Marketing Professional Challenge 01 I MARPRO CHALLENGE

Prizes PRIZES

1st prize: 100% of tuition fees (€28,500) The first-prize winner is the candidate who submits the most convincing presentation and will receive funding to cover 2nd prize: 60% of tuition fees (€17,100) 100% of their tuition fees for the MSc in Marketing Man- agement (€28,500).

The second-prize winner will receive a scholarship for 60% of their tuition fees for the MSc in Marketing Management (€17,100). KEY DATES

Stage 1. Initial presentations due: March 1st, 2019

Stage 2. Finalists announced: March 22nd, 2019

Stage 3. Final presentations due: April 10th, 2019

Stage 4. Prizes awarded: April 30th, 2019

ESADE Marketing Professional What is the Marketing Professional Challenge for graduates Challenge (Marpro Challenge) about?

ESADE Business School has designed its MSc Programme The future of our markets is more uncertain than ever, and in Marketing Management for talented young students numerous factors often imply increasingly faster changes. who want to carry out a professional career in Marketing Moreover, the competitive dynamics in this context are even and Sales. blurring the lines between industries.

In line with the programme’s philosophy, this competition Faced with this complex reality, the role Marketing teams offers you the possibility of challenging yourself in an play has become more complex and challenging but also international contest dedicated to SEAT, a leading carmaker more relevant. It requires team members to have a holistic in the . perspective of reality, that they be analytical as well as strategic, and that they hone their intuition, creativity, If you are a recent graduate or about to complete your teamwork and communication skills, amongst others. bachelor’s degree, you’re curious, hardworking, analytical and strategic, plus you have initiative and a creative spirit, The new Marketing Professional Challenge offers participants this is your chance to demonstrate your best and be rewarded an ambitious, forward-thinking exercise dedicated to SEAT, for it. always from a Marketing point of view. The attached case study serves as the starting point. 02 I MARPRO CHALLENGE

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

Presentation Guidelines

Participants will not be rewarded for submitting a huge There is no one specific structure required, as creativity is compilation of data. Rather, they have to come up with an important part of this competition. In addition, there is no the most convincing and well-grounded answer and single way to tackle the challenge. However, we suggest that demonstrate their ability to: 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 01. Understand the challenge posed and the case-study your background and motivation for studying the ESADE setting. 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. 02. Focus on the key points, always from a holistic Marketing In terms of the PowerPoint presentation (15-20 slides), please approach. make sure it contains the following:

03. Propose a justified research methodology to explore the critical areas of analysis. 01. Case study summary

04. Conduct an in-depth analysis. > An explanation regarding the company’s situation > The key aspects from a Marketing point of view 05. Come up with an answer that is: 02. Your analytical focus and methodology a. Understandable, relevant and convincing b. Well-grounded 03. The main findings regarding future challenges c. Ambitious and creative but also credible Your recommendations for the company d. Marketing- focused 04. e. Presented attractively 05. The key lessons learned and obstacles. f. Company-specific

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. 03 I MARPRO CHALLENGE

Challenge Eligibility Structure Criteria

STAGE 01 The MARPRO Challenge is open to anyone applying to Initial submission the MSc in Marketing Management Programme: Recent graduates, postgraduates or students in the final year of their — To participate you must submit the following documents undergraduate programmes at any university. Candidates to: [email protected] no later than March are allowed to participate at any stage of their application. 1st, 2019: However, to get the prize, they must have satisfactorily completed the admissions process for the MSc in Marketing — PowerPoint presentation (15-20 slides) according to Management. 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). Acceptance of the prize STAGE 02 This Scholarship award is not compatible with any other Announcement of the finalists: byMarch 22nd, 2019 scholarship, award or financial aid. If a candidate is willing to accept Marketing Professional Challenge prize, will have STAGE 03 to reject other scholarships or awards granted. Final submission — The finalists have to prepare a 5 to 10-minute-long video to More information about the admissions process is available present the major points of their solutions in a persuasive at: and professional manner. A file or link to a file with the http://www.esade.edu/en/programmes/masters/ video should be sent by e-mail to: mscmanagement@ msc-programmes/admissions esade.edu no later than April 10th, 2019.

— 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 ESADE Marketing Professional Challenge Committee will inform the winners of its verdict by April 30th, 2019.

> All the documents will be presented 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.

> The ESADE Marketing Professional Challenge Committee might declare a prize void if no applications meet the minimum criteria or requirements. 04 I MARPRO CHALLENGE

ESADE CASE 0251-CA-1-1 SEAT 1

Written by Professor Jordi Montaña and Professor Isa Moll, December 2009

On the 15th of June 2009, a Briton, James Muir, took over from Following agreements reached with the EEC, European Eric Schmitt as the new President of SEAT. The handover took Economic Community, in the 1970s regarding exports place several months earlier than originally planned. There were and the setting up of new industrial groups, the company two exceptional features regarding Muir’s appointment. First, decided to establish a Research and Development Centre he was the first SEAT President who did not come from the to gain greater technological autonomy for its -based VW Group (he was formerly Managing Director of MAZDA products. SEAT’s R&D Centre designed the 1200 SPORT, Motor Europe). Second, he was an expert in marketing and the handiwork of Aldo Sessano, which gave the company a sales something that Michele D’Alessandro the SEAT’s Design unique position among car makers in Spain, making it the only Manager and Manuel Garcés (head of design processes and firm in the country capable of developing and manufacturing virtual reality presentations) interpreted as a strategic change its own vehicles. José Mª Martínez Serra was the head of in the relationship between the design departments to which design and development during that stage of the company’s they both belonged and the marketing department. 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 Product Development and Design within SEAT’s history Design, which was sited in the Freeport. The Car Studies Department had created the SEAT 133 and four-door 127 SEAT [La Sociedad Española de Automóviles de Turismo – models many years earlier. The Spanish Saloon Car Company] was founded on the 9th of May 1950. It employed FIAT’s technology, which was needed SEAT went through one of the trickiest moments in its to begin turning out the first vehicles in ’s Free Port. history in the early 1980s when FIAT put an end to thirty The 13th of November 1953 was a historic day, marking the years of technical collaboration. SEAT decided to continue first SEAT – the 1400 model – to come off the production on its own and thus became a wholly Spanish manufacturer. line. The only difference between it and the equivalent FIAT The directors’ strategic plan was clear: to use its own model was the badge on the front. technological resources to create new models and to seek co-operation with a strong car manufacturer in the medium Given the small number of vehicles in Spain in the 1950s, term. In 1982, the company took on a new corporate SEAT sought agreements with independent coachwork identity in keeping with its size, structure and plans for the makers such as Pedro Serra, who created various kinds of future. SEAT launched new models: the TRANS , a spin-off coachwork for the SEAT 1400 and SEAT 600 models that were from the FIAT PANDA, and the SEAT RONDA, which replaced symbols of Spanish industrialisation in the 1960s and mass the RITMO. The Technical Centre began to work on the consumption by the country’s middle class. In the 1960s, design and launch of the first wholly SEAT model. The Italian SEAT set up its Training Centre, which was to play a key designer Giugiaro, the German engineering firm Karmman role in the company’s subsequent quest for technological and Porsche collaborated in the new project. This gave rise independence. Furthermore, SEAT’s began to design and to the IBIZA in 1984, considered SEAT’s most charismatic and build its vehicles with slight modifications to FIAT’s models. best-selling car ever. The PANDA became the MARBELLA This was the case with the SEAT 850, the 4-door version of and a saloon version of the RONDA was also launched and the 850, and the 1430 dubbed the MÁLAGA.

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 05 I MARPRO CHALLENGE

It was essential that SEAT found a new industrial partner the following years the ALTEA FREETRACK, TRIBU (2007), and its search brought it into contact with VOLKSWAGEN BOCANEGRA (2008) and IBZ (2009), foreshadowing SEAT’s and led to commercial and industrial co-operation. At the future range. end of 1986, VW became the majority shareholder in SEAT with a view to building a brand-new factory in Martorell. The In 2009, the SC version of the Ibiza won the “Red Dot Award” new plant set out to adopt the most avant-garde standards in the product design category for its outstanding quality, in the industry. To this end, it hired young designers and while the 5-door version of the Ibiza won the “ Best of the Best technicians, built new facilities, and introduced new ” prize for its high-quality design. The highlights of the new processes and technologies. The aim was to ensure model, which marked the beginning of the “Arrow Design“, continuous modernisation of the range and to develop the were the car’s low headlights and radiator grill, which gave first project designed completely within the orbit of the the car a dynamic, sporty look. The side panels formed Volkswagen Group: the TOLEDO. The model employed slanted, swept-back “shoulders”, with attractive wheel an advanced design that was the work of Giugiaro. The arches. The vehicle was the first vehicle of a series created groundwork for the future model was laid by two concept by Luc Donckerwolke during his time as SEAT’S Director cars by the same Italian designer - the PROTO T and TL. of Design. The most popular model of the Spanish marque received two awards in a ceremony held in the Theater Aalto SEAT Design began its internationalisation in 1993 supported in Essen (Germany). 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 SEAT’s Design resources later, the version of the CONCEPT T was presented. The vehicle accentuated the Mediterranean The SEAT Design Centre (SDC), inaugurated in October, styling that typified the SEAT marque. 2007, was a singular building at SEAT’s Martorell plant. It covered 5,600 square meters and was one of the most The models ALHAMBRA and AROSA models were the first modern, functional design centres anywhere in the world fruits of collaboration with the Volkswagen Consortium. and the only one of its kind in Spain. It was created by and The second design generation came with the TOLEDO and for designers and brought the whole design process under LEÓN, marking a new concept of style and image that would one roof. This helped the company capitalise on synergies become hallmarks of the company. In 1998, SEAT presented between the R&D and design departments to foster ground- the BOLERO prototypes for a luxury berlina and FORMULA, breaking design, which was one of SEAT’s hallmarks. a sports two-seater. The centre had the most advanced technology and equipment The following year marked the international presentation of to facilitate the creative work, ranging from the first sketches the SALSA concept car, designed by Walter da Silva. This to 1:1 scale design models. The whole facility was thought revealed a new style and concept that was wholly developed out and built to serve the creative processes taking place by the company’s Technical Centre and was part of the “SEAT in its interior. Functionality and confidentiality were two auto-emocion” campaign [a Spanish play on words expressing overriding considerations in the building’s design. A series cars that evoke a strong emotional response]. This pitch, of Mediterranean-inspired screens ensured excellent natural together with sporty cars was to be an integral part of the lighting that made for a pleasant working environment and marque’s new models. cut energy consumption. It also meant that nothing could be glimpsed from outside, ensuring new cars were kept a closely- The Design Centre celebrated its 25th anniversary in 2000. guarded secret until presentation day. This marked the third generation of the IBIZA model and the second of the CORDOVA. The EMOCION and TANGO The SEAT design team played a very important role in building’s concept cars incorporated the latest technological advances design, conveying their needs to the team of architects and springing from the information society. engineers in charge of construction. The building needed a unique structure given the special nature of the work carried In 2006, SEAT’s new Design Director, Luc Donckerwolke, out within. transferred the Design Centre in Sitges to cutting edge, ultra-modern premises in Martorell planned by the same That is why spaces were split into five main areas covering people who had worked on the Design Centre. The same the various facilities and activities housed in the two-floor year would see the prototypes for the IBIZA VALLIANTE, and building: (1) Ideas area (design): exterior and interior design,

3 A small seaside town some 25 miles south of Barcelona. 06 I MARPRO CHALLENGE

Colour and Trim, CAD and Engineering Design; (2) Creation “We also had staff exchanges with , VW and other area (construction): interior and exterior design, workshops, design departments in the Consortium that brought new paint shop, model store, materials and services; (3) Virtual blood to the projects. A designer comes here and we send Presentations area: virtual reality room; (4) Physical one of ours there”, said D’Alessandro. Presentations area: a central 430 square metre courtyard; (5) Design and general management area. “In the first project stage, we always use other Consortium design studies to provide new ideas”, noted Manuel Garcés. All the work areas were laid out around the courtyard, which performed two functions. The first was to ensure all work “When we begin a new project, we run an internal spaces of work had abundant natural light. The second was competition. Several people may take part in the contest to offer a suitable stage for the presentation of the marque’s and we also ask other centres to come up with ideas. We have future models and evaluate the car’s forms, colours and worked with proposals for Audi, and VW. This finishing under natural lighting. ensures fresh thinking. The marque models tend to follow the package and official guidelines while the others are a bit Both the courtyard and the various workshops on the more free. It’s not that they ask us for revolutionary designs. ground floor were always visible from the windowed offices Rather, it’s that you are always doing the same kind of work at the top of the building, where the design, and general here so working on a proposal for others is an opportunity to management departments were sited. These occupied a let your imagination soar”, said D’Alessandro. strategic position in the building, giving them a direct view of the various prototype development stages and hence strong In the Design Centre there were three macro-areas: product control over design and production production processes. maintenance (centred on the models that were already on the market); the design of products for launch in the short The workshops on the ground floor occupied a lot of space and medium terms; a group carrying out concept-design but the exhibition areas next to the courtyard were also work and that adopted a longer-term vision, often not important, providing highly flexible areas for the presentation linked to existing products. The last group focused on the of prototypes. search for new solutions, new forms, new trends.

The building was fitted with cutting-edge technology: CAD, simulation and calculation tools and advanced virtual reality The Product Development process systems (which allowed viewing of the model being worked on by several people at any one time). “This is a continuous process. Every model has its own life cycle. In the car industry, life cycles usually last around The Design Centre had a surface area of 5,600 m2 – large seven years. That has an impact on all the company’s work enough to house a hundred highly-qualified engineers, because small modifications are made to vehicles each designers and modellers from around the world. The facility year and there’s a complete face-lift after four years. For not only underpinned the design of SEAT’s product range but example, this year we have given the SEAT LEÓN a face-lift. also provided services to the whole Volkswagen Group. This usually happens more or less halfway through the life cycle. The search for information is begun at various levels “ At the moment, we have about 65 staff. These cover all the for everything that will be needed to design and build the centre’s tasks: design of exteriors; design of interiors; colour new model”, stressed Michele D’Alessandro. and trim; model workshop; design management and CDO (which generates mathematical data)”, explained Michele There was a system for co-ordinating all the various levels D’Alessandro, SEAT’s Design Manager of SEAT. of SEAT departments, setting the targets and milestones at 48 months before launch. There was a lot of documentation There were sub-areas for each of the main concepts, for provided by the marketing and sales departments that example, for interior design there were people who dealt analysed how a given model was performing, what worked with the , steering wheels, knobs, the electronics, etc. well and what badly, SWOT analysis, customer profiles and This covered not only the exterior design of large surfaces whether these matched what was planned when the car but also details such as grilles, mirrors, wheels, etc. The was designed. whole vehicle was dreamt up in the Design Centre. “There is a fair amount of financial control to ensure Outsourcing was used at certain moments, especially clay the project meets profitability targets”, added Michele and virtual modelliing and CAD. They did not have external D’Alessandro. “Design is naturately involved. About the designers - as had been the case with Giugiaro - but there product at the beginning is the Technical Centre and later were exchanges between the Consortium’s design centres. are the departements of manufacturing and quality.” 07 I MARPRO CHALLENGE

“The design process is always the same”, Manuel Garcés The project plans were drawn up in accordance with the chipped in. “We look into these stages again and again launch schedules.The product line launches were staggered and demand a little more each time round. That is to say, to iron out peaks and troughs in the workload. The cycle we initially make volume models in which the proportions plan was clearly intended to strike a balance between are the important thing – they don’t have headlights or tail development, manufacturing and launch activities so that lights because there is no need to look at them at this stage. the market could absorb the vehicles made. The cycle plan Adding such details would also be both expensive and was reviewed every year and adopted a five-year horizon. complex. So we focus on the car’s volumes. Once we have refined the volumes, we start looking at the headlight and “There are many changes during the year because new tail light assemblies. In the interior we initially represent the things are added or old ones are cut out. The market electronics with drawings placed on the dashboard showing changes constantly and you need to adapt”, pointed out the radio, instruments and so on. As with the exterior, we Michele D’Alessandro. “There are also new points of view initially just focus on the volumes.” and changes in the direction. The target is to sell and that calls for different strategies.” “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. 08 I MARPRO CHALLENGE

The role of suppliers drawing using this initial information, that is the concept stage. The technical side influences our choices. It’s a bit At the beginning of the project (at least forty months before like a funnel – we deploy all our creativity at the beginning market launch) a meeting is held with suppliers to look at of the process and technical considerations tell us where the what technological advances can be made, for example, hard points should be. But as the months go by, the creative fitting headlights with LEDs and looking at these in the input drops off and the suppliers and technicians take over”, context of budget targets for each model. explained Michele D’Alessandro.

“They can design many things but they have to ensure it is within the target. Each marque has its own target and designs The development process, an on-going negotiation must take account of that. Our target is lower than for other Consortium marques and therefore we have to be cheaper At the beginning of the design process, very little attention without lowering quality”, Manuel Garcés commented. was paid to viability criteria beyond those imposed by technical and legal regulations. This allowed designers to “The suppliers play an important role in innovation matters. come up with radical concepts to breathe life into the new They are experts in their areas and can give technical or model. As time went by and the design began to take shape, environmental solutions”, added Michele D’Alessandro. the so-called hard-points came into play, marking the limits that the design had to meet. “They play a big role in assessing viability and this leads to technical solutions that can make you change the design”, “We are never free to do just what we like because it makes stressed Garcés. “For example, a few LEDs could be used no sense to design something that we know will never be instead of a single powerful bulb in headlights. But one thing built. In these intermediate stages one tends to haggle is providing a line of lights for design purposes and another over the specifications – ‘I can get 5 mm.’, ‘Well, I need 15 is using a traditional bulb to cast a strong beam.” mm’ and so on. Design and technical considerations need to be squared for the project to progress. We think of this The meeting with suppliers was a critical point in the design process as a wheel. There are stages that are reiterated ‘n’ quest. SEAT technical staff kept in daily touch with them to times until we reach agreement on the model. There is the ensure the chosen designs worked and were practical. physical modelling stage, a mathematical modelling stage One of the key suppliers was the Consortium itself, which and between the two we use successive renderings to move provided the chassis for each of the lines. The company’s back and forth between the physical and virtual designs. strategy was to use common chassis and other major That is to say, it is very important that the physical and the components for the various marques, for example, the LEÓN mathematical models throw up the same answers at the end chassis was the same as that used for the Audi A3, Skoda of the process”, said Manuel Garcés. “The physical models Octavia and the VW Golf. serve to evaluate the design and the virtual models so the designers can work with the technical department. The “We have to differentiate as much as possible while using virtual models are our link to the other technicians of SEAT the same chassis. First, we start with the base vehicle and – some 950 people.” 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- 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

09 I MARPRO CHALLENGE

The physical model and the mathematical model are worked target four years earlier. Where do you get that from? on at the same time. When a surface was defined, it was Well, you look at a current car and its competitors. In turned into a physical model on the lathe. When the physical the case of the LEÓN, we asked ourselves what price model was altered or something new was added, the the Megane and the Opel Astra would be pitched at. change was digitalised and a three-dimensional scan made There also has to be a certain price logic among the of the surfaces. The model surface was the communication Group’s marques – this is something that is already channel in the product development. This was the only way well-established. Target price and sales volumes have of allowing others to see what the designers were doing been set. A profit target is also set by the Consortium and to see whether it would work. and that tells you what you can spend. That’s how the VW Group works. It is called the top-down target. It “We make the aerodynamics calculations for the vehicle. is defined by senior management in each department. These inputs are needed because poor aerodynamic It determines how much the car can cost, material performance means higher fuel consumption and worse costs, manufacturing costs, investment, development road holding. Then there is the matter of weight to volume. expenses. All these things are established at the outset. If you get that right, you can lower fuel consumption and The main parameters are revenue and profitability and CO2 emissions. These inputs are part of the ecological these determine all the others”. criteria that our now thoroughly integrated in our models. The mathematical model enables these figures to be The design process continued in a cyclical fashion, calculated with reasonable accuracy. In the past, we would maintaining the relationship between the surface model make a fantastic model and send it to the technicians but and the mathematical model until the milestone was the resulting car had nothing in common with the design. reached and the two models were (in theory at least) in total The new technologies allow us to get the technicians’ input agreement. However, in practice, small changes needed to within roughly two weeks of sending them the design. be made at the last moment. Following the ‘funnel principle’ I mentioned earlier, we know the first stage predicts about 60 % of the outcome “When we speak about milestones, we mean “freezing” the and this rises to 70% or 80% a bit further on. We finally end design reiteration process”, explained Michele D’Alessandro. up in complete agreement. It comes to haggling over the “For example, we perform the first cycle at least 40 months specs until we strike a bargain. Everyone does his utmost prior to launch. We call this the PR0 stage, in which we have to make the project a success”, added Manuel Garcés. ‘n’ models. There are usually 3 or 4 models, which are then worked on for a further six more months, which is when the ‘As time goes by, you begin to come down to millimeters. In PR1 milestone is reached. Two models are then chosen from the beginning, you talk of 10, 20, 30 mm but as the design the four original ones”. begins to approach its final form, you start discussing the target figures. Maybe we are delighted with what we have “We work on the interior and exterior”, continued Manuel designed but if it is a Euro too expensive, it’s changed. Garcés. “In this first stage, we speak about architectures. That’s because a Euro here and a Euro there adds up. If You can have both different architectures and designs. You everyone went about it like that, it would be a disaster. So might have two options: the same windscreens and maybe you have to horse trade – ‘I’ll accept a Euro here if you trim even the same side windows because that’s the way things one off there’, said D’Alessandro. are but the remaining components might be different.”

“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 10 I MARPRO CHALLENGE

After six months, another milestone was PR2, when one of The colours and fabrics still remained to be decided and the two designs chosen at PR1 was sent to the technical staff these did not need to be ‘frozen’ at such an early stage. That so they could add their requirements. was because colors and textiles could be worked up fairly fast so there was more time to define the upholstery ranges. “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. Marketing

“We try to ensure that technical considerations do not “The Marketing Department is something that we know adversely affect the styling.That is why we retain control as clients and as suppliers. In the design process they give until the design is frozen. That happens two years before us market analysis, looks at how the company can boost launch. That is when the designers take a back seat. But penetration and position its products (i.e. , family from 48 to 24 months before launch, we are the one’s who saloon, cheap run-around, )”, explained Michele have the final say”,continued D’Alessandro. D’Alessandro.

Final design approval – ‘freezing the design’ in SEAT jargon The marketing strategy bore in mind the marque architecture, - was a very important point in the process. At each of the which the Consortium decided. milestones, Luc Donckerwolke, SEAT’s Design Director, presented the design to the Executive Committee, which As Manuel Garcés noted, “They scribble a few lines stating discussed the project and the various alternatives. 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 The manufacturing stage fuel consumption, in comfort or some other parameter.”

The industrialization and manufacturing stages began Confidential, strategic documents were drafted at every stage once the Executive Committee had accepted the final in the process and presented to the Executive Committee. design together with suggested modifications. That was They clearly defined the project with codes for each point when prototype testing started to ensure quality targets in the design and financial cycle. In addition to covering ware met. Up to then, the models were static and then broad financial and investment issues, they also dealt with four on work began on prototypes featuring the final design. main points: R&D, production, purchasing and launch. They The technical departments took over the leading role, provided greater details on product targets, product maturity, with the designers work henceforth confined to minor and development in general. Other subjects covered styling changes. included: the mission; analysis of the current product; project assumptions; market matters; financial data; product “Fewer and fewer changes are being made in the new development; technical targets; investments; complexity; processes because we now try to ensure the technical CO2 (important and therefore continually monitored). The side is part of the design process from the outset. We status of four areas was also reported: Production; Purchasing know how far we are off the targets in each stage and (which managed all the suppliers); the Quality Department; the technical staff knows just where we are. The idea and the R&D Department. At the end came the project status is that when we reach this stage, the designers and section that summed everything up. Every department helped technical staff will have reached broad agreement and in drawing up the document and the milestones were set out so the scope for changes will be limited. There may still in detail. There was also an assessment on how the product be changes because of shifts in either the target or the would turn out and on which the designers provided important vehicle itself but these have to be small ones”, Manuel input. 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.” 11 I MARPRO CHALLENGE

“Let’s just say this is an important input because if the Obviously, we are not going to carry out our own market project isn’t approved our model does not hit the market”, study but we can give our views. That said, market issues remarked Manuel Garcés. “We have to hit these milestones, are sometimes so specialist we are not qualified to give an that’s to say if it turns out that we have to be best in the class opinion. For example, the average age of a LEON buyer. in design terms or in sportiness, we can’t come bottom of They may influence you but there’s nothing to discuss”. the heap.” “If they tell you the average age of a LEÓN buyer is 75, “These milestones mark our objectives”, noted Michele maybe the buttons need to be made a bit bigger. You have D’Alessandro. “They are the general product characteristics as say in things like that. Obviously, that is an extreme (comfort, ecology, technology, safety, design, price, cost example but we see these documents and then there are of maintenance, consumption, driving) and they define the the results of the clinics”, concluded Michele D’Alessandro. desired market position. For example, you say ‘the design has to be the best in its class in design terms’.” The clinics “Well the IBIZA won the ‘Red Dot’ prize”, said Manuel Garcés with some pride. “In that respect, the car reached The marketing documents gave both internal and external the ‘best in its class’ objective with flying colours.” analysis. Around five hundred people were canvassed from different markets (especially the four or five big ones for “Well, in the IBIZA’s case we must have done something SEAT: Germany, France, Italy, the UK and Spain). Typical right”, added Michele D’Alessandro. “We’ve won awards clients were chosen, shown the product and then asked but the biggest prize of all is sales. You can tell the design about the car’s exterior and interior. Usually, a concept pleases because the car is selling very well. Awards are clinic presented the vehicle architecture using clay models, great but what really counts is how many cars you sell.” even when the design had not been fully worked out; at the beginning of the development and when there was some To sum up, what the marketing documents set was the alternative, the product clinic included prototypes. The elements of the product that were most valuable for the participants in the clinics made their choices depending on target segment . the target segment, taking into account: age, gender, family status, social group, purchasing power, etc. The results of “Exact and also how do we want to differ from others”, said the clinics provided important design feedback, which was Michele D’Alessandro. “For example, you expect Renault or carefully considered by the company. Peugeot to turn out a comfortable vehicle but SEAT makes sportier cars that are more fun to drive.” “We do not know if the clinic results are representative because we have no means of checking. That’s the marketing “Every customer should decide what he wants. Our target department’s responsibility. They have a lot of faith in the market expects a certain driving concept”, commented clinics because they have to justify their decisions. After Manuel Garcés. all, there’s a crisis, everyone wants results and marketing managers are here today and gone tomorrow”, quipped “There is a lot of marketing involved for defining the Manuel Garcés. product and its characteristics. Marketing determines strategic targets and product positioning. For example, ‘ the “As we see it, there’s scope for improvement in marketing most beautiful way of driving a functional car’ sums it up”, and the appointment of a new President with a strong track stressed Michele D’Alessandro. “The phrase defines our record in this field is good news. We have set high hopes on marketing and tells us who our competitors are.” him”, went on Michele D’Alessandro. “We think that design has to improve, it can and will improve. The last few years Marketing told who their competitors were and the designers have shown that we can make good products and designs. bore this in mind, while giving their own views: However, we think more could be done to boost sales. One thing is the product and quite another is what comes after. I “You are entitled to put in your twopenny worth”, said Manuel imagine we will make progress on this front.” 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.

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. 12 I MARPRO CHALLENGE

The conflicts The common areas

“I believe that this conflict between design and marketing “In my view, marketing and design should be a single departments exists in all companies but it boils down to department”, continued Michele D’Alessandro. “It should the difficulty in deciding the best way forward”,reflected be a single entity because there are strong links between Michele D’Alessandro. “It should cover everything ... the two since both marketing and design look for trends.” because SEAT has decided on its advertising, the slogan for the marque is ‘auto emotion’. We are auto emotion, This search for trends was the job of the ‘concept design’ the emotional product is the IBIZA three door or five-door team of designers, which had few links with marketing. version, the BOCANEGRA. We want to do more on this score but it takes seven years before you can come up with “At this stage, we have very little contact with marketing. another product. This isn’t the electronics industry in which The idea of bringing them in on the work has been floated you can launch a new product each year. A car is on the but there’s no formal link. Let’s just say that it comes down market for seven years and it takes four to develop it. The more to individual efforts. An example is when we invited cyles are long and complex and you have to be very careful Benet (a marketing guy) to talk to us about how customer when it comes to making changes. We think we have great profiles are drawn up. He told us about the target group, products. They are of high quality, they use proven, mature client types, customer behaviour, what other things they German technology and are well-designed. So why are we buy. We also invited someone else from marketing to a finding it so hard to stay the course, particularly now there is workshop held in a hotel before starting on design work a crisis? When there is no crisis, you can sell everything but for the LEÓN. We rent competitors cars and completed a when a crisis hits, people pay more attention to the product questionnaire on them. We also held various discussions and to the marque. The car market in Spain fell by 29% in to establish the strengths and weaknesses of the current the first nine months of this year and SEAT’s sales have range and what should be included in the next model. This fallen by 28%. We are doing little better than the market. kind of co-operation began in a sporadic fashion. After that, We have to make improvements. A lot of stress is being put everyone ploughed their own furrow. There is a group that on the process and on development. The two things are in ensures all the milestones are reached not only in each sync and it works. “ department but also across the board. But the fact is there is little day-to-day communication. More collaboration is “Even so, the Marketing Department does not have a crystal needed for meeting the major challenges.” ball. The trouble is, we are talking about very long cycles. A lot can change in four years. Maybe in four years time, cars The Marketing Department was sited next to the Martorell will have no need for wheels – they’ll use something else”, factory, in the corporate building just two minutes away went on Manuel Garcés. from the Design Centre.

“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. 13 I MARPRO CHALLENGE

Design management Design had not always been accorded such an important role. The change had taken place over the last 15 years as One of the SEAT Design Manager’s main tasks was to the Consortium had recognised the vital contribution made relieve creative staff of administrative tasks such as project by designers to the final product. This change in philosophy management, staff management, internal organization, was reflected by the Design Department’s representation relations with suppliers, preparing presentations, budgets on the Board. Senior managers wanted to see everything. and budgetary control. It was easy to imagine what this meant for the Consortium, which had the , Audi, Lamborghini, Skoda, Bugatti, “As far as I’m concerned, project management is related with SEAT and Volkswagen marques. The Consortium’s Executive cost, time and quality”, confessed Michele D’Alessandro, SEAT’s Committee asked for a presentation when the milestone Design Manager. “I have a general vision of all the projects was reached so that there would be time to reflect and we are working on and we bring in the whole design team in to canvas opinion. This showed respect for the product, marking milestones, communicating content and ensuring the design and the designers themselves, who had fifteen macro-targets are met. We have to mark the beginning and minutes to explain their choices. end. We start with a project and Manuel [Garcés] and his team does the micro planning for each of the projects to come up The design process was unique to SEAT. Competitors were with the main milestones: how, who, when, etc.” working on similar lines, although SEAT knew that some of its rivals – for example, FIAT and Renault – used a more “We also monitor every milestone to come up with all the set virtual approach. This apparently cut costs and time. targets”, pointed out Manuel Garcés, who is in charge of design processes. “From 48 to 24 months before launch, we decide “But it goes back to what we said earlier, designs need time who, what, and how much is needed to reach the targets.” to ripen”, said Manuel Garcés.

The design teams for each project were decided for the “They have taken this step and it remains to be seen if they heads of interior and exterior design, choosing the best have made the right choice. There is a trend towards more qualified person for a given project. Normally three or four virtual modelling and that means far fewer prototypes design proposals are worked up, from which the winning are produced. But at the moment the Consortium and its one is chosen. members want the reassurance of a physical model. This is today’s corporate culture but of course that may alter in “When there is a new project, a contest is usually held and a few years’ time if there are changes at the top”, added the winner goes on to the next stage. There is a project leader Michele D’Alessandro. for interiors, one for exteriors, and another for Colour and Trim. Each project therefore has its own microstructure”, “We even fit the models with an engine that runs at 40 kph explained Michele D’Alessandro. so we can see the model in movement”, noted Garcés.

“In each project, modelling, workshop and surface design “It’s different when you see it physically, it allows you to run across activities covering interiors, exteriors and Colour gauge what it looks like under natural light”, remarked and Trim. A team is set up to develop the project. In the end, D’Alessandro. there is a matrix of elements for carrying out the project regardless of the scale of the project. That is because the “Just as you would see it on the street”, Manuel Garcés stressed. same approach is adopted towards all projects, ranging from updating an existing model to designing a whole Barcelona Madrid product family”, went on Manuel Garcés. Av. Pedralbes, 60-62 Mateo Inurria, 25-27 08034 Barcelona-España 28036 Madrid-España “However big or small the project is, the stages it runs through Tel. +34 932 806 162 Tel. +34 913 597 714 are the same. Although slight changes to a product can be Fax +34 932 048 105 Fax +34 917 030 062 done in a much shorter time, the cycles covering surfaces, mock-ups and virtual modelling are almost identical. The Buenos Aires www.esade.edu design needs time to ripen if you want to get it right. The Av. del Libertador 17.175 Fax +34 917 030 062 Consortium places a lot of importance on the design Beccar – San Isidro part - it is taken very seriously. Because the whole process (B1643CRD) is so standardised, it gives us time to work on things. The Buenos Aires – Argentina designers’ needs are respected”, said D’Alessandro earnestly. Tel. +54 11-4747 1307