Managing Strategic Marketing Malaysian company PROTON - Essay Example

? MARKETING MIX of the Please write here of the module: Managing Strategic Marketing of the Please write instructor’s name here Date of submission: Please write date here Word Count: 3566 Table of Contents Contents Page Abstract 1 1. Introduction 2 2. Background of the Company 2 3. Introduction of the Product 3 4. Literature Survey of Marketing Mix 3 5. Marketing Mix of My Company 7 6. Marketing Mix of Competitor 9 7. Suggested Improvements 10 8. Conclusion 10 References 11 Abstract Marketing mix is one of the core components of a marketing plan. This paper describes how PROTON, a car Malaysian car manufacturing company, can improve its marketing mix to evaluate the success of the marketing plan. The paper compares the marketing mix used by PROTON and its top competitor in order to find the areas in which PROTON needs to improve its marketing mix. Based on the comparison, some key improvements are suggested to the company to make it compete effectively with its top competitor. 1. Introduction Before going into the details of the marketing mix, let us get to know what a marketing plan actually is in order to get a better understanding of marketing mix. A marketing plan is a well-designed strategy to advertising a product or to create awareness of a company’s products and services among the customers. A properly designed marketing plan not only includes defining marketing goals and objectives of a company but also includes the strategies and tactics to achieve the marketing goals. Implementing an effective marketing plan and taking steps to monitor the performance of the plan are very important for any manufacturing company. Marketing mix is one of the main tools used by the managers of a company to monitor and control the working of the marketing plan. Marketing mix is one of the core components of a marketing plan. A marketing mix includes proper set of tools and guidelines which a company can use to market its products and services in the market. Managers make use of marketing mix to evaluate the success of the marketing plan of their products. The assessment or evaluation makes the managers know whether the marketing plan is appropriate for the product or it needs to be changed. Being the marketing manager of PROTON, which is a leading car manufacturing company, I will propose improvements in the marketing mix of my company in order to make it compete effectively with the main competitor of the company. 2. Background of the Company The name of the company where I work as marketing manager is PROTON. PROTON is a Malaysian company which was established in 1985 and since then, it has been a valuable part of the Malaysian automotive industry. PROTON deals with manufacturing and distribution of passenger and commercial cars. Some main types of vehicles, which the company manufactures, include commercial cars, family vans, and private cars. In addition to the implementation of ISO 9000 standards of quality, PROTON has also adopted the QS 9000 quality standard, which has also been adopted by many of the famous American car manufacturing companies like General motors and Ford. The company has done alliance with Sauber and Petronas which really help PROTON achieve its goals in the international market. 3. Introduction of the Product The product, which I have been marketing for the last six months, is Cronze Family Van. Cronze van is a new product manufactured by the PROTON car manufacturing company in collaboration with the Lotus automotive company. Cronze is a 7-seater vehicle, which is a very economical car for large families. Some of the most attractive features of this van include beautiful shape, built-in stereo system, powerful engine, high mileage, and capacity to hold a large number of people at a time. Low fuel consumption and high mileage are two of the most incredible features of this van. People like to buy such vans which consume very less amount of fuel and give high mileage. Another attractive feature of this van is that a customer is able to select the design of his/her own choice from the list of 10 beautiful designs. In the first couple of months, the company just managed to sell 3000 vans whereas due to the change in the marketing strategy, demand from the customers increased and the company sold nearly 2000 vans each month. The market share of this van in Malaysia is nearly 7.5 percent, which is a good achievement in a period of just six months. 4. Literature Survey According to Capon (2007, p.185), marketing plays a critical role in development of a product. The Marketing Mix is one of the most important parts of a marketing plan. A marketing plan is incomplete without the incorporation of four basic marketing components which include product, place, price, and promotion. Belohlavek (2008, p. 11) states, “The objective of a marketing mix is to establish the successive and simultaneous actions to influence the consumer’s or user’s purchasing decision”. Proper analysis of all of these components plays a key role in making the marketing plan successful the company. Marketing mix makes a company determine the way the product should be marketed. Varey (2002, p. 127) states, “The marketing mix is seen as a collection of tools to be used to elicit desired responses from target markets”. It also helps the managers know whether the marketing plan that they have implemented for marketing any specific product has been successful in getting the desired results or it needs some improvements or modifications. Managers need to analyze their marketing mix frequently in accordance with the current status of their product in the market. Marketing mix is the key to determine the performance of the marketing plan. Companies tend to develop different marketing plans for each product based on the needs of the customers and the target market. The proportions of the mix components need to be different depending on the types of the products, consumers’ characteristics, and corporate resources (Blythe 2008, p. 50). The primary goal of every marketing manager is to make such decisions regarding product marketing which should integrate the use of 4 P’s in the target market in an appropriate manner. McDaniel and Gates (1998, p. 3) state, “The mix is the unique blend of product, price, promotion, and place (distribution) designed to reach a specific group of consumers.” Companies usually alter the mix components depending on the needs of the public and the market in which the product is placed. “Many firms find it necessary to modify the present marketing mix or develop a new one” (Ball et al. 2008, p. 475). The strategy regarding the components of marketing mix does not remain the same forever; rather they are and should be altered continuously depending on the circumstances. For a high profile brand, companies usually focus more on the promotion component instead of price. Similarly, for a product which is placed in a market where there is much competition regarding that product, the companies focus more on price instead of promotion. McDonald (2007, p. 10) states, “Managing the marketing mix involves the use of the tools and techniques of marketing”. The marketing department of every company primarily focuses on the development of a well-structured marketing plan which should be able to promote the newly manufactured products in the market effectively. The marketing plan includes the marketing mix that a company uses to market its products (Kurtz, MacKenzie & Snow 2009, p. 79). The main reason behind designing and implementing an effective marketing plan encompasses two primary motives. First motive of the plan is to place the product properly in the market where there is need of that product and the second motive is to make the public aware of the product. Moreover, the element of price can never be sidelined in any case. Price really affects the success of a product in the market. People having low income cannot afford to buy expensive products whether they need those products or not. Therefore, a company needs to set reasonable prices for their products in order to make them productive for the company and affordable for the customers. Managers of the companies make use of marketing mix components to determine what steps they need to take to make their marketing plans successful and profitable. Proper analysis of all components of the marketing mix is the key behind successful implementation of a marketing plan. Papantoniou (1992, p. 127) states, “Ultimate purpose of the mix is to maintain and improve positions in the market”. Marketing mix is a powerful force that drives a company towards achievement of desired goals and objectives regarding marketing of any specific product or service. Marketing mix covers the four main components of an effective marketing plan, which are price, product, place, and promotion. A company can look at each of the components to know whether the analyses regarding all components are correct or strategy regarding any of the components need to be changed. Kotler (2003, p. 108) states, “Marketing mix describes the set of tools that management can use to influence sales”. For any company, whether product-oriented or service-oriented, the main mission is to get competitive advantage in the market and that mission can only be achieved through achieving high graph of sales. Assessment of the four components of the marketing mix is of extreme value for the development of a good marketing plan. Price, place, product, and promotion are such components of the marketing mix which determine the success of a marketing plan. Price of the product or service plays a very critical role in ensuring success of a marketing plan. Various pricing strategies can be used to set the price of a product, such as, competitive pricing, cost plus pricing, and value pricing. Successful marketing mixes should be designed carefully in order to satisfy the needs of the target markets (Lamb, Hair & McDaniel 2009, p. 46). That is the reason why managers usually set such prices for the products which the customers located in the target market can afford. Some other important factors which managers consider while setting price component of the marketing mix include pricing response of the competitors and the profit margins. Haines (2009, p. 173) states, “A marketing mix strategy should also focus on the customers within those segments who have enough purchasing power to be profitable to the business”. Therefore, managers also need to target those markets which are able to generate high profits for the company. Along with price, placement of a product also plays a vital role in ensuring success of a product in the market. Marketers make appropriate placement decisions in order to make the customers reach their desired products. Selecting the best way to reach the customers is the core activity related to product placement. The decision to place a product in the market largely depends on the channels of distribution used by a company. Many important factors need to be considered when a company plans to make decision regarding product placement. Such factors include channel member selection, suitability of the market, market coverage, and transactional and facilitating functions of the distribution system. Some other factors regarding product placement that marketers consider while developing the marketing plan for a product include awareness of the customers regarding product placement, presenting the product as a down-market or an up-market product, assess to the most appropriate distribution channels, use of a sales force to sell the product, online selling of the product, and competitors’ product placement strategy. Every component of the marketing mix holds great value in the success of a marketing plan. About product, researchers say that it is the major component due to which the need of other components arises. Stevens and Loudon (2006, p. 164) state, “Planning the marketing mix begins with the product or service to be offered”. Product is anything which a company manufactures and places in the market for sale. “Generally, a separate marketing mix is crafted for each product offering” (Talloo 2007, p. 145). A product can be a physical product or a service that a company offers to the customers. A company must make its products different from the products manufactured by its competitors. If in case, the products manufactured by a company and its competitors are same in quality, price, and benefits, then the company must make the product different by adding some unique features, design, and warranty in the products. There must be something unique in the product in order to make it attractive for the customers. The design of a new product must be new to the customers in order to make customers buy the product. A product can bring success to its manufacturing company only if it provides customers with product satisfaction. Haberer (2008, p. 1) states, “The central role of marketing is value delivery and customer satisfaction”. Customers can only be satisfied with a product if it provides them with quality, reliability, and excellence. Therefore, a company must consider these factors while developing a new product in order to make the product a source of revenue for the company. Promotion is one of the core components of the marketing mix. It refers to the activities related to the marketing of a product. The focus of product promotion is to affect the customer behavior in such a way that the customer agrees on buying the company’s product. Wenderoth (2007, p. 4) states that organizations use several instruments to influence the customers’ buying behavior. Some of the ways to influence customers include coupons and discounts which companies offer to the customers when they buy a product. However, frequent price deals create low brand equity (Yoo, Donthu & Lee 2000). Some of the main factors which marketers need to consider while promoting a product include mode of advertising, media types, and public relations. Clow (2007, p. 484) asserts, “Evaluation or testing of advertising communications can occur at any stage of the development process”. Companies use various methods to evaluate the success of the advertisements, such as, emotional reaction tests, concept testing, and persuasion analysis. Public relations also play a key role in product promotion. Public relations mostly depend on the personality of a salesperson. Another component of promotion is advertisement which takes many forms, such as, television, internet, radio, and newspapers. According to Keillor (2007, p. 6), internet is a good way to do direct international marketing Marketers need to analyze the reach and frequency of different modes of advertisement in order to select the most suitable forms for promotion of the products. 5. Marketing Mix of my Company In this part of the paper, I will discuss the marketing mix adopted by my company for the marketing of Cronze van. PROTON has implemented a well-structured marketing plan for its new product. Being the marketing manager of the company, I have properly analyzed all aspects of the marketing mix before developing the marketing plan for the van. 5.1 Product The product for which I have employed the marketing mix is Cronze Family Van. Cronze van is a new product manufactured by the company. It is a 7-seater vehicle designed for large families. It is a great van for the people who want to buy a big car for their families. Moreover, the design and space of the van is such that 6 to 7 people can sit easily in it which is a very good feature of this van. Some of the most incredible features of Cronze van include low fuel consumption, high mileage, and the capacity to hold a large number of people at a time. The 1300cc Cronze van is doing a good business in the market of Malaysia generating reasonable amounts of revenue for the company. 5.2 Price The company has set the price of the van in accordance with the prices of other similar type of vehicles manufactured by other companies. Middle class families can buy this car easily. The current list price of the van is RM 110,600 which is somewhat high as compared to other vans in Malaysia. The prices of other vans manufactured by other companies of Malaysia usually range from RM 90,000 to RM 105,000. 5.3 Place For now, our company has introduced the van only in Malaysia. The reason for not taking the decision to export this van is that this van is very new to be introduced in the international markets. All other cars manufactured by the company are being exported to more than 50 countries, such as, Australia, United Kingdom, and Singapore. I have planned to take steps to export the van once the company achieves a high level of revenue and creates a good image in the minds of international customers. At present, the van is available in the showrooms located in the major cities of Malaysia. 5.4 Promotion Dahl (2007, p. 23) states, “By identifying your primary target market, you can do a better job of narrowing your media buys”. For Cronze van, my company has designed the advertising plan, which markets it considering the geographical location of the customers because geographical location based advertising provides success to a company. The company has not targeted a small group of individuals; rather the target market includes large groups who have similar demands and can manage to buy this van. The company has decided to use some of the most valuable forms of advertising, such as, internet marketing, print advertising, outdoor advertising, and covert advertising to create awareness among the customers about the van. Internet marketing helps the company market the product in whole Malaysia. Almost every individual uses internet these days in Malaysia which is the main reason for PROTON to do internet marketing. Covert advertising such as advertising in movies and dramas, print media, and use of outdoor media such as billboards are also proving beneficial for advertising of the Cronze van. 6. Marketing Mix of Perodua – A Competing Company Perodua automobile company of Malaysia is one of the largest automobile companies next to PROTON. There exists a good competition between the two companies. Perodua usually manufactures small cars in coordination with Daihatsu Motors. Let us now describe how Perodua employs the marketing mix for the marketing of its products. 6.1 Product Perodua has been manufacturing cars since 1994. Some of the most famous cars manufactured by the company include Kancil, Rusa, Kenari, MyVi, and Alza. MyVi is the biggest success of the company as it has been successful in generating high revenues for the company since its introduction in the national and international markets. Rusa is the car which really matches the Cronze van in body shape, features, and seating capacity. The engine of Rusa is 1600cc which is more powerful as compared to the engine of Cronze van. 6.2 Price The price of this car is RM 49,915 which is very less as compared to the Cronze van. 6.3 Place Perodua exports its cars to a large number of countries. Some of the main countries where Perodua has found its target market include United Kingdom, Qatar, Singapore, and Saudi Arabia. Perodua has been made easily available in all cities of Malaysia which is the reason why the market share of its cars, such as, Rusa and MyVi has been big as compared to the market share of PROTON. 6.4 Promotion Perodua makes great use of all advertising forms to promote its products nationally and internationally. The company also offers lease to its customers which is a great attraction and facility for the customers. Other offers like one year maintenance by the company and 50,000 kilometer warranty have also played a key role in increasing the sales of Perodua cars in Malaysia. 7. Suggested Improvements for PROTON Based on the comparison between PROTON and Perodua, I believe that my company needs some improvements in the marketing mix. The suggestions and action plans are as follows: The company needs to develop more powerful engines in order to attract customers towards the company. The company should do alliance with TOYOTA or HONDA companies for the development of powerful engines. Price of Cronze van is also somewhat higher than its competitors which is also a reason why it is not generating expected sales for the company. The company needs to cut down the prices in order to increase sales. The company also needs to make some changes in the placement component of the marketing mix. First, the company needs to make the van available in the international markets to increase the customer base. Secondly, the company should make the van available in the showrooms located in all cities of Malaysia instead of placing it in just a few showrooms. The company should first make the van available in all cities of Malaysia and once the sales increase; the company should introduce the van in the international markets. The company should also improve its promotional activities. The company should offer leasing system and warranty to the customers in order to attract more customers. Warranty should be of 75,000 kilometers whereas the maintenance provided by the company should be of one and a half years in which one year should be free for the customers whereas the remaining six months maintenance should be done at 50 percent charges. 8. Conclusion Summing it up, marketing mix is one of the core components of a marketing plan. 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