perodua marketing assignt1

Course Description: BUMKT 5901: Marketing

1.0 INTRODUCTION

This report will be discussing about Perodua Myvi in Malaysia and Emphasis will be on two

market segments of Perodua Myvi, and evaluation of the marketing mix (product, price, place,

promotion), which will analyze what strategies Perodua is going to use to match the two targeted

segments. And thus, a SWOT analysis of Perodua Alza will be discussed and recommendation

will be provided for the weaknesses it has. The first targeted market segment in Malaysia which

is Business to Consumers.

2.0 OVERVIEW OF PERODUA BERHAD

Perodua Sdn Bhd established in 1993, Perodua began its journey as the second national car

company to serve the nation’s need for an affordable and industry leading quality compact car.

From the ever popular Perodua Kancil introduced to the Malaysian market in August 1994,

Perodua has developed into a strong and dynamic group with a comprehensive range of vehicles

renowned for its quality and unsurpassed reliability. Besides manufacturing cars, Perodua also

produce engine component parts for both local and international carmakers, which helps build

the automotive industry in Malaysia. Our vendor development program helps over 100 local

parts suppliers improve component quality, cost and delivery.

To date, Perodua has 41 branches and 139 sales dealers nationwide to serve its customers

efficiently. It also has 46 service branches and 124 service dealers’ outlets throughout Malaysia

for customer’s convenience. Perodua vehicles are also sold in other countries such as United

Kingdom, Singapore, Brunei, Fiji, Nepal and Sri Lanka. Save for the sales and service

operations, which exist in all states nationwide, PERODUA operates from its headquarters in

Sungai Choh, Rawang, and Selangor. However, Perodua strive to place people first in everything

it does. Perodua’s brand statement building Cars, People first stresses the importance of tailoring

the product and services to individual lifestyles. It also highlights the role the company plays in

empowering the employees and partners through industry leading training and skill transfers.

Our successes are due in great part to the fantastic team at Perodua, who are passionate about the

Company and the work they do. After 17 years and over 1.5 million cars sold, Perodua has over

Summer Semester, 2012-Stamford College, Malaysia


10,000 people who build cars to move Malaysia. And you can be a part of our team helping build

cars that inspire a passion to drive (Perodua, 2013).

Table 1: Perodua Corporate Information

Vision statement To be the most preferred automotive brand renowned for products and services of excellent quality which contributes to the development of the nation

Mission statement Professionalism in all our operations Efficiency in utilizing technologies and available resources Resilience in meeting our challenges Optimization of customer satisfaction and benefit to stakeholders Dedication towards social responsibility to the community, the

environment and development of competent workforce Uniqueness in our products Aspiration to glorify the name of Perodua

Objectives To introduce an economical and fuel savers cars To maximize the safety aspect of Perodua To have a knowledge of technological and industrial ability

within automobile industries. To developed automobile industries preparation and

manufacturing industries. To strengthen the manufacturer competitive of Perodua industry. Aims at profitability and quality service delivered.

Goals Keeping production on track, help to improve the productivity of the manufacturing operation.

To develop work force, example recruiting hiring and training. Having competent and qualified employees with basic automobile

skills and knowledge. Conducting special youth hiring program security and trained in

house.Purpose of business The purpose of a business is to create a customer

Generate return on investment to shareholders Key success factors Building and maintaining an exclusive relationship with our

suppliers on a daily basis Recruit and train staff, friendly and dedicated to serve customers

in mind



Chart 1: Perodua Shareholders

Approximately Perodua has a workforce of over 10, 000 people nationwide. These employees

can make a production capacity to produce 350, 000 units in a year, on a two shift cycle. The

company has 180 sales and 170 services vendors across the all over nation. Perodua exports its

product to 7 overseas destination including United Kingdom, Nepal, Singapore, Mauritius among

others (Perodua, 2013).



3.0 MARKETING MIX

The term “Marketing mix” has become popularized after Neil H. Borden publishes his article in

1964 called “The concept of the Marketing Mix”. Borden starts using the term in his teaching in

the late 1940’s after James Cullution had described the marketing manager as a “Mixer of

Ingredients”. The ingredients in Borden’s marketing mix included marketing planning, pricing,

branding, distribution channels, personal selling, advertising, promotions, packaging, display,

servicing, physical handling and fact finding and analysis. E. Jerome McCarthy later grouped

these ingredients into four categories that today are known as the 4P’s of marketing shown

below:

Figure 1: The marketing mix (4P’s of marketing)

The 4P’s are the parameters that the marketing manager can control, subject to the internal and

external constraints of the marketing environment. The goal is to make decision that centres the

4P’s on the customers in the target market in order to create perceived value and generate a

positive response.


Target Market

Product Price

Place Promotion


3.1 PRODUCT/SERVICE

The importance of product/service is a very vital element in marketing mix because without the

product or service, then promotion, price and place becomes obsolete. According to Kotler &

Armstrong (2010) states that Product/service means the goods and service combination the

company provide to the target market. Perodua Myvi produced by Perodua designed at young

families. The name is derived from the Spanish verb “alzar”, which means "to rise". The name

came from an internal competition held amongst Perodua's staff during the car's development

phase.

However, most Malaysians view the Alza as a "Myvi on steroids". Since its selling price is

almost alike to the Proton Exora's, contrasts between the two cars have been drawn in the Alza's

low esteem. It has been noted that the Alza lacks the advanced features of the Exora, such as

the Body Control Module (BCM) which allows automatic activation of certain car functions.

Alza is the best selling MPV in Malaysia for 2010 by total sales of nearly 42,000 units,

beating Proton Exora by a margin of 15,000 units. The average number of Alza sales per month

is around 2,800 units as Malaysian mostly believes on Perodua reputation on this Perodua's

badge compact MPV compared to home grown Proton's own Exora

(http://www.perodua.com.my, 2012).

Furthermore, Perodua Alza is in its growth stage in the Product life cycle. Perodua has a wide

range of product in Malaysia of which are four segments passenger, four wheel drives. Perodua

Alza falls in the four segments with the lowest possible emission. Alza been a hybrid car, which

make use of fossil fuel, is known to give a whooping mileage of 100kilometers in 4.4 litters of

fuel. Shaw & Onkvisit (2008) states that customer services are serious in mature markets in

which it is difficult to attract new customers. Green (2008) also suggested that the links from

service quality to customer satisfaction to customer retention to profitability.


http://www.perodua.com.my/

http://en.wikipedia.org/wiki/Proton_(carmaker)

http://en.wikipedia.org/wiki/Proton_Exora

http://en.wikipedia.org/wiki/Body_Control_Module

http://en.wikipedia.org/wiki/Proton_Exora

http://en.wikipedia.org/wiki/Perodua_Myvi

http://en.wikipedia.org/wiki/Spanish_language

http://en.wikipedia.org/wiki/Perodua


Figure 2: Interior and exterior measurements of Perodua Alza car model

Table 2: List of Perodua Car Models

NO. Car Model Year

1. Perodua Kancil (Perodua Nippa) 1994 – 2009

2. Perodua Rusa 1996 – 1998

3. Perodua Kembara 1998 – 2008

4. Perodua Kenari 2000 – 2008

5. Perodua Kelisa 2001 – 2007

6. Perodua MyVi 2005 – present

7. Perodua Viva 2007 – present

8. Perodua Nautica 2008 – 2010

9. Perodua Alza 2009 – present


http://en.wikipedia.org/wiki/Perodua_Alza

http://en.wikipedia.org/wiki/Daihatsu_Terios#Second_generation

http://en.wikipedia.org/wiki/Perodua_MyVi

http://en.wikipedia.org/wiki/Perodua_Kelisa

http://en.wikipedia.org/wiki/Perodua_Kenari

http://en.wikipedia.org/wiki/Perodua_Kembara

http://en.wikipedia.org/wiki/Perodua_Rusa

http://en.wikipedia.org/wiki/Perodua_Nippa

http://en.wikipedia.org/wiki/Perodua_Kancil


Table 3: Specifications of Perodua Alza

5MT 4AT

Engine

Engine Type 3SZ-VE

Valve mechanism DOHC, 16V(4 valves per cylinder) with DVVT

Total displacement 1495cc

Bore/Stroke 72.0 mm × 91.8 mm (2.83 in × 3.61 in)

Compression ratio 10

Max. power output 76 kW (104PS) @6000rpm

Max. torque 136Nm (13.9 kg.m) @4400rpm

Fuel system EFI

Fuel tank capacity 42 liters

Dimensions & Weight

Overall length/ width/ height (mm) 4205 x 1695 x 1620

Interior length/ width/ height (mm) 2540 x 1415 x 1310

Wheelbase (mm) 2750

Kerb weight (kg) 1120/1130 1140/1150

Seating capacity 5+2

Source: Perodua Alza official website

Figure 3: How each of the 4P’s can add value to a product

Source: adapted from Armstrong and Kotler (2008). Marketing: An introduction (9th ed)


Price

Creating value

Product

Service

Brand

Price

Incentives

Promotion

Communicating value

Place

Creating value

Communication Distribution

http://en.wikipedia.org/wiki/Fuel_injection


3.2 PROMOTION

Customers have to be made aware of the product. The two main considerations are target market

and cost. A new business will not be able to afford to advertise on national television, for

instance and would not wish to because its market will be local to start with. Leaflets, billboards,

advertisements in local newspapers, Yellow Pages and ‘word of mouth’ would be more

appropriate. Kohli & Jaworski (1990) states that promotion includes all of the activities

marketers undertake to inform consumers about their products and to encourage potential

customers to purchase these products. The product is still in the introduction stage in the product

life cycle. There are two factors that determine customers purchase power which are:

3.1.1 Public Relation: Perodua promotes its brand (Alza) by public media such as popular

Malaysian magazines, newspapers and press release to market its brand. The company

uses public relation in this stage of production because it is at low cost as a result it

educates buyers with the necessary information about its product (Perodua Alza).

3.1.2. Personal Selling: The company make uses of “ Word of Mouth” by trained dealers in

Malaysia who have well knowledge on how the car operates also at this stage monetary

incentives to buy is the most effective way adopted by the company to trigger the

purchase of Perodua Alza.

3.3 PRICE

Price is the amount the consumer must exchange to receive the offering. The price must be high

enough to cover costs and make a profit but low enough to attract customers (Kohli & Jaworski,

1990). The higher the price paid, the higher is the opportunity costs. The opportunity costs stand

for the sacrifice that the customers put in to enjoy the products/services. Due of the intangible

nature of the service, price becomes essential quality indicator in situations where other

information is not obtainable (Duerr & Albuam, 2008). Perodua adopts a price skimming system

to recover cost of development in producing the product, as it is the one of the automobile

Company in Malaysia with the highest sales of Hybrid cars. Non-Hybrid cars are not much

costly compared to hybrid cars.



Table 4: Price Comparison

Name of car model Price for a car Country situatedProton Exora RM79,500.00 Malaysia

Perodua Alza RM65,000 Malaysia

3.4 PLACE

Place includes company activities that make the product available to target consumers and the

business must have a location that it can afford, and that is convenient and suitable for customers

and any supplier (Kotler & Armstrong, 2010). Perodua is known for its “Just-In-Time”

production system, which create value to its product. For product industry like Perodua, place

will constitute a lot in terms of infrastructure, availability and also distributive channel.

Production of Alza is carried out when there is a demand by its customers (fleet buyers). The

company has a good network with its suppliers, as there is a direct contact between the

manufacturers of component part; presently the company has a distribution network of 124

dealers in Malaysia.

Figure 4: STP in Perodua helping to create value

4.0 EVALUATING THE MARKETING MIX


SEGMENTATION: conservative customers, price sensitive buyers, low income earners, point to point customer. Major customer is low income earner

POSITIONING: through low pricing, availability of services, constant promotions and going new destinations

TARGETING: majorly focusing on low income earner and price sensitive customers as they form the biggest percentage of their revenue

Customers Customers

PromotionPlace

Product Price


The 4p’s marketing mix would be used to determine the market of Perodua Alza in Malaysia and

also find out what marketing strategy Perodua would adopt to create value to its new product

“Alza”. The evaluation would be carried out to investigate how the product (Perodua Alza)

create value to customers, and which price strategy give s value to the product based on

demographic location, aesthetics, product strategies, price strategy, place strategy and promotion

strategies.

4.1 Demographic: It is of great essence to examine demographical environment of the market

because customer purchasing power determines the growth of To Perodua in Malaysia. Most

Perodua Alza owners are from wealth class, they are educated and well informed about the

product and are from a socio-economic segment such as professional executive like

administrative heads, higher managerial and professional occupation who are fleet buyers and

are ready to purchase friendly cars.

4.2 Aesthetics: At a glance, from front and back, the Alza's family resemblance with the Myvi is

obvious. When viewed from most angles, the Alza looks like fatter sibling of the Myvi though

closer inspection reveals bolder styling cues. I heard a few remarks of it looking like a Myvi on

steroids.

4.3 Product strategy: Perodua Alza is known for its nice interior finishing with fitted seats for

comfort. The feature of Alza has over its competitors is technology perks; Alza gives the

impression of a car from the future in several respects. The driver doesn't change gears with a

stick but does it on a computer monitor, several panels display the fuel usage, and there is a

camera built in to help the driver with backing up during parallel parking. If you have been

driving other hybrid cars, stepping into Alza car feel like a major technological upgrade.

Another feature is lower maintenance costs; Alza has fewer parts than a standard car, which can

lead to reduce maintenance costs. A Perodua Alza has regenerative brake pads that should never

need replacing. Replacing the electric engine also costs less than Proton Exora and. Combine this

with the car's fuel efficiency and the owner could save a lot of money by the end of the year.

The last feature it has over its competitors is Recognition; Alza is instantly recognizable. The

Alzas’ distinctive design is thought to add to the car’s appeal because it ensures the Alza will



never be mistaken for a conventional automobile. This adds value to customers by giving them a

sense of prestige as well as feel like they are recognized everywhere they go.

4.3.1 Value delivery (Product) in Perodua:

Consumers often think that a product is simply the physical item that he or she buys. In order to

actively explore the nature of a product further, let’s consider it as three different products; the

CORE product, the ACTUAL product, and finally the AUGMENTED product. Porter (1980)

suggested that most industries contain strategic groups of close competitors groups of firms

within an industry that follow the same strategies or ones that have very similar dimensions.

Figure 5: Three levels of marketing

Source: Marketing teacher, 2013

4.3.1.1 Augmented: Perodua offers a test drive that customers can book online, at a dealership

or through the telephone. The test drive is a personal service where one of the sales staff will



accompany the potential buyer on a test drive of the vehicle and explain how all the functions of

the vehicle works and how they will benefit from them. Perodua also offers a lounge area for

customers to sit in and watch promotional videos while they wait for any type of service.

4.3.1.2 Actual: The Alza is an environmentally friendly cost efficient vehicle that gives the

consumer the prestige of knowing the car has a minimal impact on the environment whilst still

fitting into an image with conscience society with the European styling in the car design. There

are a number of vehicles that aim to achieve the same type of imaging for example Proton Exora.

4.3.1.3 Core: The core product is this instance in transport. When consumers purchase Alza cars,

the most basic benefit they are seeking is a method of transportation; more specifically this

product is passenger transport. In this respect, Alza is deemed to have competitors as all models

of passenger transportation provide this benefit.

However, Kotler noted that much competition takes place at the Augmented Product level rather

than at the Core Benefit level or, as Levitt put it: “New competition is not between what

companies produce in their factories, but between what they add to their factory output in the

form of packaging, services, advertising, customer advice, financing, delivery arrangements,

warehousing, and other things that people value”.

Table 5: Strengths and Weaknesses of Perodua Alza

Strengths Weaknesses

The prices of Perodua cars are

relatively affordable to the 80% of the

people.

Alza cuts car emission by 25% to 30%.

Alza has a greater economic benefit

with less fuel consumption compare to

other cars (100km with 4.4 liters of

fuel.

Advanced technology

High cost associated with Research and

development

High cost compare to non-hybrid cars

Customers choices are limited

High cost of maintenance because of

advanced technology applications.

Table 6: Product differentiation and Focus of Perodua Alza

Product Differentiation Focus



Customer purchasing power of Alza cars is

very low in Malaysia market, there are few

buyers compare to non-hybrid buyers as a

result customer bargaining power is low as the

product is not easily sold

Most hybrid cars are target to fit the market of

a particular segment. Most of Alzas cars are

designed to fit fleet buyers such high

executive, Perodua enjoys brand loyalty as the

company is only targeting one segment, which

is very difficult for competitors to compete.

Alza is a specialized product as such it is

difficult to penetrate.

4.4 Price strategy: The Alza is currently sold in a pure competition market, ‘a market in many

buyers and sellers trade in a uniform commodity’ (Kotler et al. 1994). In other words, there are

many passenger vehicles sold by a wide range of companies all competing in the same

industry. As Perodua release the hybrid vehicle and it currently outclasses its direct competitors

although proton’s hybrid vehicle offers consumers a lower price (Proton, 2013). As the hybrid

technology becomes more widely accepted by consumers and more car manufacturers release

their own hybrid vehicles, the market will become more competitive and Perodua will have to

become more sensitive to the pricing of competitor’s vehicles. As with most pricing strategies

the Perodua prices are Value-Based, as does their competitor, Proton. The price Perodua has set

is ‘based on buyers’ perceptions of the value rather than on their costs (Kotler et al. 1994). The

costs of producing the Alza are secondary to the consumer’s perception of the vehicle’s value; of

course the costs have still been taken into account so the profit goal is achieved by Perodua in

Malaysia. The Valued-Based pricing strategy is both appropriate and effective for Alza

cars. Perodua has marketed the Alza at a reasonable price, comparable to other vehicles sold to a

similar target audience. The Alzas’ pricing has an advantage over comparable vehicles due to its

environmental benefits and fuel cost savings. The Alzas’ price level is in effect a pricing strategy

as consumers often associate a higher price with higher quality. The price difference between

the Alza and its competitor the Proton hybrid will ensure that the Alza sits as the premium

product in the hybrid vehicle market. The positioning is also help in large brand awareness of



Perodua in the Malaysia market place, as opposed to Proton, which has now labelled itself as a

lower quality brand in hybrid vehicles.

4.4.1 Value delivery (Price) in Perodua:

The value of price is heavily and positively felt in all aspect. How the value is been added

actually involves the consumer psychology. Many people attach certain values to high priced

products, including luxury, exclusivity, and quality. By releasing a product with a high price, the

manufacturer (Perodua, Alza) sends a message to prestige-conscious consumers, ensuring that

they will flock to buy their product. Even as the price drops, people will continue to associate

these values with the product, creating a steady demand for it. So this means Perodua add value

to customers by boosting their prestige and giving them a compact car that fits their reputation.

While in return the company Perodua gains value by having high profits, creating of a sense of

exclusivity, and controlling of the market.

4.5 Placement strategy: Although figures vary widely from product to product, roughly a fifth

of the cost of a product goes on getting it to the customer. Place is concerned with various

methods of transporting and storing goods, and then making them available for the customer.

Getting the right product to the right place at the right time involves the distribution system. The

choice of distribution method will depend on a variety of circumstances. It will be more

convenient for some manufacturers to sell to wholesalers who then sell to retailers (Kotler,

2010). Perodua is utilizing the ‘push -pull demand’ strategy with vehicles being demanded then

Imported rather than having surplus stocks). Though Perodua are lessening costs by

implementing a vertical distribution network, the lack of manufacturing facilities and length of

shipping have meant that customers have to wait anywhere from five to twelve months to have

their Alza order fulfilled (Anderson & Narus, 1999). Perodua is not fulfilling the distribution

requirements efficiently because demand is outstripping supply. Perodua in Malaysia is taking

orders for up to 120 Alzas every month but only receiving 50 of them to distribute (Brunner,

1989). Perodua should consider establishing another manufacturing plant in the near future

otherwise they risk losing their market share of hybrid vehicles. However, with the attractiveness

of the new hybrid technology Perodua could use an extra plant to manufacture new hybrid

vehicles with different body designs such as, convertibles, family sedans, station wagons, small

cars and further expand their current market share.


http://www.wisegeek.com/what-is-psychology.htm


4.5.1 Value delivery (Place) in Perodua:

Value is been added to customers through the availability and accessibility of Perodua Alza, take

for example, there are so many car dealers that markets Perodua Alza, which were by makes it

easy for customers to order or purchase Alza product. However even with the many distributing

channels owned by Perodua, some customers still complain of late delivery, so it has been

suggested to Perodua that they should establishing another manufacturing plant in the near future

so as to retain and attract customers. This will also help in continuous building and retaining the

reputation and image of Perodua.

4.6 Promotion strategy: Customers have to be made aware of the product. The two main

considerations are target market and cost. A new business will not be able to afford to advertise

on national television, for instance and would not wish to because its market will be local to start

with. Leaflets, billboards, advertisements in local newspapers, Yellow Pages and ‘word of

mouth’ would be more appropriate. Kohli & Jaworski (1990) states that promotion includes all

of the activities marketers undertake to inform consumers about their products and to encourage

potential customers to purchase these products.

However, Perodua has used a number of forms of media to promote the Alza: Newspapers

announcements; the first stage of promotion for the current model Alza was a series of

newspaper announcements. These were placed in newspapers the target audience read, these

adverts were aimed at raising consumer awareness of the product (Brunner, 1989). There was a

series of staged television advertisements broadcast in Malaysia. The first advert was aimed

enlightening consumers about the environmental aspects of the Alza, the second was drawing

their attention to the cost savings on fuel and, the third advertisement was geared at positioning

the Perodua branding with the Alza (Anderson & Narus, 1999). The current television

adverts still focus on branding and positioning. The main push is towards environmentally

conscientious consumers and value conscientious consumers. Interactive magazine

advertisements; A number of interactive adverts were placed in motoring and lifestyle

magazines. These were fold out page adverts and some contained small fuel samples too. These

adverts were aimed at informing the reader of the environmental benefits and economic value

received in owning Alza (Anderson & Narus, 1999). Internet banner advertisements (leading



customer to website) Internet banner adverts directing customer the Alza website were launched

across a number of websites and search engines in the initial stages of promotion. The website

provides: vehicle specifications and images; detailed pricing; articles and reviews; financing

arrangements; subscriptions to a newsletter; brochures; dealer locations; and an online test drive

booking form. The website is geared at informing the viewer of the environmental,

technological, and economic and prestige elements the Alza has to offer. In the current economic

climate there is a big focus on one particular external factor throughout developed nations with

ever increasing oil prices; petrol is becoming more and more expensive. This is one of the areas

that the Alza has the advantage over the average passenger vehicle, able to promote the vehicle

will consume 50 per cent less fuel than an average car, enticing consumers toward the economic

value the Alza offers (http://www.perodua.com). There needs to be more development

of consumer awareness of the Alza. Perodua has not included the Alza in any sponsored

events. The Alza needs to be included in sponsored events so consumers can easily identify with

the vehicle and see its functions. Sponsorship may also alleviate the current threat Perodua face

with delay in distribution of the Alza. If consumer loyalty to the Alza is developed they will not

mind waiting so long to receive their vehicle.

4.6.1 Value delivery (Promotion) in Perodua:

The public relation method delivered value to customers by informing the customers exactly all

the things they need to know about the car, like the features, passing the right information to

customers is a sign of dependability to customers, meaning that the company is reliability, that

what they advertise is exactly what they sell, which will make customers see Perodua as a trust

worthy company. While the personal selling added value to customers by not just getting the

information from newspapers and magazines, but giving the customers the opportunity to test

drive the car, having someone to tell them exactly how the car works and correct every doubt in

customers mind. Perodua will derive value from this by having their product in the minds of

customers and attracting customers by creating awareness.

4.7 Aesthetics: At a glance, from front and back, the Alza's family resemblance with the Myvi is

obvious. When viewed from most angles, the Alza looks like fatter sibling of the Myvi though

closer inspection reveals bolder styling cues. I heard a few remarks of it looking like a Myvi on

steroids.


http://www.perodua.com/


Table 7: SWOT Analysis of Perodua Company

Strengths Weaknesses

Producing compact cars.

Value for money.

Excellent reliability and build quality.

Plus the impressive standard equipment

specification and latest generation

technology apparent in models.

The prices of Perodua cars are

relatively affordable to the 80% of the

people.

Fuel saving.

Easy to drift for beginners.

Suitable for couple.

Low Research & development.

Not innovative.

Weak management team.

Low productivity.

Waiting for the new part for a long

time.

Low quality.

Produce in Malaysia.

Opportunities Threats

Financial markets (raise money through

debt, etc).

Innovation.

New technology from Wayne Company

Able to add-on nitrous.

Prices of petroleum are increasing,

thus, people opt to change to cheaper

cars to ease their burden on

transportation.

Economic slowdown.

The rise of Batman.

The rise of the guardian.

The rise of Spiderman.



5.0 MARKET SEGMENTS

5.1 Description of market segment A (Males)

Business to Consumer (B2C) was one of the tools to be used to market the product in Malaysia.

It was one of the effective marketing tools as the pattern of purchasing within the consumers was

portrayed as aggressive in this digital age (Wynn, 2008). However, there is a concern in using

this tool as it uses a shorter period and attract the consumers’ response.

5.1.1 Demographic: the target consumers area both male and female, but mainly mid-aged

males (35-50 years). Both of the genders are educated and aware as they are from AB socio-

economic segment. This can be concluded the consumers are blue collar workers from executive

to high level manager who have the purchasing behaviour to purchase low petrol consumption.

5.1.2 Psychographic: The customers were categorized as early adopters/technology pioneers

when the car launches. The demand of Perodua cars is high as the features compatible and

suitable to consumers’ lifestyle from the size, low petrol consumption and carbon emission.

Figure 6: Technology adoption lifecycle

Source: Technology adoption lifecycle, 2012



5.1.3 Geographic: Perodua cars were segmented for consumers living in the cities as it

convenient for individuals and families. Perodua is unable to market their cars to rural area

such as Sabah and Sarawak due to rocky road pavement and different lifestyle.

5.2 Description of market segment B (Females)

As stated, Perodua cars were designed for both genders as it main purpose is to market the

compact cars’. Perodua cars were designed for consumers for those who just entered into job

market and low petrol consumptions. Besides that, one of the functions of Perodua cars is carbon

emission reduction.

5.2.1 Demographic: Ladies who purchases Perodua cars are those who are fresh graduate or

with less than 2 years experience. They preferred compacts cars as it was convenient to them and

majorities of them are aged from 23 – 26 years old.

5.2.2 Psychological: the living cost in Malaysia is high and the petrol price increase price in

September 2013. This gave an opportunity for Perodua to invest and modify cars for suitability.

Cars with an efficiency fuels one of the objectives for females to purchase cars. This was one of

the key for Perodua to penetrate into market.

5.2.3 Geographical: Myvi was one of the high demands for consumer purchase and widely

accepted especially in the city such as Kuala Lumpur and Penang. Hence, car dealers and retails

were opened across Peninsular Malaysia.



5.3 Evaluation of market segment A and B

Perodua

An organization is able to understand and able to create marketing strategy once they have a

solid market segmentation. The market segmentation of Perodua was similar to Wynn’s (2008)

theory which is to transform the pattern of consumers into buyers. Perodua have a solid

marketing strategy and have a strong branding. Perodua is well-known as they identifies

consumers’ needs and provide a customer service satisfaction by marketing directly to the

consumers. By portraying a strong branding and excellent customer service can create word-of-

mouth.

There are many criteria and needs to cater to each consumer as their main objectives for status,

comfort and price sensitivity or safety purpose. Perodua has looked carefully into every factor in

designing each car to cater everyone’s needs. Besides that, Perodua also observe the age pattern

of the consumers. Daina (2012) observed the interest of Gen Y into the advancement

technologies. This can be concluded as the withdrawal of baby boomers leads to the growth of

Gen-Y and Z. The digital era today creates firms to be productive in IT and tech-savvy which

gave an opportunity to Perodua to invest and consider every areas in creating the model of the

car. Thus, they are able to invest and create a car for safety purpose and low petrol consumption

based on adequate information and advancement of technologies. Besides that, the large amount

of young graduates gives an opportunity to Perodua to create a reasonable car which is Myvi.

They shift the focus into pricing strategy and channel distribution as their tools in marketing

strategy. In addition, the shift of the digital era uses the electronic marketing tool which is social

media to create awareness and accessible to all around the world.



6.0 NEW MARKET INITIATIVES

Based on the analysis, the trend of the marketing tool has change drastically and the direction of

the company has changed from traditional into digital era. The growth of the technology and

impact of the service quality was the few factors to cater all the consumers’ needs in the world.

There are four new marketing initiative was used by Perodua.

6.1 The four new marketing initiatives

6.1.1 Theme:

A theme was used commonly by many organizations and has become one of the marketing

initiatives. For instance, an automobile company, Geiko has successfully position in the market

by using a talking Geiko (animal) as their commercial. It was a successful branding as it creates

an impression and attract the consumers. Perodua uses cost leadership as their theme for their

marketing branding. It was a competitive advantage for Perodua to design and manufactured a

good quality car with a reasonable price.

6.1.2 Virtual customer services: Emphasizing world class customer services is one attributes as

their marketing strategy. Perodua uses Internet and social media as one the marketing tool to

establish a good relationship with customers. It was one of the efficient ways to build

relationship with customer via online and create convenience to consumers without visiting the

car show dealers. In addition, Perodua can use social media such as Facebook and Instagram to

promote and create advertisements.

6.1.3 Diverse cultures: Perodua was well-known for their branding across Asia countries. It was

an essential for Perodua expand their business out of Malaysia. This allows Perodua have an

opportunity to set up their marketing position and invest R&D for each country. this creates

multiple choice for consumer to choose as well.

6.1.4 Diverse networking: Perodua has a bigger vision despite being one of the main car

manufacturers. Perodua can create and modify cars with collaboration with other industries. The



other industry is emerging such as aerospace, solar and constructions. Perodua can collaborate

with solar companies to create a smart car and environmental friendly car.

6.2 Rationale for success

Perodua has create a strong marketing strategy after develop a lot of research and branding in the

market such as using 4Ps. Besides that, Perodua is able to penetrate the market although they

have faces a lot of threats such as pattern of consumer behaviours and the industry is moving into

digital era. Social media is currently the trend in as it has various functions such as giving

“shoutout’, competitions and advertisements. This advertising strategy is able to increase the

promotion and awareness among the consumers. Hence, it leads to increase revenue and market

share.

Besides that, Perodua can provide and improvised the customers services through telephone and

face-to-face. A good customer services can creates a good impression to the consumers. Thus,

this creates a word-of-mouth for the company and creates an opportunity for internal staff to

create indoor sales for spare parts.

Figure 7: The impact of new initiatives on Perodua`s 4 Ps and success impacts.

Figure 7 shows a diagram of marketing new initiatives and the successful rate by using the

marketing tools. Therefore, recommendation needs to adopt to create a successful branding

which is every company’s dreams.


theme

Virtual services

Diverse workforce

Global Networking

Product

Place

PricePromotion

-Increased market share and size-More revenue-New innovation and technologies-Effective targeting of untapped market-Global presence


7.0 CONCLUSION

As people begin to accept the new technology, the price of fuel continues to increase and

environmental awareness grows the Alza is well positioned in the market (Malaysian Financial

Review, 2004). The Value-Based pricing strategy is highly effective for the Alza and is in line

with customer value-perceptions. There are a number of future external threats to the Alza. The

hybrid technology is being heavily researched and developed by competitors and in the very near

future a number of new hybrid vehicles will be released. Perodua should carry out research and

development into producing a variety of different vehicles using the hybrid technology; this

would attract a wider target audience. The current logistics arrangement has both positive and

negative implications. On the one hand cars are manufactured when ordered, eliminating excess

inventories but on the other, this has resulted in lengthy delays in getting the product to the

customer and could cost Perodua sales. There is a lack of awareness of the Alza on the market;

this could be relieved by using the Alza in sponsoring key events and encouraging customer

loyalties to the vehicle as well as the Perodua brand. Overall the Perodua Alza is being marketed

effectively; this is reflected by the continual increase in sales. Defects in the earlier models of the

product have been realized and amended which has instilled confidence in customers that their

concerns are being listened to and met. However, Perodua must continue to monitor their

position on the Hybrid market as more companies adopt the technology.

8.0 RECOMMENDATION



Product Recommendation: Further research and development into a variety of vehicle body

designs should be carried out to investigate the possibility of expanding on the Alzas’ current

target market and to maintain their current positioning in the hybrid vehicle market.

Price Recommendations: The pricing strategy is the most effective element present in the

Alzas’ marketing mix. The price is competitive with comparable vehicles and accurately reflects

consumer perception of the Alzas’ worth.

Placement Recommendation: Perodua Malaysia needs to investigate the viability of

establishing at least one more manufacturing plant because there is a risk of losing the large

number of would be customers who wish to have the Alza because it is new technology and

do not wish to wait for up to twelve months to receive their vehicle. There is a danger that other

competitors could take Perodua’s portion of the hybrid vehicle market with faster manufacturing

and distribution networks.

Promotion Recommendation: In terms of promotion Perodua should consider entering into

sponsorship arrangements at some major events so people engage with the Alza by seeing

how the vehicle functions, creating ‘customer awareness’ whilst still maintaining Perodua’s

branding and generating loyalty to the product. In line with environmental initiatives the United

Kingdom has offered to members of the public and businesses, Perodua Malaysia should propose

a cash back scheme to the Malaysian government, by the Malaysian government to customers

that purchase hybrid vehicles. This cash back scheme would encourage consumers’ to purchase

vehicles that use less fossil fuel and provide financial incentive to consumers to buy an Alza car.

New marketing initiatives: Perodua should consider adopting some new trends and initiatives

rather than doing business in same way and focusing on just production. The need to partner and

provide regular services is very important especially in the virtual manner.

REFERENCES

Anderson, J.C & Narus J.A (1999). Business marketing management, understanding, creating



and delivering value. New Jersey. Prentice Hall.

Brunner, G.C (1989). The marketing mix: Time for re-conceptualization. Journal of marketing

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Levitt, Th. (1980). Marketing Success through Differentiation – of Anything. Harvard Business Review, 58 (4), 83-91.

Perodua, (2012). “Mission and Values”. Retrieved

from: http://www.perodua.com.my/index.php?section=corporate&id=11 [Accessed 30 December, 2012].

Perodua, (2012). “Manufacturing”. Retrieved

from: http://www.perodua.com.my/index.php?section=corporate&id=5 [Accessed 30 December, 2012].

Perodua, (2012). “Corporate Information”. Retrieved

from:http://www.perodua.com.my/index.php?section=corporate&id=12 [Accessed 30 December, 2012].

Proton, (2012). “Corporate Information”. Retrieved from: http://www.proton.com [Accessed on

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APPENDIX 1

CHALLENGES FACED BY PERODUA IN GLOBAL SOURCING


http://www.proton.com/

http://www.perodua.com.my/index.php?section=corporate&id=5

http://www.perodua.com.my/index.php?section=corporate&id=11


Every company faces challenges if they outsourcing information from different countries. Here

are the important challenges faced by Perodua Company such as;

i. Different currencies and valuations in different countries: countries currencies are not

always stable and this could be as a result of their economy, and also will affect the

foreign sourcing of material for production. This seems as one of the most challenges

faced by Perodua in outsourcing material for its production.

ii. Different tax laws: Every country has a tax rate for foreign investors and it differs from

each countries. From the perception of globalization, the operation of Perodua and its

business focus outside the country for outsourcing material, which they deems fit to

undergo such dilemma, which could also affect their cost of purchasing a material as well

their decision too.

iii. Different trading protocols: Trading protocol differs from each countries and so as

organisation culture too. Perodua might not be comfortable with the current protocol of

other organisation towards its own company, which might affect its decision making,

profits and as well as overall performance of the company.

iv. Lack of transparency of cost and profit: Transparency is main point in every

successful business, but most companies do not implement it effectively. Perodua will

fail if they do not implement an accurate transparency in their business transaction, which

leads to low profit and high cost due to the value manipulation from each party. This

factor is affecting Perodua in dealing with foreign countries.

CORPORATE STRUCTURE

Perodua corporate structure is incorporate with Daihatsu Motor Company and Mistui, which

leads to a collective stake of 51% stake in Perodua Auto corporation, and create a 51% equity in

Perodua manufacturing, and this comprises mostly Malaysian investment is 171.6 million for the

41% stake, while Mitsui is poses only RM41.9 million for its 10% stake.


perodua marketing assignt1

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