History of perodua analysis

History of perodua analysis Perusahaan Otomobil Kedua Sdn Bhd (PERODUA), established in 1993. In Malaysia Perodua is second automobile manufacturer which after Proton. It is a joint venture company between Malaysian and Japanese. The shareholders of Perodua are UMW Corporation Sdn Bhd 38%, MBM Resources Berhad 20%, Daihatsu Motor Co. Ltd 20%, PNB Equity Resource Corporation Sdn Berhad 10%, Daihatsu (Malaysia) Sdn Bhd 5%, Mitsui Co. Ltd 4.2% and Mitsui Co, (Asia Pacific) Pte Ltd 2.8% (Corporate Information n.d). Perodua does not contend with Proton for the similar market niche because Perodua mostly produce small-compact cars. Since end of 2009, Perodua has sold some 1.67 million units of vehicle of a variety of models. Perodua also sell overseas their cars to UK, Singapore, Brunei, Fiji, Nepal and Sri Lanka. 1.2 Background of Perodua Perodua is located on a 138-hectare site in Sungai Choh, Rawang, Selangor Darul Ehsan. Besides, in the year of 2001, Perodua Auto Corporation Sdn Bhd (PCSB) was established in the final quarter year. Furthermore, there are also another two joint venture partners of PCBS from Japan which are Daihatsu Motor.Co.Ldt. and Mitsui Co. Ltd. The PCBS are being managed the manufacturing operations of the Perodua Group (Corporate Information, 2010). 1.3 Mission and Vision 1.3.1 Mission Perodua mission is to Professionalism in all our operations Efficiency in utilizing technologies and available resources Resilience in meeting our challenges Optimizing benefits to customers and stakeholders Dedication towards social responsibility to community, the environment and development of competent workforce Uniqueness in our products Aspiration to glorify the name of PERODUA 1.3.2 Vision The vision of Perodua is to be the most preferred automotive brand renowned for products and services of excellent quality which contributes to the development of the nation. 1.4 Product Milestone Below is the list of the vehicle that Perodua produce: The Perodua Kancil-August 1994 The Perodua Rusa March 1996 The Perodua Kembara August 1998 The Perodua Kenari   June 2000 The Perodua Kelisa August 2001 The Perodua Myvi May 2005 The Perodua Viva   May 2007 The Perodua Nautica 4WD May 2008 The Perodua Alza November 2009 (Corporate Information, 2010) 2.0 Analysis of Market Environment Factors that Affect this Company For a company it is very necessary to have updated date and to have a close watch and to assess the ever changing environment around them. There are 2 types of environment and there are Micro Environment and Macro Environment (Pride.et.al, 2007). 2.1 The Micro Environment The close forces to the company that have effect on its capability to get the goods successfully to the customer. While for the micro environment consists of 6 factors (Pride.et.al, 2007). 2.1.1 Customer Customer can be divided into 5 types of markets to get a better idea on them which are: 2.1.1 (a) Consumer Market The person who buys the product for consumption is called the consumer market (Pride.et.al, 2007). Perodua Company comes with varies vehicles that can attract buyers especially these who want an affordable yet efficient vehicle. The company mostly targets on individuals or families who want to buy quality car at a premium as Perodua Company sets up the prices that are reasonable and affordable by most consumers. Perodua Myvi is product on May 2005 by Perodua Company which is one of the examples for individual or family use. 2.1.1 (b) Business Market The companies which buy goods and services are to be used in the production id other goods (Pride.et.al, 2007). For instance, Perodua Company buys the parts from other countries but the assembling is done in Malaysia. 2.1.1(c) Reseller Market The companies that purchases the goods or services and resell the product without making any changes to it (Pride.et.al, 2007). For examples, Perodua dealers get the product from the main company and finally distribute to them without making any changes of the cars. 2.1.1 (d) Government Market For government market they may purchase it to be used it in the production of goods and services (Pride.et.al, 2007). For example, the model of Perodua Myvi, Perodua Kancil, Perodua Viva are provided to the government for the use of National Parade Day. 2.1.1 (e) International Market The products used for the use of the government to carry on with the government duties (Pride.et.al, 2007). For international market, Perodua Myvi purchases for the overseas market such as United Kingdom, Singapore, Brunei, Fiji, Nepal and Sri Lanka. 2.1.2 Company This segment is about the togetherness which should be there among all departments so that the product will be delivered to the customer in the desired time. This process will be an incomplete process if there are disagreements between departments, which will result in a delay of not delivering the product to the customer on time (Pride.et.al, 2007). 2.1.3 Competitors There are two types of competitors that will affect the sales of Perodua Company which are direct and in direct competitors. 2.1.3 (a) Direct Competitors The companies which manufacture the same products within the same industry (Pride.et.al, 2007). For instance, Suzuki, Toyota and Proton are Perodua Companys direct competitors as the companies sell similar types of vehicles within the same industry. 2.1.3(b) Indirect Competitors Indirect competitors mean that when any company which competes for the same customer dollar (Pride.et.al, 2007). The indirect competitors for Perodua will be Toyota, Proton, Naza, Honda, BMW, and Mercedes. This is because they are also produce cars and they are also competing for the consumer dollars (Corporate Information, 2009). 2.1.4 Suppliers Suppliers could be defined as those who supply the necessary parts to build the product. The supplier influences the quality and delivery of the ended product. Suppliers should be from a reliable source and should be consistent at an arms reach (Pride.et.al, 2007). 2.1.5 Marketing Intermediaries Marketing Intermediaries is also known as the middle man. The mediating is usually done by a company in order to distribute or promote goods to the customer (Pride.et.al, 2007). The sales Manager stated that Giga Shipping Company transports all the Perodua Products worldwide. There is also a trailer company which provides trailer service to transport products around Malaysia (Personal Development Leadership, n.d). Besides marketing intermediaries, mediating can also be financially. As an example, EON bank, RHB Bank, Islam Bank act as a mediator in order to promote Peroduas cars. These companies provide a loan system so that the customers could have a minimum payment monthly and enjoy the same benefits of a comfortable car. 2.1.6 Publics Publics could be defined as a crowd of people who have an interest in a company and also who make an impact to an organization to achieve its objectives. Moreover, a company will take this consideration and try building up relationships and also offer helpfulness to these groups. There are the 7 types of publics such as local, media, citizen action, government, general, internal and financial (Pride.et.al, 2007). 2.1.6 (a) Local A community relations officer is appointed by the company to be present at meetings with the local publics (Pride.et.al, 2007). Perodua Myvi customer are eligible to join the club via (http://www.myviclub.com/). There is a public relations officer is appointed from Perodua Company regarding this club. On the other hand, the officer also can meet with the customer and makes interaction with the customer. 2.1.6 (b) Financial The company issues an annual publication which is the annual report which also includes the financial statements in the company. The shareholders were given by the company (Pride.et.al, 2007). All the Perodua Company share holders receive the annual report of the company in order to keep the shareholders informed about the financial status of the company (Corporate Information, 2010). 2.1.6 (c) Media Media can be described as a company would promote their product more with a positively media coverage (Pride.et.al, 2007). For example, Perodua Company promotes Perodua Myvi on television advertisements. The official advertisement is telecasted on television. Also, they also advertise the product on the World Wide Web (Corporate Information, 2010). 2.1.6 (d) General The general publics view in the company is called general (Pride.et.al, 2007). Through our research, most of the customer would like to view on the Perodua Company. Hence, positive or negative, it is basically what the customer thinks about the company. 2.2 Macro Environment The societal forces that influence the organizations ability to provide the customers are called macro environment factors which are 6 factors. 2.2.1 Political Legal The legislation and laws which influences the industry, marketers should be on watch out of the laws which can involve the company in the future (Pride.et.al, 2007). Since Perodua Company is fully owned by the government of Malaysia, the tax is already included in the price of the vehicle. Therefore, the government gets a sum of charges (Corporate Information, 2010). 2.2.2 Economic Environment The Economic environment investigates the disposable income levels. In addition, the economic conditions include the business cycle, inflation, interest rate and inflations rates (Pride.et.at, 2007). 2.2.2(a) Inflation Rate 2.2.3 Technological Environment 2.2.4 Demographic 2.2.5 Cultural 2.3 How the Company faces Threats and how they convert them to Opportunity The SWOT analysis is known as the tool to asses a companys Strength, Weakness, Opportunity and Threats. Strength and Weakness are known as internal factors while Opportunity and Threats are known as the positive conditions which could bring plunder to the company if acted in the necessary way. For Threats, it can be defined as the barriers which prevent the Company from reaching the companys objectives. When a company puts out a new product, there could be threats which come the companys way. Then the company should be ready with a defensive strategy to stand up against the threat and that strategy is known as Opportunity (Pride.et.at, 2007). After the release of Perodua Myvi, the company has faced several threats. So, to get rid of these threats of Perodua Company, Perodua Company came made that threats into opportunity by making up a strategic plan (Corporate Information, 2010). 2.3.1 The Entry to the Domestic Market The entrance of Perodua to the market was in the year of 1993 and it also result a massive change in the industry. Nissan and Toyota were dominating the market which result Perodua getting a small slice in the market. And Perodua got a boost because Indonesia. This is because they tend to sell about 500 Perodua Myvi cars in a month (paultan.org, 2010). 2.3.2 The Support Since Perodua was quite new to the domestic market, as mentioned previously there was also because of Indonesia. As a result of this undertaking of Indonesia, the workforce of Perodua was sent to Japan for a special training to learn more about engineering skills and assembling skills. This opportunity could be known as a Human Resource 2.3.3 The Competitors Perodua is known as the second National Car producer in Malaysia which is after Proton Company. But, the competitors to Perodua are from the domestic Market as well as the International Market. The Domestic competitors are named as Proton and Naza while the competitors from the international market are Toyota, BMW and Mercedes. Through these competitors are threats to the company, Peroduas strategic plan has kept them as the best car in the Malaysia up-to-date. Besides, Perodua Company is always on the watch out of product life cycle. So, if any company comes out with any new model, Perodua will try to modify the existing model or trying to put out a new model. All in all, company will always want to produce products according to customer trends and not company trends. If the company produces according to the company trends then the sales can go down. But, if the company acts according to the customer trends there can be good sales. 3.0 Target Market 3.1 Target Customer Characteristics Target market involves dividing a market into segments and then concentrating on marketing products on one or a few key segments (Pride.et.al, 2007). The target market of Perodua Myvi is segmented by demographic consumer such as the businessman who likes to work and it is convenient to them. Therefore, the comfort of the passenger is the main target. Also, the vehicle price of Perodua Myvi is affordable and reasonable for the customers which fulfill their demands too. Furthermore, the first target market strategy used is differentiated marketing. Differentiated market is the organization selects several market segments and designs different marketing mixes for each segment (Pride.et.al, 2007). The Perodua Company has used different strategy to attract different customers. Therefore, the Perodua Company offered the other vehicles for its different target segments to meet the customer demands. Some of the customers are looking for more convenient cars such as Perodua Viva while customers with big family would like to choose Perodua Alza. Another target market strategy used is undifferentiated marketing. The marketing mix, which are the 4Ps are the organization at the whole market. Besides, the organizations also used to avoid other segments from existing, the organization chooses to mass market (Pride.et.al, 2007). For example, 30 September of 2009, Citibank credit card deals have organized Perodua Myvi 10X rewards points Easy Pay Campaign. This is use to the customer can make a down payment by using the Citibank credit card and enjoy 0% interest on the customer down payment and 10X rewards point (Citibank Perodua Myvi 10X Rewards Points Easy Pay Campaign, 2009). While for the last target market strategy used is concentrated marketing. There are one or two segments will be selected by the company and a marketing mix for these few segments will be proposed (Pride.et.al, 2007). Therefore, the aim of Perodua Company use concentrated marketing strategy is not to maximize sales; it is efficiency, attracting a large portion of once section while controlling costs. 4.0 Product 4.1 Product Lines that are offered A product line is viewed as a unit because of marketing, technical or for end-use considerations, by groups of closely related product items (Pride.et.al, 2007). Perodua have released many models of Myvi to suit the different taste of the customers. Firstly, there is the original Myvi and now comes with another two different versions which is the Myvi SE and the Myvi EE (Exclusive Edition). Each of these models comes with a different pricing and specifications. 4.2 Core, Actual and Augmented When purchasing tangible product, the buyer will not only obtain the product itself, but also all the extra things that come together with the product. This is also known as total product. The total product of the item can be separated into three categories which are the core product, actual product and augmented product. 4.2.1 Core Product Core products are the essential benefits that the buyer want when purchasing the product. The actual benefit that the buyers get when purchasing a Perodua Myvi is transportation. Buying a Perodua Myvi allows the buyer can move around in a vehicle without depending on public transport. This allows the buyer to be able to travel to any destination at any time without relying on the rigid time frame of a public transport. 4.2.2 Actual Product Actual products are the fundamental expectation of the buyer of the product (Pride.et.al, 2007). The consumers most basic expectations from buying a Perodua Myvi are the style and design of the car. In the Perodua official website it is stated that the design of Perodua Myvi is a mix of classy and sporty characteristic (Perodua 2009). Besides that, there are many colours for the buyer to customize the Perodua Myvi to suit the their taste. The engine of Perodua is also manufactured in Japan by Daihatsu. The Perodua Myvi is also known to be more fuel efficient as compared to other cars sold in the market. It is said that Perodua Myvi Auto uses around 13.5 km per litre and the Perodua Myvi manual is clocked at approximately 17.1km per litre of petrol (Tan, P 2009). The Perodua Myvi is readily built with air-conditioner and entertainment system with the latest audio technology like mp3 and a USB reader (Perodua 2009). The consumer can have the option of the transmission of the car to be automatic or manual. To prevent the car from being stolen, Perodua Myvi is equipped with a security system which includes an engine immobiliser. The only way to unlock the immobilizer to start the car is by using the owners car keys. As a result, if somebody breaks into the car, they wont be able start the car by using duplicated keys or by tampering with the wires. 4.2.3 Augmented Product The augmented products are the additional services the consumer will receive when buying the product. The augmented product of buying a Perodua Myvi is that it easier to apply for a loan compared to other imported cars because it is a national car. Besides that, Perodua provide services like parts replacement and repair at their service centre. The spare parts of Perodua Myvi are also easily available compared to imported cars. Other than that, Perodua also provide an extended warranty service for free (Perodua, 2009). 4.3 Branding, Packaging, Labeling, Warranty, Customer Service 4.3.1 Branding (Shenron, 2009) Branding is a blend of a term, sign, name, symbol or design which is used to recognize and distinguish products and companies (Pride.et.al, 2007). Perodua has a small car like Myvi with a big future. Hence, Malaysias leading compact carmaker is always taken by Perodua. Besides, their management team still not really satisfied with their position at the top and their research and development facilities have given the most critical activity, innovation in design and creative engineering methods. Nowadays, Perodua is now able to deliver more stylish, unique, and cars with an attractive price to their consumers. This new brand statement, Building Cars, People First, is Peroduas new visual identity (Interbrand, 2010). Perodua expects to manage all their customers in harmony with their guiding vision. Besides, Perodua was at the position of seventh most valuable Malaysia brand in Interbrands 2007 survey and it looks set to continue get build up and enhance. This shows that Perodua try their very best to respond their customer satisfactory. 4.3.2 Warranties and Customer Services Perodua Company consists of customer service which is known as smart assist. In the even of a breakdown, members can call the toll free number: 1-800-88-5555. The call centre will dispatch a rescue team to the location of the vehicle. This service is available 24 hours a day, 7 days a week. Besides, all the customer service agents practice a friendly, thoughtful, humble and committed routine to give their customers very best service. Furthermore, 1-hour Superservis also provided and this service is a speedy service package that comes with a money-back guarantee once the customers car is not serviced in one hour. While for the warranty period, Perodua Company has given 3-year/100,000km manufacturers warranty. For the extended warranty is plus 3-year/75,000km. ETP is stand for Extended Warranty Programme which is an extension of the Basic Warranty Coverage that comes with your Perodua by giving the customer an additional coverage period (Perodua, 2010). 4.3.3 Product life Cycle Product life cycle can be defined as progression of a product through development, introduction, growth, maturity and decline stage. 4.3.3 (a) Development Product development is the incubation stage of the product life cycle. There are no sales and the firm prepares to introduce the product. 4.3.3 (b) Introduction In introduction stage, the product has just appeared in the market with the company having little profit or the negative profit as there is only little consumer awareness on the product. In this stage, the company increases the awareness of the public about the product through promotion or advertising. The Perodua Myvi is marketed to the public through local mediums such as newspapers, radio and television. 4.3.3 (c) Growth During the growth stage, sales start to increase rapidly but the promotion costs are still high due to increasing consumer awareness thru advertising and etc. The growth stage is critical to a products survival because competitive reactions to the products success during this period will influence the products life expectancy. The profits begin to decline late in this stage as other car competitors enter the market with their own cars to compete with the Perodua Myvi. 4.3.3 (d) Maturity During maturity stage, the sale curve peaks as there are maximum sales and production efficiencies lead to maximum profits occurring in this stage. In this stage, the company will want to maintain the sales on the product. In keeping the maturity stage going for as long as possible, the company reintroduces the Perodua Myvi with versions and will also have a facelift. Example of this is the introduction of the Perodua Myvi SE to the market. 4.3.3 (e) Decline In the final stage, which is the decline stage, the sales will fall rapidly. This is because the sales and profits of the product decline. Therefore, the company needs to determine whether to retain or drop the product. The current Perodua Myvi is in a decline stage but is still doing well in the market as it is ranked the top selling car in the country in the compact segment for the third year running in the assessment conducted by J.D. Power Asia Pacific, therefore leading the Perodua Company to continue the production of the car. The graph above illustrates how the product life cycle of Perodua Myvi has reached the maturity stage where the company is making maximum profit from the sales of its product that is the Perodua Myvi. (Managing Products and Brand, n.d). 5.0 Pricing Price is the value exchanged for product in a marketing transaction but price is not always money (Pride.et.al, 2007). There are some pricing strategies that use in Perodua Myvi product. For example, optional product-pricing, psychological pricing and geographical pricing. The optional product-pricing is the pricing the accessory sold with the main product. For instance, car sells with the air-conditioning. While for the psychological pricing is the price set reflects the psychology of pricing and not just the costs. For example, $45900 instead of $46000. Lastly the Perodua company also use the geographical pricing strategies in the Perodua Myvi product. The geographical pricing is pricing products to customers in different parts of the country such as FOB (free on board) and Zone pricing. FOB means that the customers need to pay the freighter fee from the carrier to the final destination and zone pricing is the company set up one zones, the customer in the more distant zones (Pride. et.al, 2007). 5.1 Optional Product Pricing Type of carsThe Perodua Company uses the optional pricing in the Perodua Myvi product, which is the pricing the accessory sold with the main product. The Perodua Myvi is divided into eight type, Myvi 1.0L SR, Myvi 1.3L SX, Myvi 1.3L EZ, Myvi 1.3L SXi, Myvi 1.3L EZi, Myvi SE GHS, Myvi SE ZHS and Myvi 1.3 ZHL. The different accessory of Myvi contains different prices. The different prices are as shown in the table below: (Based on the price listed given in the catalogue) Colour Solid Metallic SMET Myvi 1.0L SR RM 40,721.80 RM41,240.20 Myvi 1.3L SX RM 45,450.20 RM 45,925.20 RM 46,325.20 Myvi 1.3L EZ RM 48,425.50 RM 48,900.20 RM 49300.20 Myvi 1.3L SXi RM48,225.50 RM48,700.20 RM49,100.20 Myvi 1.3L EZi RM 51,240.30 RM 51,700.20 RM52,100.20 Myvi SE GHS RM 51,926.00 RM52,401.00 RM52818.20 Myvi SE ZHS RM 54,940.00 RM 55,426.00 RM 55,826.00 Myvi 1.3 ZHL RM 51,000.00 RM 53,500.20 5.2 Psychological Pricing The psychological pricing is the price set reflects the psychology of pricing and not just the cost. It is also apply in the Perodua Myvi product. Example: (Based on the price list given the catalogue) Myvi 1.3L EZ (solid) RM 48,425.50 Myvi 1.3L EZ (Metallic) RM 48,900.20 Myvi 1.3L EZ (SMET) RM 49300.20 5.3 Geographical Pricing The geographical pricing is the pricing products to customers in different parts of the country. The Perodua Myvi contains different prices according at the different country or different zone. Example (Based on the price list given in the catalogue) The Perodua Myvis Price in Malaysia (1.3L EZi) The Perodua Myvis price in UK (1.3 EZi) RM 52,240.30  £7,499 In the table above shown that the Perodua price in United Kingdom is cheaper once the price convert to Malaysia dollars. The reason Perodua Myvis price in UK is more expensive than Malaysia is because of the sales tax in under vehicle pricing and special interest rate is included (Perodua-uk.com, n.d) 6.0 Distribution According to Perodua Company, there are many branches in Kuching such as at Satok Parade, Jalan Matang and others. The location of Perodua Company can be easily found in Kuching. On the other hand, the Perodua Company also has branches at the overseas country such as in United Kingdom. The Channel organization that is used by the Perodua Company is shown below: 6.1 Conventional Channels The Conventional channels consist of independent producers, wholesalers and retailers. They are all self business which are trying to maximize own profit (Pride.et.al, 2007). 6.2 Vertical Marketing Channels For the vertical marketing channels, the channel members work in a group rather than individually. It is either one who owns the others or they are in contract with each other or has so much power that they all corporate (Pride.et.al, 2007). 6.3 Horizontal Marketing System It is an arrangement with two or more companies at the same level linked together to follow a marketing chance (Pride.et.al, 2007). 7.0 Promotion 7.1 Promotion Goals Promotion is communication by marketers that informs, persuades and reminds potential buyers of a product in order to influence an opinion or to get a response. While inform is a communication used to increase understanding of new brand, or a new product. The company explain how the products function, and recommend the new application for product. The other goals of promotion, persuade the customer to buy now. Finally, remind is a task of retaining the customer knowledge and to call attention to the customers about the importance of the products for they might be used in the future (Pride.et.al, 2007). The promotion goal of Perodua Company in the Perodua Myvi product is inform. Perodua Myvi is still the good selling product in the market. It is convenient and suitable for businessman but also good for small family. In addition, Perodua Company gave information about the Perodua Myvi to society by using several methods, such as brochures, internet advertising through Perodua official websites, road show and many more (Pride.et.al, 2007). 7.2 Promotion Tools To communicate with individuals, groups and organisations, various promotional tactics have been used by Perodua. When Perodua merges specific plans used to manage the integrated marketing communications for Perodua Myvi, that combinations form the promotion mix for Perodua Myvi. Advertisement, personal selling and sales promotion some of the elements of promotion mix. The elements of the marketing communications mix Sources from: (Dolak,D 2009) The main promotion mix used by Perodua in promoting Perodua Myvi is advertisement. Advertisement is the activity of attracting public attention to a product or business, as by paid announcements in the print, broadcast, or electronic media (advertising, 2010). Advertisements used by Perodua are television, the internet, newspapers and prints. The benefit of using advertisement is that it can cover a wide range of audience but is very costly. Personal selling is defined as oral communication with potential buyers of a product with the intention of making a sale (promotion-personal selling, n.d). The advantage of this that it can influence the customer more compare to advertisement. The disadvantage is that it depends on the attitude and the skilfulness of the salesperson to convince the customer. Perodua Myvi is sold through direct selling which is face-to-face by using a sales person. The sales person who does not directly work for the company mostly can lower the price of Perodua Myvi to attract customers. This is because they can deduct the price using their commission. While buying from salesperson at the showroom is more convenient as everything is handled by them and also the quality of the service is much better. Sales promotion refers to many kinds of incentives and techniques directed towards consumers and traders with the intention to produce immediate or short-term sales effects (Definition of Sales Promotion, 2010). Perodua have created many sales promotions to aid in the sales of Perodua Myvi such as the scrapping programme which was scheduled on 1 April 2009. This promotion allows customers to trade-in their old car for a reduction of RM5000 off any Perodua cars (Perodua 2009). Another sales promotion is customers can buy a Perodua Myvi on loan for RM347 a month for the first 5 years. If they booked and registered a Myvi from 13 June to 31 July 2009, the customer is entitled to join their contest. 7.3 Communication Process The communication process is a process whereby the sender is marketing their product to the receiver who is the public and except some feedback from them. Interference in this process which prevents the message being conveyed to the receiver is called noise. One of the noises that can affect Perodua promotion is competitors message. Other automobile companies will also have their own promotions to attract customers. They will always try to convince the customers in believing that their product is better than the rest. When P