Bioderma On Meeting Global Demands
Country Director of Bioderma for Bulgaria and Serbia, Mira Draganova, met a group of AUBG students in Andrey Delchev Auditorium on Thursday, March 20. She discussed the challenges of aligning local specifics with global dynamics using an example of the cosmetic industry.
Draganova graduated from the Russian Language School in Sofia and studied in several universities in Paris. She got her degree in finance and information systems and strategic management in Dauphine University. Then she worked in the internal audit department in L’Oreal, a market leader in cosmetic industry, from 2001 to 2004. She was a CFO (deputy country manager) in Serbia from 2001 to 2004, where she was also in charge of developing the business in Bulgaria. Since 2009 Draganova is in charge of the subsidiary of Bioderma in Bulgaria and is now a regional manager for Serbia and Macedonia.
Draganova presented a plan of her presentation. First came facts and figures about the cosmetic industry. “If we look into the worldwide cosmetic market, at the end of 2012 it amounts to 184 billion euro,” Draganova said.The biggest market is in Europe, mainly the western part. The second area is Asia, and the third place goes to North and South America. The top 30 countries amount to 80 % of the total cosmetic business. The US, Japan, China, Brazil, Russia, South Korea and other European countries are top ten. By 2017, the US, Brazil, China, India and Indonesia are estimated to be the top five.
“If we look at the cosmetic business, there are several types of brand positioning: mass market, selective brand, dermo-cosmetics and professional hairdressers. Positioning of the brand is correlated to distribution channels,” said Draganova. 184 billion are distributed between pharmacies, para-pharmacies, Internet retailing and others, which mainly cover supermarkets and department stores.The top players in the cosmetic industry are L’Oreal, Pierre-Fabre, Naos Groupe, Beiersdorf, and Ales Groupe.
Then Draganova gave a definition of dermo-cosmetics: it is cosmetics developed for particular skin conditions and diseases, which is mainly distributed in pharmacies.
“If a company wants to become an international player, it has to enter a foreign market. There are two possible solutions: either you go and open a subsidiary or you sign up a contract with a local distributor, which are normally multibrand.” Draganova summarized the pluses and minuses of both approaches.
“When you create a subsidiary, you have the possibility to control everything and you are ensured in this sense. But the financial risk and the amount of investment you make is quite high. So if the country is not so stable and the legislation at an emerging market might be complicated, the companies mostly prefer to go via a distributor, which seems much simpler and more secure in financial sense.”
Draganova continued with three key words defining Bioderma: biology, dermatology and innovation. “We study the skin in order to produce relevant products – this is the philosophy of the owner of Bioderma, Jean Noel Thorel.” Innovator in his soul, Thorel set the brand on the market 30 years ago.
Draganova demonstrated how Bioderma started their business in France and then used the same strategy to develop the business in other countries. “We approached leaders in dermatology and started working with dermatologists.We open the retail and start looking for positioning in the pharmacies, meaning that we really care how we are presented. Only after that we start talking to the final consumers.” The way Bioderma talks to the final consumers is consistent with its business model. “We don’t use mass-market approaches: we don’t do TV, outdoors. We do advertisement but mainly in professional magazines. “
Draganova spoke about the development of Bioderma over the years. Until 2002 it was distributed only in France, but then went international to become a market leader. Bioderma has its headquarters in France, three international offices in Dubai, Singapore and Mexico, 22 affiliates, and over 60 distributors. From the important markets, the USA and Scandinavian countries are missing.
In Bulgaria Bioderma started with a distributor. “They did a great job, but they didn’t know how to handle a pharmacy, how to do the retail. We developed very fast and then we were stagnating. All the competitors who entered the market after us and before 2008 overpassed us,” Draganova said. The subsidiary was created in 2008. “We were # 8 in the market. All the other competitors didn’t see us coming, they thought we are so small and we weren’t worth paying attention to. In four years we managed to become # 2, and we have an ambition to become # 1 by the end of next year.”
The lecture was followed by a question and answer session.