Perdana V 6 In The Australian Market example essay topic
The economic data that serves as a basis for an evaluation of the economic soundness of a country, information on the channels of distribution and media availability are also highlighted and discussed. Factors like Australia's Economic Statistic and Activity, population, and trade restrictions can affect the price, subsequently the demand of the of the Perdana in Australia. A competitive market analysis is also carried out to study and gather a clearer vision of what lies ahead. Studying our competitors and how they have flourished in this foreign land is useful to the survivalablity of PROTON; especially in a foreign market. However the study also reveals how the PROTON brand re-established itself after the acquisition of Lotus (British Supercar Makers) in 1996.
The preliminary marketing plan then describes all the necessary steps needed, to successfully launch the Perdana V 6 in Australia. Part 1: CULTURAL ANALYSIS 1.1 AUTOMOTIVE HISTORY IN AUSTRALIA. Australia became a commonwealth of the British Empire in 1901. It was able to take advantage of its natural resources to rapidly develop its agricultural and manufacturing industries. Through the years, this has attracted much foreign interest in investing and taking advantage of the abundance of resources of the country. There is a long history of automobile production in Australia.
Foreign companies such as Ford Motor Company, General Motors (Holden), International Harvester, Chrysler, Nissan, Toyota, Mitsubishi, Volkswagen and Leyland Motors played an important role in the formation of the industry. In the 1960's, the Australian government tried to protect local automotive manufacturers and component makers by introducing protectionist policies. However, it became apparent that local producers could not compete with the imports even with the protectionism offered and policies needed to change to ensure the survival of the industry in Australia. The new policy was aimed towards global integration of the Australian automotive industry. This was achieved through a gradual lowering of tariffs which provides the industry with an opportunity to adjust while maintaining stability and employment. This reform also benefits the consumers through better cheaper quality products.
The Australian Government has adopted these policies as it is in line with their commitment towards free trade under the Asia Pacific Economic Cooperation (APEC). Having understood Australia's stand, it would be beneficial to take advantage of the facilities offered by the Australian Government, to launch our Proton products in an ever expanding Australian market. Other considerations have also been studied in arriving on decision to bring the Perdana V 6 into Australia. They are found in more detail in the following sections. 1.2 GEOGRAPHICAL SETTING Australia is located in the Oceania Region and is a continent between the Indian Ocean and the South Pacific Ocean.
It has a land mass of 7.7 million square kilometers. The country generally experiences arid to semiarid weather conditions. However, the northern regions of Australia experiences tropical climate. Though Australia is considered the sixth largest country in terms of land size, the majority of the population are mostly concentrated on the southwestern, eastern and southeastern coast. This information is important in assessing the regions in Australia where the Perdana V 6 will be made available as well as the accessories to be installed to fit the climate and other weather conditions. 1.3 SOCIAL INSTITUTION Nuclear families make up most Australian homes.
June 1994 Labour Force Survey estimated that there are 4.7 million families in Australia of which 49% were families with dependents present. A nuclear family which is usually made up of father mother and the kids thus represent nearly half the amount of families. In most homes, the father is still regarded as the breadwinner of the family. However, recent surveys do show that there is an increase in single parenthood among Australian families. This would also mean that single mums and not necessary dads play more important roles in providing for the family. A study of these data would present Proton with an understanding of the roles and function of the Australian family.
Market segmentation and target markets can be chosen and advertisements can be tailored to suit these individuals. 1.4 LANGUAGE The national and official language used in Australia is English. As Australia is a multiracial society, sections of the population do have their ethnic languages. In addition to that there is also the aboriginal languages that is used by the natives of Australia (A list of their variety of languages can be found at web) Though, languages in Australia may vary to a certain extent, the English language is widely use throughout the country.
Thus, Proton in promoting the Perdana, will convey its messages to the target market through the English language. 1.5 EDUCATION Results from the Survey of Aspects of Literacy show that in 1996, about 20% of Australians aged 15-74 had very poor literacy skills (Level 1) and could be expected to experience considerable difficulties in using many of the texts and documents printed in English that they encounter in daily life. A further 28% had poor skills (Level 2) and could be expected to experience some difficulties. About one in three people were at Level 3, with skills that would enable them to cope with many of the literacy demands of daily life and work, but not always at a high level of proficiency. One in six possessed good to very good literacy skills (Level 4/5).
Level 1: very poor skills, and could be expected to experience considerable difficulties in using many of the printed materials encountered in daily life and at work. Level 2: some difficulties in using many of the printed materials encountered in daily life and at work. Level 3: the ability to cope with a variety of material found in daily life and at work. Level 4/5: good to very good literacy skills. In understanding the literacy skills, it can help us better understand the promotional tools and media of choice to use in promoting the product.
However, a more in depth study is required as national literacy skills and educational level is not a clear indication of specific regions. Usually it varies from rural areas (low literacy) of the country to urban areas (high literacy levels). 1.6 POLITICAL SITUATION Three political parties dominate the center of the Australian political spectrum: the Liberal Party (LP), nominally representing urban business-related groups; the National Party (NP), nominally representing rural interests; and the Australian Labor Party (ALP), nominally representing the trade unions and liberal groups. The Liberal Party / National Party coalition came to power in the March 1996 election, ending 13 years of ALP government and electing John Howard Prime Minister. The Howard government also has accelerated the pace of privatization, beginning with the government-owned telecommunications corporation. The Howard government has continued the foreign policy of its predecessors, based on relations with four key countries: the United States, Japan, China, and Indonesia.
A large amount of Australia's trading partner lies in the Asia Pacific region. At Proton, we have identified Australia as an ideal market to penetrate as it lies close to the Asian region. The country has shown strong political stability throughout the years and their friendly policies towards foreign direct investment (FDI) is another positive factor in our affirmation. The Australian Government has set up Australian Trade Commission (AUSTRADE) to facilitate in providing advice and guidance for overseas investors and joint venture opportunities, and helps put Australian businesses in contact with them. 1.7 LEGAL ENVIRONMENT IN AUSTRALIA In Australia, the law consists of: o Acts passed by the Federal Parliament acting within the scope of its powers under the Australian Constitution, together with delegated or subordinate legislation made under such Acts. o Much of the common or statute law of England that was received, still applies to Australia and remains unrepealed o The Australian common law, which developed from the English common law and is interpreted and modified by the Courts. Understanding of the legal environment is important in doing business in the host country.
There may be more flexibility or restrictions in the way we conduct the business. This could be true as not all legal systems are the same i.e. Islamic Law and English Common law may differ in many aspects. Proton may have fewer restrictions on advertisements in Australia as compared to Malaysia. Among the law and statutes that govern trade in Australia include the Trade Practices Act, Sale of Goods Act, Contract law and Car Traders Legislation. Part 2: ECONOMIC ANALYSIS 2.1 POPULATION Australia have a population of 19,546,792 (July 2002 est.) with a population growth rate of 0.96% per annum... While the Australian population is ageing, the trend is not nearly as significant as in other countries.
Australia has a relatively young population, the third-youngest in the developed world. It also has a relatively large immigration program which further lowers the average age... Australia benefits from the international flow of skilled labour through its solid economic growth and a skills-based immigration policy. According to the Bureau of Statistics (2002 est. ), people age 15-64 years represent 67% of the population (male 6,610,840; female 6,480,354).
The significance of this data to Proton is that, an estimate to the size of the target market for the Perdana V 6 can be achieved. Ceteris paribus, the age structure in Australia does give very positive signs of a huge potential market for our car. However, we should always consider other factor such as purchasing power before reaching a conclusion. 2.2 ECONOMIC STATISTICS AND ACTIVITY Australia was one of the OECD's fastest-growing economies throughout the 1990's. Australia commenced a basic reorientation of its economy more than 17 years ago and has transformed itself from an inward looking, import-substitution country to an internationally competitive, export-oriented one. Key reforms include unilaterally reducing high tariffs and other protective barriers, floating the Australian dollar exchange rate, efforts to restructure the highly centralized system of industrial relations and labor bargaining; improving and standardizing the national infrastructure; privatizing many government-owned services and public utilities; and fundamental reform of the taxation system, including the introduction of a broad-based Goods and Services Tax (GST).
2.3 GROSS DOMESTIC PRODUCT (GDP) Australia has shown steady growth in GDP throughout the past decade. The total GDP for 2002 stood at $528 billion. Even with recent slowdown of the world economies, Australia registered 3.6% real growth rate in 2002. This gives Proton confidence to enter Australian market as it has a record of being robust and strong economically. Australia has a prosperous Western-style capitalist economy, with a per capita GDP or purchasing power parity of $27,000 (2002 Est. ).
This is basically the total GDP on a purchasing power basis divided by the population at the same year which gives us per capita income. Though not a precise measure of individual income, but this information gives a comparison between the earning and spending power of Australia with another country. We take into consideration factors such as this in pricing and selecting the income groups to target. 2.4 HOUSEHOLD INCOME AND ITS DISTRIBUTION The average Australian is someone in their mid-thirties, who has a weekly individual income of $300 - $399 and a weekly family income of $800 - $999, according to selected averages from the 2001 Census released by the Australian Bureau of Statistics (ABS). The mean household size in Australia was 2.6 people and the weekly income generated by the average Australian household was $700 - $799.
Government improves economic equity in society by redistributing the nation's income. The government raises revenue through the taxation system which is then spent for the benefit of households. Some households pay more tax than they receive in benefits while others pay less tax and receive more benefits. These differences in amounts paid and received change the distribution of income. Knowing the household incomes and the distribution of income in the country allows us at Proton to answer questions on spending.
We can separate the population into upper class which are not affected with downturns of the economy and are a major market for luxury goods, middle class are somewhat careful with spending but still can afford the occasional luxuries and the lower income region which hold very little purchasing power. Proton Perdana V 6 targets the middle to upper income group ($998 per week and above), which makes the bulk in the distribution of income in Australia. 2.5 INTERNATIONAL TRADE STATISTICS 2.5. 1 AUSTRALIAN DOLLAR In recent times, the Australian dollar has risen in strength relative to the 'greenback's ince its low of USD$0.48 after the Asian Financial Crisis in 1998. It has reached a two and a half year high of USD$0.60 (February 2003). As of May 28 2003 the Ringgit stands at RM 2.50 per AUD$1.
The implication of the strong dollar is good for Malaysian exports into Australia and Proton Malaysia will stand to gain from high exchange rates. The strong Australian dollar is partially due to the high interest rates in Australia at the moment. Interest rates as of fourth quarter of 2002 are at 4.75%. The Reserve Bank of Australia (RBA) intends to maintain it through the first quarter of 2003.
This would mean that borrowing would be relatively expensive for Proton in Australia. Inflation in Australia is relatively low and the consumer price index (CPI) stands at 2.75%. Continuous low inflation rates ensure that wages and product's price do not fluctuate or increase at an alarming rate. 2.5. 2 TRADE RESTRICTIONS 2.5. 2 a Tariffs There has been substantial progress with tariff liberalisation in Australia and the Asia Pacific region over the past decade.
In Australia, tariffs on imported passenger cars and components will be cut to 10% from 15% in 2005. Australian Prime Minister John Howard said tariffs would be cut again in 2010, to 5%. Though Australia is committed to APEC's vision of zero tariff's by 2010, Howard believe the slower transition would help local automotive producers in a smoother transition. Economic relations between Malaysia and Australia would further be strengthen with the implementation of APEC's goals of free trade. Proton will benefit with the improve competitiveness and lowering of trade barriers.
The prices of Proton products can also be decreased yet ensuring better quality due to competition. 2.5. 2 b Non-Tariff Barriers Tariffs are, of course, not the only barriers affecting market access. The proliferation of non-tariff measures (N TMs) applied by trading partners including in Australia's major markets and competitors can significantly undermine, if not negate, the value of tariff reductions and bindings. Price controls, import licencing arrangements and technical standards are among the major forms of non-tariff barriers. APEC has also placed emphasis in addressing these non tariff barriers. Good progress has been made in addressing differing national standards, customs procedures, investment regulations, restrictions on business travel and other administrative and regulatory barriers.
Proton recognises the opportunities that presents itself with the lowering of trade barriers and wish to introduce more products in to Australia. 2.6 Technology and Infrastructure Australia has outstanding research and education base on automotive technology. Key automotive related research and development capabilities include: 1) Light metals technology 2) Composite materials 3) Car safety 4) Networking and data communications 5) Intelligent vehicle systems 6) Instrumentation However, since Proton does not wish to setup production lines in Australia, the focus would be on availability of infrastructure in facilitating the export of Perdana V 6 to Australia. There are a wide availability of ports for shipment of Perdana to Australia. The ports are located at Brisbane, Cairns, Darwin, Devonport (Tasmania), Fremantle, Geelong, Hobart (Tasmania), Launceston (Tasmania), Melbourne and Sydney. These ports offer storage and freight handling for the goods delivered.
A systematic link of highways also offer road transportation to inland areas. There are approximately 353,331 km of roads throughout the country (including 1,363 km of expressways). Thus, the road systems are very well established. Railway lines run right across Australia from East to West. There are 33,819 km of railway lines. 2.7 AVAILABILITY OF MEDIA There are approximately 25.5 million (1997, est.) radio receivers throughout Australia.
Radio usage is very comprehensive throughout the country. Television is another media that is widely used and available to the population of Australia. There are about 10.15 million (1997, est.) receiver of broadcast channels. The internet has seen a tremendous growth in Australia. Users have reached 10.62 million (2002, est. ).
The newspapers in Australia include The Australian, Sydney Morning Herald, The Australian Financial Review and The Herald Sun. The availability of these media with high literacy rates allows for Proton to advertise the Perdana V 6 to the Australian public. The more options available, the more effective the communication process. Part 3: COMPETITIVE MARKET ANALYSIS 3.1 THE PERDANA V 6- INTRODUCTION The evolution of the preceding PROTON Perdana 2.0 that is developed together with the British engineering maestro Lotus, after it's acquisition by Malaysia's PROTON (Perusahaan Otomobil Nasional).
In 1998, the Perdana V 6 was launched together with the Satria GTi 1.8 with the presence of our honourable Prime Minister Dr. Mahathir Mohammad and PROTON chief executive Mahal eel Tariff. This not only meant there will new cars to sell but this also marked a successful collaboration between PROTON with Lotus, and a better Malaysian product for the Australian people. All our models are in compliance with Vehicle Safety Standards (VSS) Department of Transport and Regional Services, the Australian Design Rules (ADRs), with full compliance with Australia's safety and environmental regulations. The Lotus Badge. 3.2 THE PRODUCT The Perdana V 6 sports a new and significant facelift and houses a 2-liter V 6 engine that is more powerful yet economical. The application of the Lotus know-how in the chassis design and suspension systems of the V 6 improved stability and handling altogether.
Safety features such as 'crumple zones', Side-impact protection, ABS (Anti-Lock Braking System) and Twin-SRS Airbags comes as standard fittings. With a price tag of less than AUD$39,900 for a full-sized sedan with 4-speed automatic transmission and the works, this is a great bargain. Presently, with improved perception on brand and product, PROTON plans to introduce the Perdana V 6 in Australia, to follow-up the over-whelming response received for the Satria GTi 1.8, Waja and JumBuck 1.5 (Malaysian model - Arena). 3.2. 1 RELATIVE ADVANTAGE The Perdana V 6 biggest advantage is that it incorporates the Lotus expertise in its development. Its biggest feature is its pin-point handling and performance. The 2.0 V 6 engine (model no. 6 A 12) requires relatively low maintenance and it produces around 115 Bhp, is quiet, smooth, reliable and fuel-economical.
Among competitions like Toyota, Nissan, Honda, and Hyundai, the Perdana V 6 stands out in terms of pricing; providing all the comfort, performance and value at less than AUD$39,900 not including the 10% GST. 3.2. 2 COMPATIBILITY The Perdana V 6 is generally targeted at segments ranging from ages 28-60; or young executives right up to a retired CEO. Australians are also seeking to turn away from their traditional line-up of 3 to 5 litre-gas-guzzling Fords and Holden, and are now observed to be picking up the trend for smaller, more fuel-economical cars with engine capacities from 1.5 to 2.0 litres. One factor leading to this is the inconsistent prices of petroleum in the country; prices change everyday. The high labour costs involved with car care and maintenance also calls for a car that's reliable and requires less 'attention'. Additionally, with a speed limit of not more than 100 km per hour, maintenance will be low for the Perdana V 6 and fuel economy is assured. 3.2.
3 COMPLEXITY Since Australians live a relatively simple lifestyle, some Japanese-inspired technicality may not appeal to Australians, especially the older segments. Arrays of buttons and fancy displays do not attract the market here, hence the 'ergonomical' Ford rules supreme. The Perdana V 6 is rather easy to drive, with its 4-speed automatic gearbox and laden with safety features such as Dual SRS Airbags, and ABS. Among the newer more radical designed cars in the market, the Perdana V 6 still maintains the traditional lay-out of a daily-use sedan. 3.2.
4 TRIAL ABILITY We predict good trail ability for the Perdana market. With a suggested price of roughly AUD$35,900 excluding taxes, road-tax, import duty and customary mark-ups, it bears less financial risk than competitors the likes of Toyota and Nissan in the similar engine-class. Designed together with Lotus, the Perdana V 6 sports a trendy yet elegant face-lift that significantly expresses achievement. Extremely versatile, the Perdana V 6 can take on many roles as taxis, a family car, and a limousine. Our new badge (emblem) plus the Lotus logo should not pose as a risk for social status. 3.2. 5 OBSERVABILITY The Perdana V 6 has a big advantage.
It is feature-packed, promising excellent handling and performance in a sedan. Further more it has an affordable price tag. However, in the car-market, the consumer always has to actually drive it to believe it. We could have road shows at shopping malls and other public attractions for its launching and 'educate' people about the car. Or other medias like advertisements and websites could be used to communicate our message to the consumer. We may even like to sponsor cars or represent racing teams in Australia, where performance of the Perdana V 6 can be witnessed by thousands of racing fans.
3.3 ACCEPTANCE We foresee little or no resistance in consumers accepting the Perdana V 6 and we predict the main factor leading to that is the affordable price. We anticipate fair to good response from Malaysians residing in Australia as permanent-residents. The main concern is that the awareness campaign required to communicate the Perdana to consumers may be a huge cost. We hope that over time, the PROTON brand name in Australia would be more establish than it already is among the locals; just like in the United Kingdom. Areas in colour are where the Perdana V 6 will be introduced. 3.4 THE AUSTRALIAN MARKET The three regions of Australia selected for the introduction of the Perdana V 6 are concentrated geographically on the east coast where road conditions are almost similar to Malaysia; Brisbane, Sydney and Melbourne where there are quite a number of established PROTON dealers, and our brand is recognized.
These are large cities with relatively dense population. Automobiles are also the primary transportation besides the efficient public transportation systems there. 3.4. 1 THE AUSTRALIAN BUYING BEHAVIOUR The average income of our target market should lie in the region of AUD$24,000 to $120,000 per annum. Typically Australians are of a spending culture or believes in instant gratification. They are also of a utilitarian nature. Australians rarely buy something they do not need and most purchases are quite justified. 3.4.
1 a PRODUCT USAGE o Daily common-utility vehicle. Suitable for normal to moderate road conditions. o Daily routine driving to and fro of workplace or the market. Alternatively suitable as a chauffeured car. o Appropriate for family outings and medium to long distance travelling. o Public utility vehicle. e.g. : Taxi, Police car, Limousines, and Company car. 3.4. 1 b PRODUCT FEATURE PREFERENCES o New and improved chassis design that incorporates the Lotus technology provides better handling and drive ability. o New 2-litre V 6 engine is quiet yet powerful. Responsive, fuel-economical, and low emissions.
Low to moderate maintenance depending on usage frequency and intensity. o Comfortable interior lay-out. Spacious with a touch of luxury from leather upholstery. Easy-to-read dials and meters. Longer seats adjusting tracks to accommodate tall drivers. o Full air-conditioning and heater. Glass tinting to preserve upholstery from the sun and heat.
4-Speed 'Intelligent' gearbox provides comfort with minimal shift-jolts. Safety features includes ABS, Dual-SRS Airbags and Side-Impact Protection. o Affordable price and ultra-flexible payment scheme. Fuel economic and low-maintenance. 3 years guarantee and after sales service. 3.5 DISTRIBUTION Directly exported to Australia, the Perdana V 6 will be available for sale at our main authorized dealerships, located in the Eastern Coast of Australia; primarily focusing on Sydney, Melbourne and Brisbane. We currently have more than 20 exclusive distributors in Victoria, Queensland and New South Wales, not including the rest of Australia.
Through these dealerships, our other products like the Satria, Waja, Persona (Wir a) and Jumbuck are sold, and have maintained reasonably fair profit margins and services provided by the retailers are satisfactory so far. Therefore we believe that product diffusion is not hard as the PROTON brand has been in Australia since 1997.3. 6 COMMUNICATION Like other PROTON cars, the product will be advertised on medias such as television commercials, auto magazines and the local newspapers. We also intend to put a few units on the road by giving them away in contests and lucky draws or other arising opportunity, just to increase the awareness of the locals about the Perdana V 6s' presence. Better awareness of the product can be possible if PROTON obtains the rights to consign Perdana cars to local cab companies as taxis; as lower fuel costs and maintenance should raise their profit margin. At least one to two test-drive units will be made available in top 8 dealerships for the first 5 months.
All other showrooms will be provided with at least 1 test-unit after the 5 months launch period. 3.7 PRICING STRATEGY For the Perdana V 6 which is entering the Australian market for the first time, we believe that a viable strategy for the pricing of this product is a slightly marked-up penetration-pricing strategy. The mark up allows for one or two price-skimming attempts, like we did for the Waja, before having to sell the Perdana V 6 at near-break-even prices. Currently, if all factors remains unchanged, AUD$39,900 would be the predicted on-the-road price during the introduction promotion period. At this price, the Perdana V 6 stands in a whole new category of PROTON cars in Australia, and we anticipate no inter-product competition with the successful Satria GTi 1.8. This full-cost pricing is also not susceptible to the mandatory 25% luxury-tax (below AUD$55,134) and deter any accusations of dumping.
The introduction of the Perdana in Australia and other parts of the world is PROTON's move to be internationally recognized and to achieve economies of scale. 3.8 THE COMPETITION At the specified price range and category, the Perdana V 6 has a few competitors. Among other available V 6 engine sedans models that are vying for a larger market share in Australia are: o Toyota Camry V 6 3.0 litre, 4-door. Price OTR: AUD$42,300 ono. o Nissan Maxima V 6 3.0 litre, 4-door. Price OTR: AUD$46,700 ono. o Hyundai Sonata V 6 2.7 litre, 4-door. Price OTR: AUD$39,100 ono. o Local favourite, the Holden Commodore V 6 3.8 litre.
Price OTR: AUD$35,800 ono. o Lastly, Japanese giants Mitsubishi and their milestone, the Magna V 6 3.0. Price OTR: AUD$38,900 ono. o All models in comparison here are fully equipped with the standard package of stereo, air-conditioning / heater, ABS, Power steering and Power windows, not forgetting automatic transmission and other basic accessories. Source: WHEELS Auto Magazine, July 2002, ACP Publishing Pte Ltd, Sydney. 3.9 MARKET SIZE The size of the Australian auto industry is still picking up with ample of opportunity as total imports of cars into Australia in 2002 exceeded AUD$12 billion. Topping the top 20 exporters of vehicles to Australia was Japan; whereas Malaysia stood firmly in the 19th spot with total car exports to Australia nearing the AUD$20 million mark. Best of all, almost 70% of cars sold in Australia are imported.
PROTON aims to penetrate and maintain a market share of more than 15% among other rivals in the same category. 3.10 GOVERNMENT PARTICIPATION The Australian automotive industry is repositioning itself as a niche global player. Its assets include its structural depth, its R&D, its access to light metals and its position in the region. The Australian government will assist the industry to invest in its global future and will help secure export markets, while maintaining the pressure for further improvements in productivity, quality and innovation. As player in the industry, PROTON will take advantage of these measures to establish its global future on a competitive, self-sustaining basis. The Government will continue with reductions of 2.5% per year in the automotive tariff until it reaches 15% in the year 2000, at which level it will rest until 2004, before dropping to 10% in 2005.
This pause will allow for an adjustment period the run-down to APEC free trade. The tariff has been phasing down at 2.5% per year from a level of 57.5% in 1987. Part IV: The Preliminary Marketing Plan 4.0 MARKETING OBJECTIVES To successfully market the Perdana V 6 in the Australian market, we will execute the similar strategy that we have employed for the Satria GTi, however there are slight adjustments for improvements. 4.1 TARGET MARKETS.
We have geographically targeted three regions to launch the Perdana V 6 in Australia; Brisbane, Sydney and Melbourne. These urban areas are where a car is most likely to be viewed as a must. These cities contain consumers who are employed, more radical, impulsive and have fair-to-good buying power. Demographic segmentation focuses on the age group 28-58 years. These segments should receive an average income of AUD$24,000 to $120,000 per year. The prospective buyer can be single or married; though the product would better served a family-man.
Education level in this segment are fairly high, therefore the expectations and beliefs about a brand or product is strong. These consumers hold respectable jobs and most likely 'know' what they want to buy. We predict first-year sales would be slow and any signs of profit to PROTON in that year would be a bonus. PROTON also expects to sell more than 2000 units of the Perdana V 6's in our 20 exclusive-dealerships in the 3 specified areas during is introduction year. 4.2 PRODUCT ADAPTATION Since all PROTON cars for the export market are assembled in Malaysia, The cars have to go through slight modifications for it to better serve the overseas market. Changes required for Perdana prior to shipment is: o EXTERIOR - A slight facelift would be necessary to distinguish these Australian-bound products from the domestic models.
- Different wheel design. A sporty front-grill design and new colours like Sultana Red, Victorian Blue and Spaceman Blue. - New bumper design. Regular spare tire is replaced by lightweight mini-wheel. This makes changing easier during a puncture.
- New ultra-bright halogen headlamps that provide farther vision in the dark. Sun-visors and rear spoiler. - Roof-rails to carry items that do not fit inside the trunk, like surf-boards and bicycles. - Optional tow-bar for boat-trailers or caravans. o INTERIOR - New 3-spoke leather steering wheel and dashboard design. Leather gear-knob, adjustable seats, and full leather upholstery adds luxury. - Single-disc CD player with built-in AM / FM radio and digital sound processor (DSP), together with a 150 W amplifier all standard for export version supplied by Blaupunkt.
- Safety harnesses for rear passengers to comply with the Australian Road Laws. Universal docks to attach a child-safety chair. - New super luminescent third-brake light. o MAJOR ADAPTATION MODIFICATIONS. - Export versions come with cruise-control, air-conditioning for the summer, and heating systems for winter.
- Higher protection windows-tinting for longer life of upholstery. - Standard tires are replaced with the Pirelli P 45 that performs better in Australia's road conditions. - Overall body length longer by approx. 300 mm for more cabin-space. o Support Service Adaptation - All Perdana V 6 for sale in Australia comes with a 3-year warranty for defects-rectification by respective authorized-dealers in their own workshops, and original PROTON spare parts. There will also be 24 hours emergency towing services for all PROTON owners. Full insurance-support for application and claims.
TOTAL AUTOMOTIVE PRODUCTS EXPORTS FOR AUSTRALIA 4.3 PROMOTION MIX Substantial as well as high-quality advertising will be required to create awareness and desire among consumers. If the advertising campaign fails, the Perdana V 6 will be nothing more than a potential market-failure. Australians marketers are highly creative will English. Most TV commercials in this country are creative, catchy and some humorous. Often there is also more than one meaning behind the commercial. We are targeting medias such as auto-magazines and local newspapers.
TV and radio commercials will be aired regularly for six to eight months. PROTON intends to do a road show to bring the product closer to the consumer. Contests can also be a way for PROTON to allow the benefits of the product to be 'rumoured' through word-of-mouth. During the introduction year of the Perdana V 6, special trade-in promotions will be carried out to attract prospective buyers; we anticipate good response during this promotion. 4.4 DISTRIBUTION & PRICE DETERMINATION The Perdana will Malaysia through Port Klang or West-Port and will arrive either at Sydney, Melbourne or Brisbane at their respective ports. An Ocean carrier does ensure safe arrival, however duration of delivery can be rather long.
Nevertheless, it is still the best and most economical method to ship a car out of the country. A larger quantity of units (depending on cargo capacity of the ship) can also be shipped when compared to an air carrier. The cars will be placed inside containers either the 20-foot or 40-foot during shipment, and properly secured so the cars would not move within the container. Charges are based on the dimensions of the Perdana V 6. Example, TransContinental Enterprise charges US$70 per cubic meter (m 3).
These prices reduce with bulk. And at a point where demand increases and shipment is needed in the thousands, we " ll hire ships especially for automobile-shipping with capacity exceeding 10000 units. Therefore the estimated cost of shipping to Australia for a car (excluding road-tax) is: o Dimensions of a Perdana V 6 (export version) = 11.5 m 3 o Freight charge (converted to AUD$) = approx. AUD$108/m 3 o Shipping cost = 11.5 m 3 x AUD$108 = approx. AUD$1250/car o Wharfage charge = AUD$30.50 per container 20-foot in length = AUD$61.00 per container 40-foot in length o Other shipment related costs (warehouse area rental and parking max. 1 week) = approx.
AUD$1050. o 15% import duty (price- AUD$35,900) = AUD$5385 per unit o Shipping insurance = approx. AUD$350 per car o Total average retail price of car = AUD$8075 + AUD$35,900 = AUD$43,075 o Introductory-period promotional price = AUD$39,900 (for 1st 1900 units) o Bulk discounts, special promotions and co-operations with Australian dealers to provide a better pricing / value for the market. 29) 0% 15% 6.70% 5% 15% 6.25% Transaxle's / Transmissions (87.08. 50) 0% 15% 8.75% 1% 25% 14% TARIFF RATES FOR EXPORTS TO AUSTRALIA (AFTER AFTA RATES = 10%) Pic: Port of Brisbane PROTON PRODUCTION LEVEL AND SEGMENTATION. 1997 1998 1999 Av. Growth rate IMPORT MARKET 3577.8 3851.8 4426 15% LOCAL PRODUCTION 2005.8 2200.2 2400 8% EXPORT MARKET 862.3 980.9 1080 12% TOTAL MARKET 4721.3 5050.0 5550 8% S. IMPORTS 256.9 287.0 311.0 10% Exchange Rates 1.35 1.60 1.54 (per FCS Australia's Country Commercial Guide FY 99) Estimated future inflation rate: 2.0% Import Market Share 1996/97: Japan 45% (A$2105.7 mill) Korea 17.4% (A$810.7 mill) Germany 12.7% (A$590 mill) U.K. 7.3% (A$337.4 mill) U.S. 7.2% (A$334.9 mill) 4.6 DEALERSHIP NETWORK For the first year, the Perdana V 6 2.0 will only be available at our selected 21 authorized-dealerships in the East-coast of Australia; Brisbane, Melbourne and Sydney.
The dots on the map of the East-coast of Australia show the locations of our Authorised dealers in those areas. These dealerships are small to medium scale privately owned businesses. All transactions in Australia run either by cash, credit cards and EFT-Pos (Electronic Fund Transfer). Prices of the Perdana are marked-up by the dealers by a margin of 5 to 15% depending on the demand. If demands are low then these dealers are responsible for generating the required sales; either by having promotions or offering discounts.
A new advertising campaign may also be necessary for re-positioning the product or alter attitude. Nevertheless, the Australian market is not faced with a Malaysian product for the first time; PROTON enjoyed the successful introduction the Satria GTi 1.8 that was jointly-developed with the Perdana V 6, together with Lotus. 5.0 CONCLUSION PROTON has invested substantial R&D efforts into styling, ergonomics, packaging, engineering design and analysis to ensure the success of its new concept vehicle. PROTON believes that ergonomics, such as passenger comfort, product manufacturability and feasibility of maintenance are key differentiators in the success of innovative car development. When Malaysia's national car maker Perusahaan Otomobil Nasional, or PROTON, first entered the Australian market in 1995, its executives were justifiably upbeat. In Australia, Malaysia's PROTON is taking on well-established foreign car producers such as Hyundai and Daewoo.
PROTON arrived in Australia with the same "winning formula"; cheap cars, a steady product, a proven track record at home and plenty of advertising. Australia has very well-established players such as General Motors (Holden) and Ford. And there is also the strong Japanese assembly plant operators like Toyota and Mitsubishi. That may soon change, however, as PROTON shakes up its overall market profile in its aim to become not a mass producer of cars, but a highly recognized niche player.
Mr. Rohan, who was appointed to the top post six months ago, said PROTON was under no illusions about the Australian market. Proton's new "image" relies heavily on the reputation already built up by one of its prize possessions -- the prestigious British sports car manufacturer, Lotus. For the first time since it acquired Lotus in 1996, Proton will this year be incorporating Lotus technology and parts into its vehicles. In a way, the economic crisis has actually helped put us on the right direction because now we are looking at the car manufacturing production surplus the world is in. It also makes more sense to be a niche producer of interesting cars than it is to be a mass producer.
Spearheading this push was the Satria GTi, a sporty 1.8-litre performance car which was launched in September 1999. Response has been inviting, and the PROTON brand was beginning to be recognized. Now, after more than 3 years, PROTON will attempt to re-enter the Australian market with the Australian-production Perdana V 6 2.0 litre. PROTON has a successful track record in Malaysia and exports to over 50 countries.
If we can get that message across, then the Perdana V 6 can potentially establish itself among the market leaders in Australia.
Bibliography
Publications 1) Cateora, Philip R. and Graham, John L. (2002), International Marketing, 11th edition, McGraw-Hill.
2) Edger P, Hibbert and Jonathan Liu. (1996), International Market Research, Blackwell Business.
3) Kotler & Armstrong, (1999), Principles of Marketing, 8th edition, Prentice-Hall International.
Internet Resources 1) Is the myth of the nuclear family dead. Viewed 26 May 2003.
web 2) Australian Social Trends 1998.
Viewed 26 May 2003.
Education - Educational Attainment: Literacy skills web 3) Australia's Legal System. Viewed 26 May 2003.
web 4) Languages of Australia. Viewed 26 May 2003.
web 5) Global income and income distribution. Viewed 26 May 2003.
web 6) Census reveals the average Australian. Viewed 29 May 2003.
web 7) Browse Australian Data of the Reserve Bank of Australia. Viewed 29 May 2003.
web 8) Australia's Economic Performance. Viewed 29 May 2003.
web 9) Stephen Long, Value of Australian dollar rises Viewed 29 May 2003.
web 10) Australian Social Trends 1996.
Viewed 29 May 2003.
Income - Income Distribution: Household income redistribution web 11) World Fact Book 2002.
web 12) Bureau of East Asian and Pacific Affairs. Viewed 29 May 2003.
web 13) Australian Trade Commission. Viewed 29 May 2003.
web 14) Car industry welcomes tariff decision. Viewed 29 May 2003.
web Bibliography Publications 1) Cateora, Philip R. and Graham, John L. (2002), International Marketing, 11th edition, McGraw-Hill.
4) Neal, C.M. et. al., (2002), Consumer Behaviour, 3rd Edition, McGraw-Hill Irwin.
web 15) Proton Homepage. Viewed 29 May 2003.
web 16) Proton Australia Homepage. Viewed 29 May 2003.