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Proton Holding Berhad or well known as Proton, a Malay acronym of Perusahaan Otomobil Nasional is the first Malaysian automobile manufacturer which has headquartered at Shah Alam, Selangor, Malaysia. Proton is founded under idea of former Malaysia Prime Minister, Tun Dr. Mahathir Mohamed in 1983 to manufacture, assemble and sell automobile vehicles and related products such as spare parts, accessories and other components. After two years of incorporated, Proton has produced its’ and Malaysia’s first car, the Proton Saga with technology and parts assistant of its’ shareholders cum technical assistant partner and supplier, Mitsubishi Corporation and Mitsubishi Motors Corporation and has been launched by Tun Dr. Mahathir Mohamed by 9th July 1985.Just around three and half years after launch of Proton Saga, it has achieved 100,000 units produced in January of 1989 and by 1988, Proton has successfully grabbed 73 percent of passenger car market in Malaysia. Beside Malaysia market, Proton Saga is the first model of Proton to enter international market such as United Kingdom. With technology support from Mitsubishi, Proton continued to develop new models for both local and oversea markets. After this successful of Proton Saga, Proton launched second car named Proton Wira which based on Mitsubishi Lancer platform and technology during 1993. Between 1996 and 1998, more than 220,000 units of Proton Wira were sold. The third model which relied on Mitsubishi technology is Proton Perdana that based on Mitsubishi Eterna was launched during 1995 for higher end market. The next Protons’ car which relied on Mitsubishi technology and platform is Proton Waja or as known as Proton Impian in UK which launched during 2001 and it is first car was designed internally by Proton itself.
After the acquisition of Lotus, a United Kingdom car manufacturer in 1996. Proton utilized its technology and engineering in helping it develops several new models to replace its old models. In 2004, with technology and engineering of Lotus, Proton developed its’ own engine called Campro which using by its first replacement model called Proton Gen-2. In 2007, Proton comes out with second replacement model called Proton Persona, a sedan model of Proton Gen-2 which both to replace Proton Wira. By 18 January 2008, after more than 20 years of Proton Saga being launched, Proton launched its’ replacement model of Proton Saga. By 2010, Proton once again has entered into talks with Mitsubishi Motors which is going successfully and led to another replacement model being produced, Proton Inspira which based on platform and technology from Mitsubishi latest generation Lancer is replacement model for Proton Waja.
The common strategy which applied into major modern businesses today is the marketing mix as known as 4Ps is contains four major groups, product, price, place and promotion. Kotler P., Armstrong G., Saunders J. & Wong V. (1999) defined marketing mix as a set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market. It helps the firm to influence its’ targeted markets’ consumer buying behavior which leads to achieve its’ marketing objectives. Consumer buying behavior is defined by Schiffman, K. and Wisenblit (2010), as a the processes and behavioral that consumer display in search, select, purchase, use, evaluate, secure and dispose of products and services that suffice their gratification corresponding to their expectation. According to Kotler P. (2002), a consumer’s buying behavior is influenced by cultural, social, personal and psychological factors. While consumer in buying decision making, there are some factors affecting them. It’s vital for a firm to understand the factors that influencing the consumer purchasing decisions in order to effectively utilize the marketing mix tools as consumer stimuli and lead to marketing objectives achieve.
In SPR (Stimulus, Process, Response) model by Svend H. (2010) (refer appendix A), marketing mix is one of the important elements in stimulate consumer buying behavior. In Proton, the marketing mix has been adopted as most of the businesses in the world did. Proton has been adopting Mitsubishi and Lotus technology in producing and including in its products as a part of product strategy to improve consumer confidence toward Proton’s products. In price strategy, Proton offering affordable price for mid-low income level consumer which lead to major sales of Proton’s products, for example, Proton Saga. Proton is selling its’ products locally and globally. For both targeted market, showrooms and service centrals have been set up at main cities for conveniences of consumers to obtain Proton’s products and services after sales. Especially for local market, large number of showrooms and service centrals has been set up in cities and towns of each state. In promotion strategies, there is numerous methods by Proton to promote its’ products such as showrooms sales person, mainstream media advertising, outdoor promotion events, internet advertising, participating in world class motorsport and so on.
1.2 Problems Statements
According to the announcement made by Ministry of International Trade and Industry in 23rd AFTA Council Meeting, in order to promote greater economic efficiency, productivity and competitiveness, Malaysia will be a complete free trade area effective from 1st January 2010, with the elimination of duties on over 2,000 tariff lines (Choy J.Y and Ng C.S (2011) cited Palaniappan (2009)). The elimination of the trade barriers will significantly increase the competitiveness of Malaysia automotive industry as the price of import cars from ASEAN Free Trade Area, AFTA member countries will be significantly decrease as well. Other than the challenges brought by the possible import car price cut down, the emerging of China and India automotive manufacturer yet possibly double the challenges in Malaysia auto market. This will be great challenges toward automotive manufacturers and dealers in Malaysia especially local manufacturers. Thus, local car manufacturer or dealer in Malaysia must have sufficient preparations to face the upcoming challenges.
Although Proton has granted with returning of Mitsubishi technology in developing new replacement models in order to increase its competitive advantages to face future challenges within Malaysia automotive industry. However, it is crucial for Proton to understand what are the factors that affecting consumer buying behavior while purchasing Proton car. It’s important for Proton to determine is its’ product factors are competitive enough to compete in future challenging domestic auto market, Is the car price of the Proton is main factor? Is the quality of Proton car is main factor?
1.3 Research Questions
Does the performance of the Protons’ product is the main factor that affecting consumer buying decision?
Does the price of the Protons’ product is the main factor that affecting consumer buying decision?
Does the after purchased risk of the Proton car is the main factor that affecting consumer buying decision?
Does the quality of the Protons’ product is the main factor that affecting consumer buying decision?
1.4 research Objectives
The main objective of the research is to study the factors affecting purchasing decisions toward Proton latest product. Specifically objectives:
To determine the association between product performance and buying decision.
To determine the association between product price and buying decision.
To determine the association between product risk and buying decision.
To determine the association between product quality and buying decision.
1.5 Research Significances
This research is being conducted in order to provide an understanding to local car manufacturer, Proton about the consumer buying behavior which is one of the key elements in Proton marketing strategies. It’s very crucial for Proton to take this understanding into account as it helps to understand better factors affecting consumer buying decisions and this also will helps Proton to examine if their current strategies which alliance with Mitsubishi in developing new car model is working well in attracting consumer. The determination of the factors which affecting the consumer purchasing decision in this study also will help Proton to develop best strategies in future competitive environments especially the implementation of AFTA policy. Other than this, through this study, Proton would able to identify its’ products attracting which types of consumer in making purchase. By knowing its consumer, Proton will be able offer the best product that market want and need. It’s important for Proton to face the future challenges in Malaysia automotive industry. Other than Proton itself, this study would be useful information for marketing researcher, student in their future research about consumer behavior on purchasing automotive products or automotive market related study.
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