Mr. Margonis, the IQOS tobacco heating device has been available on the Bulgarian market for two years now. What are the consumers’ attitudes towards this smoke-free alternative?
Exactly. Two years ago we launched in Bulgaria our first smoke-free alternative from our portfolio of smoke-free products. At the end of 2017 we launched IQOS first in Sofia and six months later gradually expanded towards the other big cities – Plovdiv, Burgas, Varna. Then we branched out to other big cities such as Veliko Tarnovo, Ruse, Pleven, Stara Zagora. In order to have the smoke-free alternatives accessible to legal age smokers in whole Bulgaria we established an infrastructure comprised of many channels - brand stores, partnerships with large petrol stations and retail outlets, mobile coaches around the country. We created different digital channels to ensure smooth communication and customer care. We have a call centre, where every adult smoker or IQOS user can reach us and receive information regarding device replacement; arrange a meeting with a coach or something else.
My observations are that Bulgarians are very curious, love innovations and are interested in science. Hence, I am happy that the adult smokers are interested in better alternatives to conventional cigarettes such as the IQOS device.
How has the company business model changed since the launch of IQOS and how much have you invested so far?
Before releasing IQOS on the market we had a small office in Bulgaria. Once the heating device was launched, we had to be able to meet the needs of our legal age users, which became significantly greater and continue to increase. This was the reason why we transformed our business model and expanded our office in Bulgaria. As a result, Philip Morris Bulgaria has now about 100 employees. All of them work in a completely new environment, as the transformation of the business model with the launch of IQOS was accompanied by innovations, technology development and high level of customer care. This means that we are not simply saturating the market with a new device, we need to have the entire infrastructure in place. As I said, to address the needs of our consumers, we had to establish an adequate customer care ecosystem in Bulgaria. In order to support the IQOS growth in Bulgaria and to spread the information about the better smoke-free alternatives among the adult smokers , in Bulgaria work additionally around 400 mobile coaches.
This type of expansion requires big investments. In the big cities, there are IQOS stores or the so called “islands” (kiosks). A new call centre in Bulgaria managed by Concentrix – a global customer care company will provide customer services by phone. The employees working in the call centre will support our customers in Bulgaria and Italy.
Since the beginning of October IQOS has been launched on the US market. In your opinion how will that impact the sales and consumer perception in the markets globally?
Firstly, we are very happy that IQOS is now available on the US market because it is the only nicotine delivery system that completed the premarket tobacco application procedure of the FDA and which was authorized for sale in USA on 30 April this year. It is very important to be issued such authorization as this is maybe the most stringent regulator in the world. Hence this will impact the other markets.
Let’s not forget that the US is the second biggest market in the world after China. There are about 40 million adult smokers in the US and it is very important that these smokers are given access to a different alternative, which is scientifically substantiated much better than continuous smoking of conventional cigarettes.
Most probably the US users have already seen the product in other markets. It is associated with innovation, sophistication, and technological advancement and the adult smokers in the US who would otherwise continue smoking deserve to have access to this smoke-free alternative. The first IQOS store in the US opened on 4th October in Atlanta, Georgia, which was out first step in the US market.
Our smoke-free alternative is already sold in 51 markets around the world and has more than 12 million users. The use of IQOS leads to generation of vapor with 95% reduction of harmful chemicals compared to cigarettes. It is important to state that this is not equal to 95% reduction in risk. IQOS contains nicotine, which is addictive and is meant only for legal age smokers, who do not want to quit.
The new IQOS 3 DUO will soon be released on the Bulgarian market. How did the new version come about and what is different in it compared to the previous version of the smoke-free device?
From the moment we first launched IQOS we promised our consumers to constantly improve the device. This is technology and we know that technologies develop fast to catch up with consumer’s needs. Our main goal is to address all issues that our adult users report.
Around this time last year we launched IQOS 3. It was a dramatic change compared to the previous version of the device in terms of technology, design, charging time and robustness. Now we launch a new version of the device - IQOS 3 Duo, developed entirely based on our consumers feedback. IQOS 3 Duo allows 2 consecutive uses without waiting for the holder to recharge. This is in fact the biggest innovation compared to the previous model. The holder is charged much faster and the waiting time between the experiences is much shorter. Our new version of the device features additional LED lights that show the remaining time to the next recharge of the holder.
Are you working on the next innovation which will improve the tobacco heating devices?
It is very important for us to constantly improve the device and offer new versions in order to be close to the consumers and satisfy all their needs.
The interview is supported by Philip Morris Bulgaria
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