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Business Pecularities of Tan Chong Motor Holdings

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Tan Chong Motor Holdings Berhad (TCMH) is a Malaysian company involved in different businesses activities including manufacturing, marketing of automobile vehicles, and automobile assembly. It was founded on 14th October 1972 and was listed on Kuala Lumpur Stock Exchange in 1974. Before the company was incorporated, its founders Tan Yuet Foh and Tan Kim Hor were distributors of small vehicles in the 1950s. Tan Chong Motor Holdings Berhad expanded to Cambodia, Laos, Vietnam and Myanmar as well.

In 2017, “Tan Chong Motor Assemblies achieved production of 1,000,000 Nissan vehicles from 1976 to February 2017” according to its official website. (3) In May 2018, Tan Chong Motor Holdings Berhad announced that its profits for the first quarter of 2018 ended at 31st March 2018 was RM4.25 million. According to Jaafar (2018), “Its earnings per share improved to 0.65 sen per share, versus a loss per share of 5.41 sen a year ago. TCM’s revenue improved by 4% to RM1.03 billion, from RM995.65 million in 1QFY17.”

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Nissan was “Established in Yokohama City, Kanagawa Prefecture Japan, in 1933, Nissan Motor Co., Ltd. currently manufactures vehicles in 20 countries and areas around the world, including Japan. It has grown to become a worldwide corporation with a diverse range of products – cars, trucks, forklifts, motorboats and even rockets.”

The four variants of the Nissan Almera come in three grades: E (five-speed manual RM64,887, four-speed auto RM67,809), V (RM74,627) and the full-spec VL (RM77,549). All are powered by Nissan’s HR15DE 1.5 litre four-cylinder that pushes out 102 PS and 139 Nm of torque at 4,000 rpm.

The Nissan Almera’s engine features Continuously Variable-valve Timing Control (CVTC), which helps the Almera claim fuel efficiency figures of 14.9 km per litre for the auto and 15.9 for the manual. The four-speed automatic is in fact a new unit – it’s 11% more compact, 15% lighter, has 32% lower friction and 12% fewer components than before.

This Nissan Almera’s ad starts by showing a girl having her breakfast while reading the newspaper at the same time. Suddenly, she saw an ad in the newspaper showing her husband and a text saying “Bebe, surprise in the car”. She walks outside and see the car which is Nissan Almera, then she checks the car from the inside and after that she finds her husband in the trunk of the car giving her flowers and a ring. The ad shows the features of the Nissan Almera and it emphasizes joy, love, comfortable, and happiness at the same time. Therefore, this ad uses rational and emotional appeal.

In this advertisement of Nissan Almera, Nissan shows the features of its car and how these features help families. It starts with showing the intelligent key of the car which has the lock, unlock, trunk, and panic alarm features. Next, it shows the big trunk which can handle up to 490 litres of luggage. After that, the ISOFIX child restraint system which enables the child chairs to be attached easily. The ad then shows the long legroom space which is the longest legroom space of its class. Next, the push start ignition is shown as well as the multi information system which includes distance to empty, current fuel consumption, average fuel consumption, and the outside air temperature. Lastly, the automatic climate control and the steering audio controls. Although this ad uses emotional appeal by showing a family, it is mostly uses rational appeal by showing the features of the Nissan Almera.

The budget allocated for the marketing campaign for Honda ER-V car is RM2 million. This will be divided into four main communication tools which are Advertising, Direct marketing, Sales promotion, and Personal selling. Throughout the year 2018, RM1,440,000 will be spent on advertising, RM180,000 will be spent on direct marketing, RM36,000 will be spent on sales promotion, and RM96,000 will be spent on personal selling.

Advertising will be done through four channels which are billboard advertising, TV advertising, newspaper advertising, and social media advertising. TV advertisement are usually the most expensive channel of advertising, therefore Honda will spent RM180,000 for each the first and second quarter of 2018 since it will introduce a new product and needs to advertise more. However, in the third and fourth quarter, the spending will go down to RM120,000 for each quarter.

Billboard advertising will cost Honda RM360,000 in total which is divided into RM120,000 for the first and second quarter each, and RM60,000 for the third and last quarter of the year 2018. Advertising in newspapers will cost RM120,000 in total, RM40,000 for the first and second quarter each, and RM20,000 for the third and fourth quarter. Lastly, Honda can use social media advertising to reach generation x and y. This will cost them RM3,000 per month every month of 2018 which will be RM48,000 in total.

Direct marketing budget will be RM180,000 divided into RM48,000 for newsletters, RM96,000 for telemarketing, and RM36,000 for brochure printing and distribution. For the sales promotion, RM36,000 is allocated which is divided into RM24,000 for competitions and RM12,000 for loyalty cards. Lastly, Personal selling which includes retail selling will be RM96,000 in total for 2018.

Evaluation and Control

Evaluation and control is required for Honda in order to measure the marketing plan and performance for Honda ER-V marketing campaign. Additionally, it is also essential for Honda to know what actions should be taken if the marketing objectives are not met.

To analyse the effectiveness of the marketing plan for Honda ER-V marketing campaign, it is necessary to compare the marketing objectives with the actual performance. In the first quarter of 2018, it is recommended for Honda to compare marketing objectives with actual performance month by month. Later, it can be measured year by year. For example, one of the marketing objectives for Honda is to achieve revenue growth of 15% per year for the next 4 years.

In order to do the evaluation and control, Honda will measure its growth year by year to see if it can achieve its objective. If it is growing slowly, Honda will have to do some changes in the marketing plan, such as increasing the marketing budget or focus more on direct marketing. Honda can measure the success of its new electric car ER-V by many ways including the number of sales, profits, the virality of the new car, customers’ feedbacks, and so on.

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