BBM 209: Marketing

Management
INDIVIDUAL ASSIGNMENT
CHAPTER 9: CREATING BRAND
EQUITY (BRANDZ)
5 SEQUENTIAL STEPS OF PROTON
(WEEK 5)
NAME: NAZREEN BIN MUHAMAD (133011859)
LECTURER: MR V.ASOKAN
DATE: 30 April 2015

Five sequential steps in BRANDZ model

Presence
o Active familiarity based on past trial, saliency, or knowledge of

brand promise
Relevance
o Relevance to consumers needs, in the right price or in the

consideration set
Performance
o Belief that it delivers acceptable product performance and is on

the consumers short list

Advantage
o Belief that the brand has an emotional or rational advantage

over other brands in the category

Bonding
o Rational and emotional attachments to the brand to the
exclusion of most other brands

Proton in BRANDZ

Proton Holdings Berhad (stylised PROTON) is a Malaysian automobile

manufacturer. It is headquartered in Shah Alam, Selangor and operates an
additional manufacturing plant in Tanjung Malim, Perak. The company was
established in 1983 as the sole national car company until the advent of
Perodua in 1993. Proton is a Malay acronym for Perusahaan Otomobil
Nasional Sendirian Berhad. (National Automobile Company Private Limited).
Proton was largely a manufacturer of badge engineered vehicles from
Mitsubishi Motors between 1985 and the early 2000s. The company has
since produced several indigenously designed models and operates in at
least 26 countries today, the majority of which are in Asia. Proton was
formerly owned by Khazanah Nasional, the investment holding arm of the
government of Malaysia. In January 2012, it was taken over by DRB-HICOM, a
Malaysian conglomerate in a transaction amounting RM1.2 billion.
Proton, predominantly reliant on its domestic market is currently
undergoing structural and internal changes, as evident in the appointment of
a new owner, a new partner, and a new chairman, and in the launch of
various new and upcoming models in an effort to gain an international
presence and increase profitability.

Presence
Proton was founded in 1983 by Malaysias 4 th Prime Minister Tun Dr
Mahathir Mohamad and the company was initially wholly owned by the
government of Malaysia through Khazanah Nasional and was leaded by
himself. The first car that hit the country in 1983 was Proton Saga, the first
national car was ever created in Malaysia collaborate with Mitsubishi Motors
at that time. Sales of the new Saga outstripped supply and Proton struggled
to meet the growing demand, but by mid-1986 it had captured a 64%
majority domestic market share in the below 1600cc segment.
Relevance
History of Proton has showed that the company grew at the stable
sales in the year of 90s but plunged in 1998 due to the 1997 Asian Financial
crisis. Protons revenue and profits were severely affected, but a majority
market share was still maintained into the early 2000s. The mid-2000s
witnessed a sharp decline in Proton's revenues and sales. This happen
because of their new product, Proton Waja does not meet the consumer need
and requirements. Higher price offered by Proton on that variance making
people feel too pricy and the quality of that car reported to be the lowest
quality in term of their engine and other lack of interior functions like power
windows technical fault and so on. In 2006, Proton's market share was 32%,
down from 40% in 2005. Proton lost its majority domestic market share for

the first time in 20 years to Perodua, the second Malaysian automobile

manufacturer. Factors which contributed to the fall of Proton included the
revision of the National Automotive Policy (NAP), Proton's newer indigenously
designed models (i.e. the Proton Waja, Gen-2 and Savvy) which were poorly
designed and manufactured compared to the former Mitsubishi-based
Protons and stronger competitors, specifically Perodua with their best-selling
Myvi which launched in 2005. Both Proton's total sales volume and market
share failed to recover to its pre-2002 figures and Perodua remained the
domestic market leader from 2006 onwards.
Performance
Sales of Proton cars grew at a stable rate in the latter half of the 2000s
and in the early 2010s. The company briefly regained the top-spot from
Perodua in June 2009, after the introduction of the Proton Exora MPV. Proton
also matched Perodua's market share in the first quarter of 2011. Factors
which contributed to the rise of Proton were well-designed cars which
catered to the needs of the domestic market (i.e. the Proton Persona, second
generation Saga and Exora) in addition to better management of the
company under the then managing director, Syed Zainal Abidin. However,
despite the improvements made between 2007 and 2012 in addition to
improved overall sales, Proton's Malaysian market share continued to
decrease. In 2011, the company had a 26.4% (158,657 units) share which
plummeted further to 22.5% (141,121 units) in 2012. In comparison, Perodua

retained a majority market share of 30.1% (189,137 units) in 2012, with

Toyota maintaining its third place at a 16.8% share with 105,151 units sold.
Proton's decline in market share has stabilized as of 2013. In the firsthalf of last year, Proton sold 64,782 cars, representing 20.7% of the market
share, a decline of 1.8% over its full-year 2012 share. However, by the end of
2013, Proton had managed to raise its market share to 21.2% with a total of
138,753 units sold. Nonetheless, Proton's market share has still declined by
an overall 1.3% between 2012 and 2013. In July 2013, Proton sold around
16,600 cars, which accounted for 25% in market share during that specific
month, the company's highest ever in 2013. Perodua on the other hand sold
around 19,200 or 2,600 more cars than Proton in July 2013. The rise in
Proton's sales were attributed to the launch of the Proton Saga SV, a cheaper
variant of the second best-selling car in Malaysia to meet the consumer
expectation in term of the price and the performance of the car.
Advantage
The entry of Danish vehicle tuner Kleeman could provide a boost for
the premium vehicle segment. Proton's export plans could help to offset its
declining domestic influence and improve its global performance. Faced with
declining domestic sales and uncertainty regarding a strategic partnership,
Malaysia's Proton has set its sights overseas. The company is evaluating a
plan to build a production plant in Egypt, which would act as a gateway to
Africa and West Asia and boost the carmaker's exports. Proton already sells

its Gen. 2 and Savvy models in African markets, such as Egypt and South
Africa, confirming that a market for the company's models already exists.
According to Proton Managing Director Syed Zainal Abidin Syed Mohamed
Tahir, Egypt provides a large market but could also act as a base to countries
such as Saudi Arabia and Sudan.
The new Proton Exora is the ninth addition to Proton's range of cars
and among the current model variances, the most saleable are the Proton
Saga and Proton Persona, given the quality and price of the new Proton
Exora, Proton is confident it would be well received and increase Proton's
average car sales of the year by at least 30 per cent by the end of the year
2010. Talks with Indian distributors are underway but no concrete
arrangements have been made. Elsewhere in Asia, Proton has also appointed
a Thai distributor. Phranakorn Auto Sales will initially sell Proton models in 20
dealerships, with the network due to double within four years.
Bonding
Since the Perodua Company has been founded in 1993, Proton has
been working so hard on developing the better car yet they keep on falling
down when the main car from Perodua, Myvi have been launched since 2005
to the current. Major increase in sales through Myvi has been seen a big
impact on Proton as Myvi was the killing product in that period of time.
However, despite of the drop on sale in that period of time, they manage to
come back with their new product, Persona, Proton first MPV Exora and the

new Saga to help them keep stabilize the company. Major change has been
seen when Malaysian started to purchase the new Saga, 16,600 cars have
been sold, putting them in number 2 than Perodua Myvi that were sold in
19,200 unit leaving the difference of 2,600 cars. It was the good increase
despite of being drop down for so long. Proton produce Saga Super Value
that give their consumers lower price but keep the performance of the car
intact with the original Saga before hoping that it will keep the sale up.
The new technology make Proton dare to go far as they have develop
their own engine and gearbox. CamPro and the CVT gear transmission have
been installed in their cars. Proton Satria Neo is the one of their best quality
car since 2006. Many improvement have been done on that car. In 2013,
Proton Preve has been launched with the CamPro engine and CVT
transmission, follow the new Proton Suprima that was installed the only first
Turbo engine in history of Proton in mid-2014. The latest one is Proton Iriz,
the new hatchback unit that Proton want to compete with their arch enemy
Perodua Myvi. New technology has bring Proton to develop better, and
different car. They are ready to try something new to improve their product
quality.