Read full version paper Micro-environment
Autor: jon 28 March 2011
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Microenvironment consist of the actors close to the company that affects its ability to service its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. Perodua has become a highly potential company due to its profitable microenvironment with low competing market, and increasingly wide demand in Malaysia as well as worldwide market.
The market size of Perodua is increasing throughout the year in Malaysia market since the company was established in year 1993. This is because of the good quality of the products and the low-price strategy has brought in a major source of generation-Y consumers to purchase its products. In addition, the market growth of Perodua is expected increase as population of Malaysia increases and the fuel price is still increasing. Currently, the company's has a very wide geographical distribution which it has many sales office throughout the whole Malaysia and it had also expand the market into the international market by having its sales office overseas. Therefore, because of the factors above, the company is very profitable. The major market segments for the Perodua are generation-Y who born between year1977 to year2000 who are now mostly youngster who are working and studying with outgoing personalities. Generation-X is those person that born in year1965 to year1976 who are now mostly have their own family and they more likely to look for the quality of life. And last but not least, baby boomer is the person who born between year1946 to year1975 and mostly are retired and now seeking for the leisure and comfortable life.
Perodua has variety range of customers from 3 different sources which consist of customer market, government market, and international market. Customer market is the major source of Perodua consumers including middle-class, working class. Middle-class family in Malaysia prefers low cost and fuel economy cars they could travel more with less fuel consumption. In addition, parents are willing to buy economy cars for children studying in universities and colleges due to convenience and safety purpose. Working class consumers are generally prefers Perodua because it is the most economy brand that could cut down their living expenses. Perodua also export their products to international market over 13 countries worldwide such as Indonesia, UK, Sri Lanka there have the demand for economic car as a result of increasing fuel price. Besides that, Malaysian government is also a minor source of consumer that purchases Kancil for police department and TNB for patrol and maintenance purpose. Perodua has covered more than 50% of Malaysian market. They have become successful brand as the largest compact-car maker in South-East Asia because they provide good service and high quality car with high technology and safety level that are internationally recognized such as dual-airbags, one-hour super service(OHSS). They had fulfilled the major market by making affordable-price, low maintenance car available to 80% of Malaysian from middle-class family. The overall product prices range from RM23000 to RM52000.
However, Perodua has few competitors in Malaysia. Proton savvy is the major competitor nowadays because it is the most fuel-efficient car available in Malaysia. Each kilometer consumes only 8sen. Savvy cost between RM 33549 and RM 43182 with a 1200cc engine. Proton's mission is to provide affordable car to customer and they focus on being the first choice of automobile products and services. However, its original mission was spoilt after the economic recession of 1987 when the Yen got stronger and Japanese parts cost more. Naza sutera is also another compact car with price range of RM35988 to RM39988 and 1100cc engine. Although it has a similar pricing strategy and technology with Perodua, Naza Sutera had lost in terms of design which is the major factor that attracts youngster in their buying decisions. Naza Kia objective is the commitment towards building an efficient after sales network and achieve customer satisfaction through quality, versality, and affordability. Toyota Yaris is one of famous compact car due to its famous brand with reliable performance and experience, safety features, modern design. Yaris equipped with a 1497cc engine and cost between RM52789 and RM100408 each. Some consumers may not be able to afford the price because import cars have higher price and tax amount than local brand. Toyota mission is moving forward because they believe there's no best, but only being better through the passion for innovation and discovery. Suzuki Swift is equipped with a 1490cc engine and cost around RM84146.50. Swift is a compact car with modern design and good safety features that focus on passengers comfortable. It consumes more fuel than Perodua's products since it have relatively higher weight. Swift is more suitable in targeting middle and upper class consumers. Suzuki's mission is to promote better living conditions and satisfy people's needs through creativity and provides ‘value- packed' products. Honda Jazz is an extra low fuel-consumption car with its 1497cc VTEC engine. It offers sporty looks and more space than any same level cars. Jazz cost around RM 103780 that caused it less competing than Perodua. Honda's mission is to be the leader in motoring industy. They aimed for being recognized internationally by winning awards worldwide. Honda and Toyota has relatively high market share due to its famous brand, reputations, and reliable performance and high technology. Suzuki has lower market share than Honda and Toyota. Naza Kia have higher market share than Perodua. Although Perodua have the lowest market share, it owns a great potential in future market, both nationwide and international as fuel and material price are increasing in the future.
The economic environment studies the factors that affect the consumers' purchasing power and spending pattern. The economy today is not very stable. Hence, it makes the spending power of the consumers especially the white collars have been reduced. The price of the petrol that had been increasing has increases the burden of the consumers. Thus, they are now looking for a more fuel efficient cars. The pricing of the Perodua cars are very affordable and it is a fuel economic car. Therefore, the consumers now are willing and able to buy the cars produced by Perodua because it satisfies their needs and wants. In addition, the economic environment looks at the income distribution of the consumers to determine their purchasing power. It consists of upper class, middle class, working class and underclass consumers. The Perodua cars are suitable for consumers from the middle class and the working class because of the prices of the cars is ranging from RM23, 000 to RM52, 000 and it makes it affordable for them who have a less purchasing power.
The demographic environment is the study of human populations in terms of the size, density, location, age, gender, race, occupation and other statistic. The Perodua Company is focusing on the demography study on the age, gender, location and the occupations of the consumers. It segments according to the elements above. The female consumers are more likely to drive a Perodua car because it is smaller in the size and it is easier to be drive especially for those who are working in the town that always caught in the jam. The Perodua Company manufactures the cars in a more sporty design and modern features to fulfill the needs and wants of the generation Y consumers. The car is also targeted for the working class people who are mainly the white collars or the newly graduates who are just started to work because it is more economic for them.
The political and legal environment consists of law and regulations, government policies, government agencies and pressure groups that will influence the ability of the company to serve the customers. Government had set quota to help protecting the local car's manufacturer which consist of the Perodua. Government also imposed higher tax to the import cars in order to help to increase the sales of the local cars. This policy helps to enhance the Perodua Company in terms of generating more sales and being protected from the imported for manufacturer. Apart from that, the trademark and copy right protection helps to protect the company's trademark of the brand names and the design of the cars so that it cannot be intimated by other competitors. Besides that, there also have policies to protect the consumer from being cheated by the company. For instance, the consumer's rights enhance the Perodua's ability to serve the customer better.
The technological environment is the most dramatic force and has a rapid change that provides new markets and new opportunities. It is very important staying technologically always because it can help the company to improve their product and have new market opportunities. The product development cycle also can be improved because nowadays the Perodua Company uses many machines in their field to help to increase the effectiveness of the production. This can make the company have a more effective and efficient market performance. In addition, the company can use the technology of the Internet to promote their product locally and globally. For example, advertisement. This can help the company to reach more consumers and increase the market opportunities.
One of the Perodua Company's marketing objectives is to increase their market share by increasing the promotion effort. For example, when there is a special occasion, the company will offer the different promotion such as Merdeka promotion. In order to expand the awareness of their brand, the company active in engage in sponsorship for other organization's contest. For example, the Perodua sponsored Viva for DiGi's 50/50 contest to drive more consumers' attention to Viva.
Another marketing objective of the Perodua is to provide a better service to Perodua's car owner for the purpose of strengthening the customer relationship. Currently, Perodua come out with the "One–hour Superservis" concept. This can create more value to the customer by providing a reliable service in a shorter time.
Besides that, another marketing objective of Perodua is to gain a better competitive advantage to place themselves in a better position in the automobile industry both locally and globally. The major competitive advantage of the Perodua is the car manufactured by them. This is because they can offer a car with a stylish design and modern features, fuel efficiency, safety and quality recognize with an affordable price.
On the other hand, environmental responsibility is also one of the marketing objectives for the Perodua Company. Product that manufactured by Perodua is fuel efficiency therefore it will reduce the consumption of the fuel resources. Apart from that, the emission of carbon dioxide will be reduced.
Marketing Strategy Audit for the Product and services
It is a division of a market into distinct group of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes. In Malaysia market, Perodua Company is going to segment it into four major parts which are geographic segmentation, demographic segmentation, psychographic segmentation and behavioral segmentation.
Under the geographic segmentation, Malaysia can be divided into four region which are north region, south region, east region and west region. Perodua can introduce the different products to satisfy the different needs and wants of the consumer in different region.
Demographic segmentation divides the market into groups based on variables such as age, generation, income and etc. Age also can be divided into several categories. For examples, consumer under 20years old – 34years old most probably are under the working class which means they just started to meet the working society. Where consumer under 35years old – 49years old most probably have their own family already. And purchaser under 50years old – 64years old is those who had already retired. Besides the group of age, we now look into the group of generation. Generation can be divided into baby boomers, generation-X and generation-Y. Baby boomers is those who born between year 1946 to year 1964 and seeking for the leisure life. While generation-X are born between year 1965 and year 1976. They are more focus on quality of life and are less materialistic. And the last generation is generation-Y who born in year 1977 to year 2000. Those consumers under generation-Y are more active, sporty and seeking for more adventure. Another group of the demographic segmentation is income where it can divide into 4 parts. Firstly, upper class consists of consumers who have a higher purchasing power. Secondly is the middle class. The consumer under this class is more cautious in their spending. Thirdly, working class is those person who has not much saving yet. And lastly, underclass consist consumers who have financial difficulties.
Psychographic segmentation divides buyer into different group based on social class, lifestyle, or personality characteristics. Some people have an outgoing personality who is more active and like to seek for adventures. While some people have an introvert personality is more conservative.
Behavioral segmentation divides buyers into groups based on their knowledge, attitude, uses, or response to a product. Most of the consumer will tend to seek for the benefits that can get when they purchase a product. They will look for a product that is more quality, convenient, service and economic.
Perodua market targeting is to target the consumer under generation-Y, who are under the age of 20 years old to 34 years old. These consumers will have the outgoing personality and more active. They will seek for the mini car which looks sportier. Perodua also target the consumers who are under working and middle class because the company's products are well known in selling the economic cars. And Perodua's product is focus on quality, economic and a good service which meet most of the consumer's satisfaction.
Perodua successfully position their brand names and brand's unique benefits in the mind of the consumers which the company produce economic, mini and compact vehicles. Therefore, consumer will have a good perception towards the Perodua products because of the company's performance, quality and pricing. They have a good and strong positioning strategy among for each segment as they can differentiate their marketing offer compare to the competitors. This can be proved by the Perodua's vehicle are selling in a lower price, fuel efficient, sporty design, world wide quality recognitions which is from the ISO and last but not least, it is comfortable.
The product of the Perodua Company is selling mini compact cars which are the specialty product. To date, the vehicles that have rolled out of the Perodua plant are the Perodua Kancil, Perodua Kelisa, Perodua Myvi, Perodua Kenari, Perodua Viva, Perodua Rusa and Perodua Perodua Kembara. The product objective of the company is to provide a new generation mini compact car for convenience driving with attractive and sporty design and features in a more affordable price and more fuel efficiency for the people. The product line used by the company is the combination line stretching where the company wants to achieve both the goals of the upward and downward stretching strategy. The current product line strategies are now meeting the product objectives of the company. Apart from the product, Perodua also provides service which is the car service. It has its own service centers providing the service to the Perodua car owners. They can enjoy special privilege when they send their cars to service at the Perodua service center. This is also part of the after sales service provided to enhance the company's product. The core benefit of the product is to provide the convenience for the consumers to travel. It is then added value through special features of each car, design and the packaging of the car, the quality of the car manufactured and the brand name, and this makes it the actual product. The delivery of the cars and the after sales service as well as the warranty that the company provided had improved the product becomes augmented product. The branding of the Perodua is currently very strong among the Malaysian consumers. This is due to the perception and feelings of the consumers towards the company and the confidence towards the products in terms its performance and the company's promise to delivery the specific sets of features, benefits and experience to the buyers. Hence the branding strategy of the company is successful. Therefore, it has a strong position in the consumers' minds.
Price is the amount of money charged for product and service, or the sum of all the values that customers forgo in order to gain the benefits of having and using a product and service. Price is one of the most important elements determining a firm's market share and profitability. Perodua using the low cost and low price strategy to compete with the others competitors in automobile market. Perodua had positioning itself an economics car producer in the mind of customers so that always sets its target price based on the customer perceptions of the product value. Perodua adopted good value pricing strategies, it offering the right combination of quality at a fair price. Perodua offer economic car price and assign value to other satisfaction such as quality, conformability, spacious, design, style and others. Besides that, Perodua use product line pricing strategy, Perodua offers several type of cars such as van, 4WD car and family car and each contain different models. For example, Kelisa divided into standard model, limited edition, special edition and Kelisa imago. Perodua use optional product pricing which offering to sell optional or accessory product along with the main product. For example, Myvi divided into standard model and premium model which contain full accessory.
Place represent a product or service that how the manufacturer will distribute to the end user. The Company must distribute the products and service at the right time and right place. The effective and efficiently distributing will meet the Company marketing objectives. There are three broad strategies for the distribution channel which is the intensive, selective and exclusive distribution. The Perodua Company chooses to selective distribution strategy. This is because the Perodua Company has a full wide coverage in all states for their products and services. The selective distribution which a producer select a limited number of outlets in a geographical area to sell it products. The advantage of this strategy is that the producer can choose an appropriate or best-performing outlet that with a well trained sales person and good services are provided. This strategy work best when consumers are prepared to shop around. This is because the customers have a preference for a particular brand or price and will search out the outlets that supply. The Perodua Company also provides a service center for the perodua car owner. So that it will give the car owner a convenient to service their car. In other way, the company gain a benefit for creates a customer value.
The most popular methods to promote a product are advertising. Advertising is conducted on TV, cinema, online, radio, poster that paste on the wall, press at newspaper, magazines and so on. Beside that, other methods also can be promotion, such as direct mail, point of sale display, sales promotion, and etc. The most suitable method the Perodua Company is through TV, radio and newspaper because this is a most popular way to achieve effective results. Perodua is well known selling the economic cars for the public, meanings that it has the lowest price compare to the others. For example, the company has made a promotion in year 2007 where giving the discount to all Perodua's vehicle up to RM7, 000. This encourage consumer feel more willing to buy our products.
On the other hand, another promotion for Perodua Company is the "One-hour Superservis". It is the guarantee that consumer will get their car serviced in one hour or it is totally free. And the procedure to get the service is very easy. And within seventy two hours customer will receive a follow-up call from the service advisor to ensure they have the satisfaction gain from Perodua Company. As part of the Perodua family, Perodua Service Centre mechanics are well trained and well equipped with the very latest technology. When a consumer's bring his or her Perodua to the service centre to be serviced, they will always get the top quality service and genuine parts that have passed Perodua's stringent quality control test. And the genuine parts are all come with a warranty. Other than that, Perodua has launched new genuine oil formulated specifically for Perodua cars, the latest top of the range semi-synthetic engine oil known as 5W-30 API SM. Besides the services promotion, Perodua Company also provides other types of
promotion known as Extended Warranty Programme. It is an extension of the manufacturer warranty. It is totally free for newly purchased vehicles. Not only have that, consumer can now accessed to the e-shop for Perodua Company's product. And there is a rebate of RM300 if consumer books a new Perodua online. Consumer can choose their favor of place and country to get their vehicle after made the booking. If the consumer is a government staff, he or she can enjoy the ‘Merdeka' promotion made by the Perodua Company which the consumer can get 100% loan and zero down payment. They can also benefit from the low interest rate and the free service up to one year.
There are few problems faced by Subway. The first problem is that there is lack of choices in their menu. Thus, Subway needs focus more on their product development. Maket development is the growth strategy that offers new or modified products to current market segments. For example, they can add more variety in their selections such as fish, chickens, sausages, and so on. They also can offer new products such as soups, French fries, mashed potatoes and etc. This helps attracting more customers with different wants and demands to choose Subway instead of other restaurants.
Secondly, we found out that there is always a shortage of breads or ingredients in Subway. This shortage usually happens in morning as they have special price for breakfast. Subway can solve this problem by enhancing their partner relationship management. They have to work closely with their supplier and build more profitable long-term relationships with them. By this, they can ensure that their supply chain run smoothly and supplier can supply the ingredients immediately whenever they need them.
Thirdly, pricing is an important factor in customer buying decision. Thus, Subway should pay more attention in delivering greater value and satisfaction to customers. This can be accomplished by offering more promotion to customers. As the target customers around the restaurant are mainly students and workers, they can build a long-term relationship with them by offering more promotion to them such as member cards, student prices, and so on. Furthermore, they can offer more value sets to customers such as family package, couple sets, kid meals, etc. Subway also can distribute vouchers to students and workers to encourage them to buy their products. Hence, this shows that Subway has more advantages over other restaurants.
Fourthly, people are complaining about the bad services in Subway. For example, customers always need to wait for a long queue to buy Subway sandwiches especially during peak hour. This is a serious problem faced by Subway as it frustrate the customers and reduce customer satisfactions. In order to solve this problem, Subway can introduce prepaid cards to customers. This method is an effective method to make payment transaction faster and thus reducing the waiting time of customers.
The key of winning target customers and building profitable relationships with them is try to differentiate the company's product compare to others competitors. Here, we would like to recommend the Perodua Company make their product differentiation. Such products can be differentiated on their features, performance, or style and design. For examples, company can differentiate their products on attributes such as consistency, meaning how hard of the metal for the vehicle can provide the safety. Durability, meaning how long is the period for the car to last for. Reliability of the car. And last but not least, reparability of the car.
Besides of the product differentiation, consumers may perceive a difference based on company or brand image differentiation. Perodua Company can develop a strong and distinctive image calls for creativity. A company cannot develop a good image to the public's mind just using few advertisements. The recommendation for Perodua Company is that they can put their brand around a famous person such as a singer, an artist, celebrities or a well known person.
Other than that, it is recommended for the Perodua Company to launch a different vehicle with the engine between 1500cc to 2000cc. It is because it could widen the market opportunities. Consumer will have more choices when they wanted to purchase a transport. Not only because of that, if Perodua choose to accept the recommendation, there will be more different target customer. For example, those who already retired would like to enjoy their life and own a more elegance vehicle. While the upper class consumers will tend to purchase larger and more comfortable vehicles than mini and compact cars.
Perodua is now accessing their export business this year, especially in Indonesia and Britain but the exporting volume has been relative small. Therefore, it is recommended that the company try to export the products not only to Britain and Indonesia but to the ASEAN market as well as the Middle East countries.
The microenvironment consists of the actors close to the company that affect its ability to serve its customer. In our assignment, we will discuss about the customers and the competitors. Customer for Perodua Company consists three types of markets which are consumer market, international market and government market. The marketing concept states that to be successful, a company must provide greater customer value and satisfaction than its competitor do. The company must gain strategic advantage by positioning their offering against competitors' offering.
Macro-environment is the largest societal forces that affect the microenvironment which are demographic forces, economic forces, technological forces and political forces. Demographic forces is the study of human populations in terms of size, age, gender, occupation and others statistics. Where economic environment consists of factors that affect consumer purchasing power and spending patterns. On the other hand, technological environment is the most dramatic force in changing the market place with many positive and negative effects. Technology provides new markets and new opportunities for the Perodua Company. Politic environment consists of law in government agencies and pressure groups that influences or limit various organizations and individuals in a given society, such as government policies, quota and tax.
The marketing objectives of Perodua Company are to increase their market share by increasing the promotion effort, to provide a better service to Perodua's car owner for the purpose of strengthening the customer relationship, to gain a better competitive advantage to place themselves in a better position in the automobile industry both locally and globally and environmental responsibility is also one of the marketing objectives for the Perodua Company.
Perodua divide their consumer markets into four categories which are geographic segmentation, demographic segmentation, psychographic segmentation and behavioral segmentation. After the segmentation, there are three major segments which are baby boomers, generation-X and generation-Y. The company targeted the generation-Y for their products. The products for Perodua are specialty products which are cars. They also offered car services for the consumer. The pricing strategy of the company is the product line pricing strategy which is more affordable for the consumer. The distribution channel is how they distribute the product to the end users. They have a wide distribution channel in Malaysia. The promotion activities of the company are very effective and it constantly comes out with the new promotion to attract more consumers. Therefore, through the efforts, the Perodua gain good position in the consumer's mind.
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