The vision statement in terms of future position of Perusahaan Otomobil Kedua Sendirian Berhad (Perodua) company is to be the provider of the motor vehicles and undertaking risk management services, brokerage, and delivering reliable and excellent services (Perodua, 2018). The mission of Perodua focuses on developing and delivering products and services in an attempt to articulate to high professionalism level and meeting the expectations and needs of the clients. Its short-term goals and its approach to achieve those goals are placing strong emphasis on a learning environment with the need to stimulating the development of staff and training of the high-calibre professionalism (Perodua, 2018).
Diagram 1. Perodua Axia
2.0 Situational analysis /environmental analysis
2.1 Internal environment
2.1.1 Company analysis
Despite increased business rivalry in Malaysia’s car manufacturing sector, Perodua Sdn Bhd has continued to maintain its status as the second leading producer of cars. During its inception in 1993, the company partnered with Daihatsu one of the popular car companies from Japan. Before the company entered into the car industry, the sector was dominated by Proton Holdings. One of the things to understand about the Malaysian car industry is that it is highly protected. To prove that Perodua Sdn Bhd is a leading player in the car industry, the MalaysianAutomotive Association (MAA) revealed that between January and March 2018, the company’s sales were 55,568 vehicles. When this is compared with 135,140 units for the entire industry, then Perodua Sdn Bhd is a major player in the sector. The sales for 2018 have made the company to control 41% stake of the car industry in Malaysia.
2.1.2 Customer analysis
The social class of the target consumers are lower class and middle class. Also, the price of Perodua Axia is affordable and reasonable for the consumers in order to fulfill their needs and wants. The income level for their clients are low to middle income earners, the consumers are segmented based on simple and affordable lifestyle of the individuals, the benefit sought is affordable car that gives them high price value for the investment that they gained (Perodua, 2018). Customer’s needs and wants from Perodua Axia car are real-time availability of the products or automobiles and this can be instrumental in the availability of the products, online customer service and online orders are the basis for attracting millennials in the automobile industry, trusted expertise and personal relationship between the management and the consumers and brand network and maintaining the car dealers in the insurance sectors, intention is on improving the distribution of products and services in the industry and influencing the demand in the industry (Perodua, 2018).
2.1.3 Competitor analysis
Proton is the competitor of Perodua in Malaysia automobile industry. In May 7, 1983, Perusahan Otomobil Nasional Berhad (PROTON) was established to produce, assemble, and sell all types of motor vehicles and products related to car such as different necessary accessories, and additional parts. Most importantly, the first car in Malaysia, the Proton Saga was manufactured by Proton. The idea of a Malaysian car was first envisioned by the Malaysian Prime Minister of that time, Dato’ Seri Mahathir Mohamed in July 9, 1985, when the car was officially launched. 60% of the Malaysian vehicle market including the passenger and commercial vehicles are controlled by the Proton at the time of Perodua’s first introduction. A massive reversal of fortunes has happened since then. As a result, the Malaysian vehicle market has grown more than tripled in size in the last 20 years and the number has been increased from 192,000 units in 1995 to 666,500 units in 2014. The domestic sales of Proton has been declined during this time –from 132,000 units in 1995 to 115,800 units last year which is equivalent to 17% of total vehicle sales. The number of exporting cars has been also decreased by Proton than it did 20 years ago. Some ten years ago, Perodua overtook the position of Proton and it becomes the country’s dominant car brand. Quite impressively, last year the growth of domestic sales has been amounted to 195,000 units, which is 30% of total market share. The domestic sales of Perodua have been jumped by over 21% to 74,700 units in the first four months of 2015. Perodua’s domestic sales was more than double of Proton’s 32,700 sales that means 15.3% market share in that time.
2.2 External environment
2.2.1 Political/ Legal factor
The automotive sector is among those businesses that are highly affected by political factors. Political issues contribute a lot towards the profitability of businesses in the automotive industry. Commonly, various countries have enacted legislation that compels car manufacturers to produce cars that have low emission features. To influence people in buying low emission cars, governments apply tax incentives to cars that support low emissions. The automobile industry benefits from government measures such as incentives to the manufacturing sector which leads to a high consumption rate. In the next two months, car sales are expected to increase more, as in Malaysia zero-rating of the Goods and Services Tax (GST) has already initiated. Say for instance, for a 1.0-litre Axia SE (auto) Perodua offers GST rebates of RM 2,172. Usually, the company sells eight to nine cars per day but after the announcement of GST, they have been selling 11 cars per day.
2.2.2 Economic factor
Economic elements play an integral role in investments in the automobile sector. For instance, cases such as financial crises tend to affect how people purchase automobile products. When the economy is not favorable, people concentrate on buying other essential commodities rather than vehicles. As studied by Aminar, the success of Perodua vehicle sales to remain steady this year depends on the healthy gross domestic product (GDP). According to Ng et al. (2016), one of the threatening indicators for not selling of enough cars will be unemployment. When employment rate is high, naturally the consumers’ earning get increased and the disposable income makes a fruitful effect on the car sales too.
2.2.3 Social/ Cultural factor
The automobile industry is profoundly affected by social and cultural factors. Socio-cultural issues include cases such as changes in people’s preferences in a community. For instance, in some countries, the SUVs are favored more than the sedans. Therefore Perodua should address social and cultural considerations when producing its cars. Some of the concerns that this company should focus on include age distribution since this determines how customers respond to car models. When cars are manufactured on the basis of age distribution, Perodua will address the social and cultural tendencies of its prospective customers.
2.2.4 Technological factor
Technology and innovation are now the essential determinants of market share in the automotive industry. In order to gain higher market share, the company need to be more innovative. Given this fact, Perodua should make huge investments in research and development to reach the customers’ needs and wants. By using the social media platform, Perodua can communicate with their target audience easily and they can receive the feedback and comments from them. Not only this, through internet technology, Perodua can also easily to react with employees, clients or even co-workers in other countries.
2.3 SWOT Analysis
The strengths in Perodua are improvement in technology in Perodua Axia such as new engine with Variable Valve Timing with intelligence (VVT-i) that increase efficiency of manual transmission and fuel consumption, expertise in supermini economy cars that interests modern consumers, its product portfolio and the innovativeness in design and style of its cars manufactured (TheStar, 2015; Chips, 2017). The weaknesses characterizing Perodua operations include poor sales and marketing strategy that mainly only attract customers in Malaysia, quality issues and safety issues have been raised for Perodua Axia car model, Perodua Axia was put into question by clients on why important safety features such as VSC and ABS were not available in Perodua Axia car (Tan, 2016). The opportunities available to Perodua include the market potential especially with the consumer demand for small cars is increasing in Malaysia and the dual-income households which increases disposable income and the car sales (TheStar, 2017). The threats that have negative impacted the ability of Perodua include high competition in the automobile industry in Malaysia with giant competitors like Nissan, Toyota and Honda competing against Perodua and Malaysian Ringgit against U.S Dollar within a year is highly fluctuating which can impact the profitability of the company in the long-run (Trading Economics, 2018).
3.0 Marketing objectives
The new marketing objectives of this new marketing plan is to help Perodua to increase Perodua Axia car’s sales and market share. Perodua’s performance in 2018 substantiates the unique marketing of the company. Malaysian Automobile Association recorded that Perodua sold 55, 568 cars as compared to 135, 140 units for the entire industry. The 2018 sales have made the company to control a 41% stake of the automobile sector. The SMART marketing objectives to increase Perodua Axia’s sales in Malaysia automobile industry in one year are to increase the market share of its Perodua Axia by 4% in the next one year. Besides that, another objective is to increase the sales of Perodua Axia by 200 units monthly for the next one year.
4.0 Marketing strategies
The ideal Ansoff corporate level strategy for Perodua to achieve the marketing objectives to increase Perodua Axia car’s sales and market share in Malaysia automobile industry in one year is market penetration strategy. In terms of suitability, this market penetration strategy is most suitable because it increases the awareness of the products that are delivered by the company and this can be instrumental in maximizing the revenue outlay and market share reported by the company. In terms of acceptability, market penetration strategy will solve the weaknesses and threats that are faced by the company. The strategy will improve the product’s reach to the target consumers and it will be integral in reducing the extensive reliability on the Japan’s automobile sector. As such, it will be influential in increasing its market share and enhancing competitiveness in the dynamic industry. In terms of feasibility, the extent of competition in Malaysia’s automobile industry requires that the organization should employ market penetration strategy in addressing its competitive edge and overall profitability. The concern of the marketing initiatives developed is on meeting its mission statement through articulating to market penetration initiatives that can be deemed to be feasible.
5.0 Tactics- Marketing mix
5.1 Product strategy
The best product strategy to market Perodua Axia car is to increase product features according to customers’ needs and wants. Perodua needs to do further research and development to develop and utilize advanced technology features to improve product features. Perodua can increase product features to reach target audience through technology innovation to increase its competitiveness in the dynamic industry. For example, Perodua company enhance the features of a camera-based collision-avoidance system which can be integrated in any vehicle to drivers avert hazards. The system will inform the driver by making noise when the driver is veering out of lane or tailgating, or the vehicle read the speed limits so it can alert the driver to slow down for safety.
Diagram 2. Camera-based collision-avoidance system
5.2 Pricing strategy
The best price strategy to market Perodua Axia car is penetration pricing strategy, which the prices of the products that are offered by the company are set at a low level for ease of penetration to wider market interest in Malaysia. Perodua can implement penetration pricing strategy to reach target audience by analyse the risk of reducing selling price, innovate and develop ways to reduce cost price and provide staff trainings to increase operation efficiency. The current price for Perodua Axia 1.0 special edition is RM 36,408.73. After enhance the feature, the price will be increase to RM 38,800.
5.3 Place strategy
The best place strategy to market Perodua Axia car is increase channels of distribution to ensure that a wide range of consumers are met and that the products are accepted by the various consumers within Malaysia. Perodua will increase channels of distribution to reach target audience through featuring Perodua Axia car in platform, for example, featuring Perodua Axia car for sale at Shopping mall in Malaysia such as Sunway Pyramid, One Utama and Paradigm mall. The sales workers at each of the shopping mall are trained and highly skilled at not only sales, but also car’s information, data collection and order taking. Although online shopping has become the norm, but there are many shoppers still really love the in-store experience and shopping are most of their favourite pastime. Therefore, conduct an event at shopping malls can easily react with large number of target audience and create the awareness from them.
5.4 Promotion strategy
To promote the model Axia, Perodua come with few events that there will be 5 winners at each of the event who are interested of buying car will have a chance to win the voucher of RM3,000 cash back. The conditions are need to fully understand the Perodua Axia with its features including the new features and answer few given questions correctly. This is because when customers get the chance to fully understand the car’s information and features, it will increase the brand awareness and notice by many other people who are not interested with brand of Perodua before. The best promotion strategy reach target audience and market Perodua Axia car is to use both traditional and digital direct marketing. Perodua will advertise promotions to reach target audience by using traditional methods of advertising including newspapers and radio stations, the traditional media reach out to older generations of potential customers. Even though Facebook doesn’t perform as well as Instagram on engagement, but it is the second highest audience engagement rate compared to any other social networks according to Locowise (Leibowitz, 2018) Also, Perodua will advertise promotions through social medias like Instagram and Facebook to meet the needs and wants of younger generation customers (Alhabash and Ma, 2017).
Conclusion and recommendation
In conclusion, knowing well and target correctly of your marketing mix includes product, price, place and promotion, is very essential to any company or organization to accomplish the targets and objectives. Therefore, Perodua should clearly know about their goals and setting them accordingly to fulfil the customers’ needs and wants and also earning the maximum sales and market share. In addition, in order to stimulate the sales and market share, Perodua can cooperate with the bank to give chance for low income group of people to purchase the car by lowering the interest of loan. Besides, Perodua can also research and develop energy saver to correspond the rising petrol prices, therefore, it might attract a lot of customers as well.