s sales and
profits starts increasing and competition also begin to increase. The company focus on brand
preference and gaining market. For example, Proton Exora becomes well recognized at this
stage because of some of the buyers repeat the purchase patterns. Their sales have rapidly
rising sales 109,716 vehicles were sold by the Malaysian national car manufacturer in 2020, and
8.8% rise. The costs are average cost per customer, it raising profits that has undergone a range
of range of updates over the years to keep it fresh and important to the market, customer got
early adopters and competitors growing number.