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ESADE MARKETING

PROFESSIONAL CHALLENGE

FOR GRADUATES

Marpro Challenge

ESADE MARKETING PROFESSIONAL CHALLENGE FOR GRADUATES

ESADE Business School has designed its MSc Programme in Marketing Management for talented young students who want to carry out a professional career in Marketing and Sales.

In line with the programme’s philosophy, this competition offers you the possibility of challenging yourself in an international contest dedicated to SEAT, a leading carmaker in the Volkswagen group.

If you are a recent graduate or about to complete your bachelor’s degree, you’re curious, hardworking, analytical and strategic, plus you have initiative and a creative spirit, this is your chance to demonstrate your best and be rewarded for it.

WHAT IS THE MARKETING PROFESSIONAL CHALLENGE (MARPRO CHALLENGE) ABOUT?

The future of our markets is more uncertain than ever, and numerous factors often imply increasingly faster changes. Moreover, the competitive dynamics in this context are even blurring the lines between industries. Faced with this complex reality, the role Marketing teams play has become more complex and challenging but also more relevant. It requires team members to have a holistic perspective of reality, that they be analytical as well as strategic, and that they hone their intuition, creativity, teamwork and communication skills, amongst others. The new Marketing Professional Challenge offers participants an ambitious, forward-thinking exercise dedicated to SEAT, always from a Marketing point of view. The attached case study serves as the starting point.

PRIZES

The first-prize winner is the candidate who submits the most convincing presentation and will receive funding to cover 100% of their tuition fees for the MSc in Marketing Management.

The second-prize winner will receive a scholarship for 60% of their tuition fees for the MSc in Marketing Management.

KEY DATES

Stage 1. Initial presentations due: March 16th, 2018

Stage 2. Finalists announced: April 13th, 2018

Stage 3. Final presentations due: May 4th, 2018

Stage 4. Prizes awarded: May 17th, 2018

PRIZES

1st prize: 100% of tuition fees

2nd prize: 60% of tuition fees

01 I MARPRO CHALLENGE


Participants will not be rewarded for submitting a huge compilation of data. Rather, they have to come up with the most convincing and well-grounded answer and demonstrate their ability to:

It’s now 2018. What challenges will SEAT face in the future?

01. Understand the challenge posed and the case-study

setting.

02. Focus on the key points, always from a holistic Marketing

approach.

03. Propose a justified research methodology to explore

the critical areas of analysis.

04. Conduct an in-depth analysis.

05. Come up with an answer that is:

06. Be creative and professional regarding the presentation

of their analysis and results. These have to be concise

and demonstrate good decisions regarding their

presentation content, making it simple yet attractive.

a. Understandable, relevant and convincing

b. Well-grounded

c. Ambitious and creative but also credible

d. Marketing- focused

e. Presented attractively

f. Company-specific

PRESENTATION GUIDELINES

There is no one specific structure required, as creativity is an important part of this competition. In addition, there is no single way to tackle the challenge. However, we suggest that your submission contain certain components to effectively communicate your ideas. Along with the initial presentation, you are required to send an introduction/motivation letter in which you introduce yourself and briefly tell us about your background and motivation for studying the ESADE MSc in Marketing Management as well as your goals after completing the latter. This letter should be no longer than two pages long. Also, please attach an updated CV/résumé. In terms of the PowerPoint presentation (15-20 slides), please make sure it contains the following:

01. Case study summary

> An explanation regarding the company’s situation > The key aspects from a Marketing point of view

02. Your analytical focus and methodology

03. The main findings regarding future challenges

04. Your recommendations for the company

05. The key lessons learned and obstacles.


CHALLENGE STRUCTURE

Stage 01

Initial submission> To participate you must submit the following documents

to: [email protected] no later than March 16th,2018:

> PowerPoint presentation (15-20 slides) according to the guidelines explained in the previous page> Letter of introduction/motivation (1-2 A4 pages)> CV > A one-page executive summary about your solution

(describe your proposed solution and why you feel it’s the best).

> All the documents submitted must be in English. The letter of introduction/motivation must contain the title of your presentation and personal details: Name(s) and surname(s), university studies, the university’s name, your personal email address, physical address and telephone number.

Stage 02

Announcement of the finalists: by April 13th, 2018

Stage 03

Final submission> The finalists have to prepare a 5 to 10-minute-long

video to present the major points of their solutions in a persuasive and professional manner. A file or link to a file with the video should be sent by e-mail to: [email protected] no later than May 4th, 2018.

> The audio or text included in the video must be in English.

> Any presentations or documents received later than the deadline indicated in the rules of the competition will not be accepted.

Stage 04

> The jury will inform the winners of its verdict by May 17th, 2018.

ELIGIBILITY CRITERIA

The MARPRO Challenge is open to anyone applying to the MSc in Marketing Management Programme: Recent graduates, postgraduates or students in the final year of their undergraduate programmes at any university. Candidates are allowed to participate at any stage of their application. However, to get the prize, they must have satisfactorily completed the admissions process for the MSc in Marketing Management.

ACCEPTANCE OF THE PRIZE

This Scholarship award is not compatible with any other scholarship, award or financial aid. If a candidate is willing to accept Marketing Professional Challenge prize, will have to reject other scholarships or awards granted.

More information about the admissions process is available at http://www.esade.edu/management/eng/admissions/application-process


ESADE CASE0251-CA-1-1

SEAT 1

Written by Professor Jordi Montaña andProfessor Isa Moll, December 2009

On the 15th of June 2009, a Briton, James Muir, took over from Eric Schmitt as the new President of SEAT. The handover took place several months earlier than originally planned. There were two exceptional features regarding Muir’s appointment. First, he was the first SEAT President who did not come from the VW Group (he was formerly Managing Director of MAZDA Motor Europe). Second, he was an expert in marketing and sales something that Michele D’Alessandro the SEAT’s Design Manager and Manuel Garcés (head of design processes and virtual reality presentations) interpreted as a strategic change in the relationship between the design departments to which they both belonged and the marketing department.

PRODUCT DEVELOPMENT AND DESIGN WITHIN SEAT’S HISTORY

SEAT [La Sociedad Española de Automóviles de Turismo – The Spanish Saloon Car Company] was founded on the 9th of May 1950. It employed FIAT’s technology, which was needed to begin turning out the first vehicles in Barcelona’s Free Port. The 13th of November 1953 was a historic day, marking the first SEAT – the 1400 model – to come off the production line. The only difference between it and the equivalent FIAT model was the badge on the front.Given the small number of vehicles in Spain in the 1950s, SEAT sought agreements with independent coachwork makers such as Pedro Serra, who created various kinds of coachwork for the SEAT 1400 and SEAT 600 models that were symbols of Spanish industrialisation in the 1960s and mass consumption by the country’s middle class. In the 1960s, SEAT set up its Training Centre, which was to play a key role in the company’s subsequent quest for technological independence. Furthermore, SEAT’s began to design and build its vehicles with slight modifications to FIAT’s models. This was the case with the SEAT 850, the 4-door version of the 850, and the 1430.

1 Professor Jordi Montaña and Professor Isa Moll prepared this case as a basis for class discussion and research rather than to illustrate the effective or ineffective handling of a business situation. The authors would like to thank Michele D’Alessandro, SEAT Design Manager, and Manuel Garcés, Responsible of Design Processes and Virtual Reality of SEAT, for their help and for providing useful information.

2 Research and Development Group Design Management

Following agreements reached with the EEC, European Economic Community, in the 1970s regarding exports and the setting up of new industrial groups, the company decided to establish a Research and Development Centre to gain greater technological autonomy for its FIAT-based products. SEAT’s R&D Centre designed the 1200 SPORT, the handiwork of Aldo Sessano, which gave the company a unique position among car makers in Spain, making it the only firm in the country capable of developing and manufacturing its own vehicles. José Mª Martínez Serra was the head of design and development during that stage of the company’s history. In 2009, the Forschung und Entwicklung Konzern Design Management together with staff from the Car Studies Department were to form the core of what later became SEAT Design, which was sited in the Freeport. The Car Studies Department had created the SEAT 133 and four-door 127 models many years earlier.

SEAT went through one of the trickiest moments in its history in the early 1980s when FIAT put an end to thirty years of technical collaboration. SEAT decided to continue on its own and thus became a wholly Spanish manufacturer. The directors’ strategic plan was clear: to use its own technological resources to create new models and to seek co-operation with a strong car manufacturer in the medium term. In 1982, the company took on a new corporate identity in keeping with its size, structure and plans for the future. SEAT launched new models: the TRANS van, a spin-off from the FIAT PANDA, and the SEAT RONDA, which replaced the RITMO. The Technical Centre began to work on the design and launch of the first wholly SEAT model. The Italian designer Giugiaro, the German engineering firm Karmman and Porsche collaborated in the new project. This gave rise to the IBIZA in 1984, considered SEAT’s most charismatic and best-selling car ever. The PANDA became the MARBELLA and a saloon version of the RONDA was also launched and dubbed the MÁLAGA.


It was essential that SEAT found a new industrial partner and its search brought it into contact with VOLKSWAGEN and led to commercial and industrial co-operation. At the end of 1986, VW became the majority shareholder in SEAT with a view to building a brand-new factory in Martorell. The new plant set out to adopt the most avant-garde standards in the industry. To this end, it hired young designers and technicians, built new facilities, and introduced new processes and technologies. The aim was to ensure continuous modernisation of the range and to develop the first project designed completely within the orbit of the Volkswagen Group: the TOLEDO. The model employed an advanced design that was the work of Giugiaro. The groundwork for the future model was laid by two concept cars by the same Italian designer - the PROTO T and TL.

SEAT Design began its internationalisation in 1993 supported by Vicente Aguilera, head of SEAT’s Technological Centre. The first initiative was a styling exercise for a futuristic 2+2 coupé featuring a panoramic glass sun roof. Six months later, the convertible version of the CONCEPT T was presented. The vehicle accentuated the Mediterranean styling that typified the SEAT marque.

The models ALHAMBRA and AROSA models were the first fruits of collaboration with the Volkswagen Consortium. The second design generation came with the TOLEDO and LEÓN, marking a new concept of style and image that would become hallmarks of the company. In 1998, SEAT presented the BOLERO prototypes for a luxury berlina and FORMULA, a sports two-seater.

The following year marked the international presentation of the SALSA concept car, designed by Walter da Silva. This revealed a new style and concept that was wholly developed by the company’s Technical Centre and was part of the “SEAT auto-emocion” campaign [a Spanish play on words expressing cars that evoke a strong emotional response]. This pitch, together with sporty cars was to be an integral part of the marque’s new models.The Design Centre celebrated its 25th anniversary in 2000. This marked the third generation of the IBIZA model and the second of the CORDOVA. The EMOCION and TANGO concept cars incorporated the latest technological

3 A small seaside town some 25 miles south of Barcelona.

advances springing from the information society.In 2006, SEAT’s new Design Director, Luc Donckerwolke, transferred the Design Centre in Sitges to cutting edge, ultra-modern premises in Martorell planned by the same people who had worked on the Design Centre. The same year would see the prototypes for the IBIZA VALLIANTE, and the following years the ALTEA FREETRACK, TRIBU (2007), BOCANEGRA (2008) and IBZ (2009), foreshadowing SEAT’s future range.

In 2009, the SC version of the Ibiza won the “Red Dot Award” in the product design category for its outstanding quality, while the 5-door version of the Ibiza won the “ Best of the Best ” prize for its high-quality design. The highlights of the new model, which marked the beginning of the “Arrow Design“, were the car’s low headlights and radiator grill, which gave the car a dynamic, sporty look. The side panels formed slanted, swept-back “shoulders”, with attractive wheel arches. The vehicle was the first vehicle of a series created by Luc Donckerwolke during his time as SEAT’S Director of Design. The most popular model of the Spanish marque received two awards in a ceremony held in the Theater Aalto in Essen (Germany).

SEAT’S DESIGN RESOURCES

The SEAT Design Centre (SDC), inaugurated in October, 2007, was a singular building at SEAT’s Martorell plant. It covered 5,600 square meters and was one of the most modern, functional design centres anywhere in the world and the only one of its kind in Spain. It was created by and for designers and brought the whole design process under one roof. This helped the company capitalise on synergies between the R&D and design departments to foster ground-breaking design, which was one of SEAT’s hallmarks.

The centre had the most advanced technology and equipment to facilitate the creative work, ranging from the first sketches to 1:1 scale design models. The whole facility was thought out and built to serve the creative processes taking place in its interior. Functionality and confidentiality were two overriding considerations in the building’s design. A series of Mediterranean-inspired screens ensured excellent natural lighting that made for a pleasant working environment and cut energy consumption. It also meant that nothing could be glimpsed from outside, ensuring new cars were kept a closely-guarded secret until presentation day.


The SEAT design team played a very important role in building’s design, conveying their needs to the team of architects and engineers in charge of construction. The building needed a unique structure given the special nature of the work carried out within.

That is why spaces were split into five main areas covering the various facilities and activities housed in the two-floor building: (1) Ideas area (design): exterior and interior design, Colour and Trim, CAD and Engineering Design; (2) Creation area (construction): interior and exterior design, workshops, paint shop, model store, materials and services; (3) Virtual Presentations area: virtual reality room; (4) Physical Presentations area: a central 430 square metre courtyard; (5) Design and general management area.

All the work areas were laid out around the courtyard, which performed two functions. The first was to ensure all work spaces of work had abundant natural light. The second was to offer a suitable stage for the presentation of the marque’s future models and evaluate the car’s forms, colours and finishing under natural lighting.

Both the courtyard and the various workshops on the ground floor were always visible from the windowed offices at the top of the building, where the design, and general management departments were sited. These occupied a strategic position in the building, giving them a direct view of the various prototype development stages and hence strong control over design and production production processes.

The workshops on the ground floor occupied a lot of space but the exhibition areas next to the courtyard were also important, providing highly flexible areas for the presentation of prototypes. The building was fitted with cutting-edge technology: CAD, simulation and calculation tools and advanced virtual reality systems (which allowed viewing of the model being worked on by several people at any one time).

The Design Centre had a surface area of 5,600 m2 – large enough to house a hundred highly-qualified engineers, designers and modellers from around the world. The facility not only underpinned the design of SEAT’s product range but also provided services to the whole Volkswagen Group.

“ At the moment, we have about 65 staff. These cover all the centre’s tasks: design of exteriors; design of interiors; colour

and trim; model workshop; design management and CDO (which generates mathematical data)”, explained Michele D’Alessandro, SEAT’s Design Manager of SEAT.

There were sub-areas for each of the main concepts, for example, for interior design there were people who dealt with the seats, steering wheels, knobs, the electronics, etc. This covered not only the exterior design of large surfaces but also details such as grilles, mirrors, wheels, etc. The whole vehicle was dreamt up in the Design Centre.

Outsourcing was used at certain moments, especially clay and virtual modelliing and CAD. They did not have external designers - as had been the case with Giugiaro - but there were exchanges between the Consortium’s design centres.

“We also had staff exchanges with Audi, VW and other design departments in the Consortium that brought new blood to the projects. A designer comes here and we send one of ours there”, said D’Alessandro.

“In the first project stage, we always use other Consortium design studies to provide new ideas”, noted Manuel Garcés.

“When we begin a new project, we run an internal competition. Several people may take part in the contest and we also ask other centres to come up with ideas. We have worked with proposals for Audi, Lamborghini and VW. This ensures fresh thinking. The marque models tend to follow the package and official guidelines while the others are a bit more free. It’s not that they ask us for revolutionary designs. Rather, it’s that you are always doing the same kind of work here so working on a proposal for others is an opportunity to let your imagination soar”, said D’Alessandro.

In the Design Centre there were three macro-areas: product maintenance (centred on the models that were already on the market); the design of products for launch in the short and medium terms; a group carrying out concept-design work and that adopted a longer-term vision, often not linked to existing products. The last group focused on the search for new solutions, new forms, new trends.


THE PRODUCT DEVELOPMENT PROCESS “This is a continuous process. Every model has its own life cycle. In the car industry, life cycles usually last around seven years. That has an impact on all the company’s work because small modifications are made to vehicles each year and there’s a complete face-lift after four years. For example, this year we have given the SEAT LEÓN a face-lift. This usually happens more or less halfway through the life cycle. The search for information is begun at various levels for everything that will be needed to design and build the new model”, stressed Michele D’Alessandro.

There was a system for co-ordinating all the various levels of SEAT departments, setting the targets and milestones at 48 months before launch. There was a lot of documentation provided by the marketing and sales departments that analysed how a given model was performing, what worked well and what badly, SWOT analysis, customer profiles and whether these matched what was planned when the car was designed.

“There is a fair amount of financial control to ensure the project meets profitability targets”, added Michele D’Alessandro. “Design is naturately involved. About the product at the beginning is the Technical Centre and later are the departements of manufacturing and quality.”

“The design process is always the same”, Manuel Garcés chipped in. “We look into these stages again and again and demand a little more each time round. That is to say, we initially make volume models in which the proportions are the important thing – they don’t have headlights or tail lights because there is no need to look at them at this stage. Adding such details would also be both expensive and complex. So we focus on the car’s volumes. Once we have refined the volumes, we start looking at the headlight and tail light assemblies. In the interior we initially represent the electronics with drawings placed on the dashboard showing the radio, instruments and so on. As with the exterior, we initially just focus on the volumes.” “We begin with stickers”, went on D’Alessandro, “and the car begins to take shape as things go on. In the interiors, you can sit down and evaluate the ergonomics and all the details.”

“As I said, they are design loops”, noted Garcés. “The concept is the same you keep moving forward. As time goes by, we start working on the details. The process is very carefully planned and at every stage there are written milestones that

have to be reached to attain the set finish standards and viability targets.”

This was part of the design but every area in the company had its own tasks to perform in the 48 months before product launch. Design approval was simply one of the milestones set within the broader project.

“Let’s say that it is a small part of the whole. It’s the bit where you visualize the product but other departments also have important tasks to perform”, Michele D’Alessandro observed.

“The design is not usually the thorniest issue at this stage – rather it is financial viability of the design”, added Garcés.

Extensive project documentation was produced when the design was approved. The project milestones were the same for all VW marques forming part of Consortium, wide standards to ensure projects were fully comparable. This allowed everyone to know exactly which stage a project is at. When a project was presented, everyone knew what to expect and what decisions had to be taken.

THE CYCLE PLAN

The company had what they called a cycle plan, which covered planning for all the cars that would be launched up to 2020. In 2009, SEAT had four lines of products: the IBIZA, the LEON/ALTEA, the EXEO and the ALHAMBRA. These were four macro-platforms to which at that moment in time a smaller platform was to be added. Each line had its own life cycle and launches. The project plans were drawn up in accordance with the launch schedules.The product line launches were staggered to iron out peaks and troughs in the workload. The cycle plan was clearly intended to strike a balance between development, manufacturing and launch activities so that the market could absorb the vehicles made. The cycle plan was reviewed every year and adopted a five-year horizon.

“There are many changes during the year because new things are added or old ones are cut out. The market changes constantly and you need to adapt”, pointed out Michele D’Alessandro. “There are also new points of view and changes in the direction. The target is to sell and that calls for different strategies.”


THE ROLE OF SUPPLIERS At the beginning of the project (at least forty months before market launch) a meeting is held with suppliers to look at what technological advances can be made, for example, fitting headlights with LEDs and looking at these in the context of budget targets for each model.

“They can design many things but they have to ensure it is within the target. Each marque has its own target and designs must take account of that. Our target is lower than for other Consortium marques and therefore we have to be cheaper without lowering quality”, Manuel Garcés commented.

“The suppliers play an important role in innovation matters. They are experts in their areas and can give technical or environmental solutions”, added Michele D’Alessandro.

“They play a big role in assessing viability and this leads to technical solutions that can make you change the design”, stressed Garcés. “For example, a few LEDs could be used instead of a single powerful bulb in headlights. But one thing is providing a line of lights for design purposes and another is using a traditional bulb to cast a strong beam.”

The meeting with suppliers was a critical point in the design quest. SEAT technical staff kept in daily touch with them to ensure the chosen designs worked and were practical. One of the key suppliers was the Consortium itself, which provided the chassis for each of the lines. The company’s strategy was to use common chassis and other major components for the various marques, for example, the LEÓN chassis was the same as that used for the Audi A3, Skoda Octavia and the VW Golf.

“We have to differentiate as much as possible while using the same chassis. First, we start with the base vehicle and then come up with a package to define the product we want, that’s the basic idea. In SEAT we come up with the hats [the VW jargon is “huts” - hats in German]. We design the hard points on the sub-frame, engine and electronics, safety points, package and so on. Those are our hard points. The engine position determines the bonnet, position of the windscreen wipers, steering wheel, the seats etc. For example, the ALTEA and LEÓN share the same base but a LEÓN driver’s sits in a laid back position whereas in the ALTEA he sits much more upright. This means the LEÓN

has a lower roof than the ALTEA. It is a bit of squeeze for back-seat passengers if the former model but there is bags of leg room in the latter vehicle. So we have a chassis with hard points and a package that we want to build on it: a seven seater, a five seater, a four seater or a coupé. We start drawing using this initial information, that is the concept stage. The technical side influences our choices. It’s a bit like a funnel – we deploy all our creativity at the beginning of the process and technical considerations tell us where the hard points should be. But as the months go by, the creative input drops off and the suppliers and technicians take over”, explained Michele D’Alessandro.

THE DEVELOPMENT PROCESS, AN ON-GOING NEGOTIATION

At the beginning of the design process, very little attention was paid to viability criteria beyond those imposed by technical and legal regulations. This allowed designers to come up with radical concepts to breathe life into the new model. As time went by and the design began to take shape, the so-called hard-points came into play, marking the limits that the design had to meet.

“We are never free to do just what we like because it makes no sense to design something that we know will never be built. In these intermediate stages one tends to haggle over the specifications – ‘I can get 5 mm.’, ‘Well, I need 15 mm’ and so on. Design and technical considerations need to be squared for the project to progress. We think of this process as a wheel. There are stages that are reiterated ‘n’ times until we reach agreement on the model. There is the physical modelling stage, a mathematical modelling stage and between the two we use successive renderings to move back and forth between the physical and virtual designs. That is to say, it is very important that the physical and the mathematical models throw up the same answers at the end of the process”, said Manuel Garcés. “The physical models serve to evaluate the design and the virtual models so the designers can work with the technical department. The virtual models are our link to the other technicians of SEAT – some 950 people.”


The physical model and the mathematical model are worked on at the same time. When a surface was defined, it was turned into a physical model on the lathe. When the physical model was altered or something new was added, the change was digitalised and a three-dimensional scan made of the surfaces. The model surface was the communication channel in the product development. This was the only way of allowing others to see what the designers were doing and to see whether it would work.

“We make the aerodynamics calculations for the vehicle. These inputs are needed because poor aerodynamic performance means higher fuel consumption and worse road holding. Then there is the matter of weight to volume. If you get that right, you can lower fuel consumption and CO2 emissions. These inputs are part of the ecological criteria that our now thoroughly integrated in our models. The mathematical model enables these figures to be calculated with reasonable accuracy. In the past, we would make a fantastic model and send it to the technicians but the resulting car had nothing in common with the design. The new technologies allow us to get the technicians’ input within roughly two weeks of sending them the design. Following the ‘funnel principle’ I mentioned earlier, we know the first stage predicts about 60 % of the outcome and this rises to 70% or 80% a bit further on. We finally end up in complete agreement. It comes to haggling over the specs until we strike a bargain. Everyone does his utmost to make the project a success”, added Manuel Garcés.

‘As time goes by, you begin to come down to millimeters. In the beginning, you talk of 10, 20, 30 mm but as the design begins to approach its final form, you start discussing the target figures. Maybe we are delighted with what we have designed but if it is a Euro too expensive, it’s changed. That’s because a Euro here and a Euro there adds up. If everyone went about it like that, it would be a disaster. So you have to horse trade – ‘I’ll accept a Euro here if you trim one off there’, said D’Alessandro.“When we speak about a million cars, a Euro makes a difference”, stressed Garcés. “If it’s €5, there’s an argument and if it’s €15, the project is a dead duck”.

The car’s target price was set by the commercial side, which had to decide market segment trends and forecast the product’s penetration in order to come up with total sales volume for the four years following launch.

“Yes, clearly, the price is estimated four years earlier but this is a process, the price is not set then. The retail price is set months before the launch”, D’Alessandro clarified, “but to do the profit calculations, you need to set a price target four years earlier. Where do you get that from? Well, you look at a current car and its competitors. In the case of the LEÓN, we asked ourselves what price the Megane and the Opel Astra would be pitched at. There also has to be a certain price logic among the Group’s marques – this is something that is already well-established. Target price and sales volumes have been set. A profit target is also set by the Consortium and that tells you what you can spend. That’s how the VW Group works. It is called the top-down target. It is defined by senior management in each department. It determines how much the car can cost, material costs, manufacturing costs, investment, development expenses. All these things are established at the outset. The main parameters are revenue and profitability and these determine all the others”.

The design process continued in a cyclical fashion, maintaining the relationship between the surface model and the mathematical model until the milestone was reached and the two models were (in theory at least) in total agreement. However, in practice, small changes needed to be made at the last moment.

“When we speak about milestones, we mean “freezing” the design reiteration process”, explained Michele D’Alessandro. “For example, we perform the first cycle at least 40 months prior to launch. We call this the PR0 stage, in which we have ‘n’ models. There are usually 3 or 4 models, which are then worked on for a further six more months, which is when the PR1 milestone is reached. Two models are then chosen from the four original ones”.

“We work on the interior and exterior”, continued Manuel Garcés. “In this first stage, we speak about architectures. You can have both different architectures and designs. You might have two options: the same windscreens and maybe even the same side windows because that’s the way things are but the remaining components might be different.”


After six months, another milestone was PR2, when one of the two designs chosen at PR1 was sent to the technical staff so they could add their requirements.

“At this point, the designers step back a little but make sure the technical boys do not ruin a beautiful model”, said Manuel Garcés ironically.

“We try to ensure that technical considerations do not adversely affect the styling.That is why we retain control until the design is frozen. That happens two years before launch. That is when the designers take a back seat. But from 48 to 24 months before launch, we are the one’s who have the final say”, continued D’Alessandro.

Final design approval – ‘freezing the design’ in SEAT jargon - was a very important point in the process. At each of the milestones, Luc Donckerwolke, SEAT’s Design Director, presented the design to the Executive Committee, which discussed the project and the various alternatives.

THE MANUFACTURING STAGE

The industrialization and manufacturing stages began once the Executive Committee had accepted the final design together with suggested modifications. That was when prototype testing started to ensure quality targets ware met. Up to then, the models were static and then on work began on prototypes featuring the final design. The technical departments took over the leading role, with the designers work henceforth confined to minor styling changes.

“Fewer and fewer changes are being made in the new processes because we now try to ensure the technical side is part of the design process from the outset. We know how far we are off the targets in each stage and the technical staff knows just where we are. The idea is that when we reach this stage, the designers and technical staff will have reached broad agreement and so the scope for changes will be limited. There may still be changes because of shifts in either the target or the vehicle itself but these have to be small ones”, Manuel Garcés concluded. “The big surfaces are ‘frozen’, the discussion only concerns details: the grille, the rims and other items, especially the interior, D’Alessandro went on. The battle over profit-related issues starts then. ‘Can we allow a €1.5 increase in price, what does the market think and is it willing to pay more, will

it boost volume?’ If one can’t command a higher price or greater volume, the change isn’t made. Such points are constantly discussed but they impinge less on the design.”

The colours and fabrics still remained to be decided and these did not need to be ‘frozen’ at such an early stage. That was because colors and textiles could be worked up fairly fast so there was more time to define the upholstery ranges.

MARKETING

“The Marketing Department is something that we know as clients and as suppliers. In the design process they give us market analysis, looks at how the company can boost penetration and position its products (i.e. sports car, family saloon, cheap run-around, luxury car)”, explained Michele D’Alessandro.

The marketing strategy bore in mind the marque architecture, which the Consortium decided.

As Manuel Garcés noted, “They scribble a few lines stating the position we should adopt: we have to be the best in class on such and such a score or among the best three. Usually, it is something on the lines of the best in class in fuel consumption, in comfort or some other parameter.”

Confidential, strategic documents were drafted at every stage in the process and presented to the Executive Committee. They clearly defined the project with codes for each point in the design and financial cycle. In addition to covering broad financial and investment issues, they also dealt with four main points: R&D, production, purchasing and launch. They provided greater details on product targets, product maturity, and development in general. Other subjects covered included: the mission; analysis of the current product; project assumptions; market matters; financial data; product development; technical targets; investments; complexity; CO2 (important and therefore continually monitored). The status of four areas was also reported: Production; Purchasing (which managed all the suppliers); the Quality Department; and the R&D Department. At the end came the project status section that summed everything up. Every department helped in drawing up the document and the milestones were set out in detail. There was also an assessment on how the product would turn out and on which the designers provided important input.


“Let’s just say this is an important input because if the project isn’t approved our model does not hit the market”, remarked Manuel Garcés. “We have to hit these milestones, that’s to say if it turns out that we have to be best in the class in design terms or in sportiness, we can’t come bottom of the heap.”

“These milestones mark our objectives”, noted Michele D’Alessandro. “They are the general product characteristics (comfort, ecology, technology, safety, design, price, cost of maintenance, consumption, driving) and they define the desired market position. For example, you say ‘the design has to be the best in its class in design terms’.”

“Well the IBIZA won the ‘Red Dot’ prize”, said Manuel Garcés with some pride. “In that respect, the car reached the ‘best in its class’ objective with flying colours.”

“Well, in the IBIZA’s case we must have done something right”, added Michele D’Alessandro. “We’ve won awards but the biggest prize of all is sales. You can tell the design pleases because the car is selling very well. Awards are great but what really counts is how many cars you sell.”

To sum up, what the marketing documents set was the elements of the product that were most valuable for the target segment .

“Exact and also how do we want to differ from others”, said Michele D’Alessandro. “For example, you expect Renault or Peugeot to turn out a comfortable vehicle but SEAT makes sportier cars that are more fun to drive.”

“Every customer should decide what he wants. Our target market expects a certain driving concept”, commented Manuel Garcés.

“There is a lot of marketing involved for defining the product and its characteristics. Marketing determines strategic targets and product positioning. For example, ‘ the most beautiful way of driving a functional car’ sums it up”, stressed Michele D’Alessandro. “The phrase defines our marketing and tells us who our competitors are.”

Marketing told who their competitors were and the designers bore this in mind, while giving their own views:

“You are entitled to put in your twopenny worth”, said Manuel Garcés. “It is an agreement between all departments. Just as others can say what they think about the design, we also have the right to opine on marketing or manufacture. Obviously, we are not going to carry out our own market study but we can give our views. That said, market issues are sometimes so specialist we are not qualified to give an opinion. For example, the average age of a LEON buyer. They may influence you but there’s nothing to discuss”.

“If they tell you the average age of a LEÓN buyer is 75, maybe the buttons need to be made a bit bigger. You have as say in things like that. Obviously, that is an extreme example but we see these documents and then there are the results of the clinics”, concluded Michele D’Alessandro.

THE CLINICS

The marketing documents gave both internal and external analysis. Around five hundred people were canvassed from different markets (especially the four or five big ones for SEAT: Germany, France, Italy, the UK and Spain). Typical clients were chosen, shown the product and then asked about the car’s exterior and interior. Usually, a concept clinic presented the vehicle architecture using clay models, even when the design had not been fully worked out; at the beginning of the development and when there was some alternative, the product clinic included prototypes. The participants in the clinics made their choices depending on the target segment, taking into account: age, gender, family status, social group, purchasing power, etc. The results of the clinics provided important design feedback, which was carefully considered by the company.

“We do not know if the clinic results are representative because we have no means of checking. That’s the marketing department’s responsibility. They have a lot of faith in the clinics because they have to justify their decisions. After all, there’s a crisis, everyone wants results and marketing managers are here today and gone tomorrow”, quipped Manuel Garcés.

“As we see it, there’s scope for improvement in marketing and the appointment of a new President with a strong track record in this field is good news. We have set high hopes on him”, went on Michele D’Alessandro. “We think that design has to improve, it can and will improve. The last few years have shown that we can make good products and designs. However, we think more could be done to boost sales. One thing is the product and quite another is what comes after. I imagine we will make progress on this front.”

4 In the 2009 ‘Red Dot’ design awards held by Germany’s Nordrhein Westfalen Design Centre, 49 countries submitted 3,231 products in 17 categories. The 27-man jury praised the SEAT Ibiza for its innovation, functional and ergonomic design, and its commitment to environmental sustainability.


THE CONFLICTS

“I believe that this conflict between design and marketing departments exists in all companies but it boils down to the difficulty in deciding the best way forward”, reflected Michele D’Alessandro. “It should cover everything ... because SEAT has decided on its advertising, the slogan for the marque is ‘auto emotion’. We are auto emotion, the emotional product is the IBIZA three door or five-door version, the BOCANEGRA. We want to do more on this score but it takes seven years before you can come up with another product. This isn’t the electronics industry in which you can launch a new product each year. A car is on the market for seven years and it takes four to develop it. The cyles are long and complex and you have to be very careful when it comes to making changes. We think we have great products. They are of high quality, they use proven, mature German technology and are well-designed. So why are we finding it so hard to stay the course, particularly now there is a crisis? When there is no crisis, you can sell everything but when a crisis hits, people pay more attention to the product and to the marque. The car market in Spain fell by 29% in the first nine months of this year and SEAT’s sales have fallen by 28%. We are doing little better than the market. We have to make improvements. A lot of stress is being put on the process and on development. The two things are in sync and it works. “

“Even so, the Marketing Department does not have a crystal ball. The trouble is, we are talking about very long cycles. A lot can change in four years. Maybe in four years time, cars will have no need for wheels – they’ll use something else”, went on Manuel Garcés.

“I can imagine the difficulties the marketing boys have. They say ‘SEAT is not a strong brand’. That’s when they start drawing up forecasts that show Ford will always sell more because Ford is Ford and Opel is Opel. There are brand stereotypes in Spain too, though they are not so strong. But that may change over time. Ten years ago, Audi did not enjoy the brand image it does today. That all started with the Audi 80, the Audi 100. Before that, BMW and Mercedes beat Audi hollow. Now Audi has begun to overtake its rivals. The marque is very clearly positioned, employs clear communication and its products evolve in a consistent fashion. There are many things that make a difference. Design can play an important part and in Audi’s

case, the appointment of Walter da Silva was a turning point. He has given Audi that magic touch that was lacking before. He achieved this through outstanding design and communication that strengthened the marque. That’s the key, as I see it”, stressed D’Alessandro.

THE COMMON AREAS

“In my view, marketing and design should be a single department”, continued Michele D’Alessandro. “It should be a single entity because there are strong links between the two since both marketing and design look for trends.”

This search for trends was the job of the ‘concept design’ team of designers, which had few links with marketing.

“At this stage, we have very little contact with marketing. The idea of bringing them in on the work has been floated but there’s no formal link. Let’s just say that it comes down more to individual efforts. An example is when we invited Benet (a marketing guy) to talk to us about how customer profiles are drawn up. He told us about the target group, client types, customer behaviour, what other things they buy. We also invited someone else from marketing to a workshop held in a hotel before starting on design work for the LEÓN. We rent competitors cars and completed a questionnaire on them. We also held various discussions to establish the strengths and weaknesses of the current range and what should be included in the next model. This kind of co-operation began in a sporadic fashion. After that, everyone ploughed their own furrow. There is a group that ensures all the milestones are reached not only in each department but also across the board. But the fact is there is little day-to-day communication. More collaboration is needed for meeting the major challenges.”

The Marketing Department was sited next to the Martorell factory, in the corporate building just two minutes away from the Design Centre.


DESIGN MANAGEMENT

One of the SEAT Design Manager’s main tasks was to relieve creative staff of administrative tasks such as project management, staff management, internal organization, relations with suppliers, preparing presentations, budgets and budgetary control.

“As far as I’m concerned, project management is related with cost, time and quality”, confessed Michele D’Alessandro, SEAT’s Design Manager. “I have a general vision of all the projects we are working on and we bring in the whole design team in marking milestones, communicating content and ensuring macro-targets are met. We have to mark the beginning and end. We start with a project and Manuel [Garcés] and his team does the micro planning for each of the projects to come up with the main milestones: how, who, when, etc.”

“We also monitor every milestone to come up with all the set targets”, pointed out Manuel Garcés, who is in charge of design processes. “From 48 to 24 months before launch, we decide who, what, and how much is needed to reach the targets.”

The design teams for each project were decided for the heads of interior and exterior design, choosing the best qualified person for a given project. Normally three or four design proposals are worked up, from which the winning one is chosen.

“When there is a new project, a contest is usually held and the winner goes on to the next stage. There is a project leader for interiors, one for exteriors, and another for Colour and Trim. Each project therefore has its own microstructure”, explained Michele D’Alessandro.

“In each project, modelling, workshop and surface design run across activities covering interiors, exteriors and Colour and Trim. A team is set up to develop the project. In the end, there is a matrix of elements for carrying out the project regardless of the scale of the project. That is because the same approach is adopted towards all projects, ranging from updating an existing model to designing a whole product family”, went on Manuel Garcés.

“However big or small the project is, the stages it runs through are the same. Although slight changes to a product can be done in a much shorter time, the cycles covering surfaces, mock-ups and virtual modelling are almost identical. The design needs time to ripen if you want to get it right. The Consortium places a lot of importance on the design part - it is taken very seriously. Because

the whole process is so standardised, it gives us time to work on things. The designers’ needs are respected”, said D’Alessandro earnestly.

Design had not always been accorded such an important role. The change had taken place over the last 15 years as the Consortium had recognised the vital contribution made by designers to the final product. This change in philosophy was reflected by the Design Department’s representation on the Board. Senior managers wanted to see everything. It was easy to imagine what this meant for the Consortium, which had the Bentley, Audi, Lamborghini, Skoda, Bugatti, SEAT and Volkswagen marques. The Consortium’s Executive Committee asked for a presentation when the milestone was reached so that there would be time to reflect and to canvas opinion. This showed respect for the product, the design and the designers themselves, who had fifteen minutes to explain their choices.

The design process was unique to SEAT. Competitors were working on similar lines, although SEAT knew that some of its rivals – for example, FIAT and Renault – used a more virtual approach. This apparently cut costs and time.

“But it goes back to what we said earlier, designs need time to ripen”, said Manuel Garcés.

“They have taken this step and it remains to be seen if they have made the right choice. There is a trend towards more virtual modelling and that means far fewer prototypes are produced. But at the moment the Consortium and its members want the reassurance of a physical model. This is today’s corporate culture but of course that may alter in a few years’ time if there are changes at the top”, added Michele D’Alessandro.

“We even fit the models with an engine that runs at 40 kph so we can see the model in movement”, noted Garcés.

“It’s different when you see it physically, it allows you to gauge what it looks like under natural light”, remarked D’Alessandro.

“Just as you would see it on the street”, Manuel Garcés stressed.

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