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This report critically examines the marketing planning process and proceeds to analyse the internal and external marketing environment for Proton Cars, including a PESTEL and SWOT analysis. Following this analysis, various competitor positions are examined and recommendations are made as to how Proton might gain competitive advantage for its new Plug-in Hybrid Vehicle. Protons vision, mission, and marketing objectives are defined, and market segmentation and targeting for the new product are examined, and recommendations are made. The main body of the report focuses on the delivery and communication of customer value through marketing mix strategies. The importance of the consistent delivery of brand and product messages at all stakeholder touch points is emphasised. Recommendations are made for the product specification, pricing and distribution strategy as well as for promotional tools and messages. In addition, the importance of building brand equity is examined and recommendations are made about the positioning of the Proton PHEV product and the Proton brand.
5.0 Marketing Objectives 6.0 Market Segmentation, Targeting, and Positioning 6.1 Market Segmentation 6.2 Targeting 6.3 Positioning 7.0 Marketing Strategies Communicating and Delivering Value 7.1 Competitive Advantage 7.2 Customer Value 7.3 Branding 7.4 Product Strategy 7.5 Pricing Strategy 7.6 Distribution Strategy 7.7 Promotional Strategy 7.7.1 Promotional Tools 7.7.2 Promotional Messages 8.0 Marketing Implementation, Management, and Control 9.0 Marketing Metrics 10.0 Conclusion 5 5 6-8 6 6-7
6 7 7-8 8 9 9-10 9 9-10 10 10-14 10-11 11 11 12 13 13 13-14 13-14 14 15-16 16-17 17 Bibliography
18-19
List of Figures
Figure 1: The Marketing Planning Process Figure 2: Porters Generic Strategies Figure 3: Fills 4Cs Model Figure 4: The Primary Functions of the Marketing Manager 5 10 14 16
The worldwide economic downturn and rising fuel prices are forcing consumers to reduce their motoring costs.
Social and Cultural Consumers are now increasingly well informed about the major global environmental issues and actively consider the green credentials of the products they buy (Cowe and Williams, 2002, p.7). Technological Technological progress is being made in the production of batteries, which are essential for the efficient powering of PHEVs (Kalhammer et al., 2007). Environmental Fossil fuels are a major contributor to carbon emissions and there is a growing demand to reduce carbon emissions for vehicles using alternative and greener energy sources (Carbon Trust, 2010). Legal Vehicle carbon emissions are monitored and controlled by law in a number of countries including the UK.
3.2 The Micro Market Environment 3.2.1 The Global Market for PHEVs
According to a study by Pike Research (2010), the global market for PHEVs is forecast to be dominated by the USA with approximately 640,000 vehicles expected to be in use there by 2015.
The USA will be closely followed by China with 560,000 vehicles. The global sales of PHEVs are expected to reach 1.7 million by 2015.
Brand Reputation
Domestic and international awards for its car models.
Distribution.
Domestic market share of 28% (Trafficmagonline.com, 2010) Strong presence in China through joint venture with Youngman Automobile Group.
Human Resources
Nearly 12,000 personnel.
Financial Resources
Cash and cash equivalents recorded an increase of 79%, in 2010 to RM1.6 billion
Core Competencies
High production costs make its cars relatively more expensive than many other makes (Netto, 2005). Cars are not suitable for US market, as they do not meet required safety or environmental standards.
Brand Reputation
Has historically suffered from quality and reliability issues some of which remain (Netto, 2005).
Distribution
Only exported 13,863 cars in 2009 - about 5.8% of total production (Chrysler, 2010).
Financial Resources
Spends a significant amount on research and development and royalties to Mitsubishi for the use of its engine. (Chee, 2003).
Regulatory changes
Global governmental and legal pressures are working in favour of the PHEV market.
Distribution
Strong in China, which has been identified as the second most important market for PHEVs.
Market trends
Consumers are reluctant to buy PHEVs until the technology is proven (Ernst and Young, 2010).
Economic Situation.
High entry cost for PHEV ownership.
Distribution
The Malaysian domestic car market is saturated (Starkie, 2005). Note: All data sourced from Proton Annual Report, 2010 unless otherwise stated.
6.2 Targeting
In view of the findings from the Marketing Audit and with reference to the study by Ernst and Young (2010), it is proposed that the target audience for the Proton PHEV be defined thus: Socio- demographics: Existing car owners and those who expect to purchase a car within the next three years; middle to high-income earners; located globally but with a strong bias towards China. Psychographics: City dwellers who drive less than fifty miles per day on average. Behavioural factors: Motorists who are primarily interested in saving money on fuel and are not necessarily concerned about environmental factors.
6.3 Positioning
Positioning a brand is an attempt by a business to influence consumer perception and behaviour (Perreault and McCarthy, 1999). For example, in the case of the Proton PHEV, the brand could position itself to appeal to its consumer segment by promoting its cost saving benefits. However, brand positioning should go beyond simply reinforcing a brands current position in the marketplace by disseminating messages about the emotional position it wants to adopt. In other words, how does the brands position make the targeted consumer think and feel and will this influence the way that the target consumer segment behaves?
7.3 Branding
To build its brand equity, Proton needs to engage with its customers, and potential customers, at all touch points for all stakeholders. These touch points include all formalised internal communication activity, such as employees magazines and intranets, all external promotional activity, such as advertising and direct marketing, customer call centres and helplines, and contacts with the supply chain. The stakeholders interaction with such touch points provides Proton with an opportunity to influence the perception of the brand in terms of whether it meets expectations or not across a range of dimensions, for example, providing an opportunity to grow the business for financial stakeholders, and delivering value for end consumers. In addition, it is vital that there is an integrated and consistent delivery of brand messages across all touch points (Doyle, 1998). Equally, however, branding messages for a global market challenger, such as Proton, must be of relevance and appeal to local markets. This ability to think globally but act locally can help to reinforce Protons competitive advantage strategy (Taylor, 1991).
In view of its proposed market position as a market challenger gaining competitive advantage through a narrow scope, differentiation focus, the Proton PHEV needs to meet the following specification: Features: Such as the ease of access and use of the charger. Customisation: Chinese market tastes and preferences generally require, for example, a more formal vehicle interior than for say the US market (Bloomberg Business Week, 2010). Performance: Manoeuvrability in small spaces. Adequate acceleration for city use. Conformance: Must conform to local regulatory controls over vehicle emissions and safety standards. Durability: Resilient enough to cope with heavy usage in high population density centres. Reliability: Highly reliable with guaranteed driving distances of 50 miles on a single battery charge. Repairability: Ease of repair is important in all car market segments but especially so for new car technologies as this provides the purchaser with reassurance. Style: In view of the expected relatively high price of the PHEV, styling will be important so Protons decision to use Italdesign Giugiaro makes sound business sense. In terms of pre and post purchase customer service then the following are important: Ordering ease: The vehicle needs to be easy to order from local dealers. Delivery: Guaranteed delivery times of no more than four weeks from ordering. Customer induction training: In view of the new technology present in the car, customers need extended training such as how to charge the battery. Customer consulting: Customers need reassurance messages pre and post purchase. Maintenance and repair: An extensive network of dedicated servicing facilities with fully trained technicians. Returns: Due to the advanced technical nature of the product, there are certain to be returns and these must be managed effectively to avoid customer dissatisfaction and promote customer goodwill and advocacy, which is vital in this new marketplace.
Even though the recommendation is to compete on differentiation, the pricing strategy, although not market leading, still needs to be competitive for a new product like the PHEV, where there will be considerable competition from more established brands. Proton needs to carry out a full evaluation of its pricing strategy including establishing the margins it wants to achieve based on expected demand and its market share objectives. In addition, of course, Proton needs to monitor competitor prices and position its pricing strategy accordingly i.e. not the lowest in the market but a price that challenges the market leader.
According to independent research, the major purchase motivation for PHEVs is economic in terms of the fuel savings that can be realised. Reassurance about battery driving range, access to charging stations and vehicle price are also significant factors in the purchase decision (Ernst and Young, 2010).
Planning
Develop
Implementation
Carry out the Plans
Figure 4: The Primary Functions of the Marketing Manager 9.0 Marketing Metrics
Historically the measurement of the effectiveness of marketing activities has been a contentious and difficult process but it is increasingly recognised as an essential requirement for assessing the return on investment for any new product (Clancy and Stone, 2005). In this respect, the socalled balanced scorecard and the measurement of customer equity are important and relatively recent innovations that Proton needs to consider as part of its PHEV project plan.
As a starting point, marketing performance needs to be measured against the marketing objectives. A qualitative tacking study of stakeholder attitudes to both the Proton brand and the PHEV needs to be established in advance of the implementation of the marketing plan. This will assist in assessing likely changes in future market share (Kotler, 2001). Following this, a post launch evaluation needs to carried out with actual volume sales used to calculate actual market share. Quantitative measures of financial performance, in terms of return on investment, also need to be analysed in the short and longer term. All of these measurements need to be further analysed in causal and relative terms and fed back into the ongoing marketing planning process.
10.0 Conclusion
The successful launch of the Proton PHEV is dependant upon the effective management of the marketing plan and the adoption of the key strategic recommendations in the plan as follows: Ongoing market research through the regular updating of data in the marketing audit. The creation of customer value through the development of value propositions. A distribution focus on the Chinese market. The communication of customer value propositions using appropriate tools and messages.