Diamonds were naturally worthless, a marketing strategy changed it

If you love diamonds, stop reading. But if you’re going to buy one soon, buckle up, this will hurt. Diamonds are forever is nothing but perception based on a perfect marketing strategy.

The perception of them is that they’re rare, precious, and a status symbol. Also, needless to say, it’s a no-brainer for proposals among cosmopolitan urbanites. The average diamond engagement ring today is sold at $3000 based on just that.

The truth about its rarity is in fact, far from it.

“Diamonds are intrinsically worthless, except for the deep psychological need they fill.”

British diamond mining company De Beers chairman Nicky Oppenheimer, 1999

Contrary to popular beliefs, clear diamonds aren’t in short supply either. 

Until just decades ago, diamonds weren’t the girl’s best friend. How did that change? De Beers created a monopoly and materialized love. That’s right. Their value today is manufactured by a marketing strategy!

Today, 75% of American brides and an increasing number of brides world over wear diamond engagement rings. In a Vogue India article, Kiran Datwani, founder, Gehna Jewellers advises grooms-to-be, “ Though every stone can be considered as an option, nothing says an engagement ring like one with a diamond on it. Opt for the nicest ring you can afford.” 

What’s the history behind this excellent marketing strategy of Diamond?

What sounds like an age-old tradition now, didn’t become popular until 1947. 

Historically, India was the first known source of the gem. These were crafted into jewels for its ruling class and those abroad by the 1700s. In the 1800s, massive mines of diamonds were discovered around the world, mainly in South Africa, making diamonds easily available. 

Hence De Beers, the mining company in the region recognized the need to hence craft what is referred to by journalists,“the diamond invention-creation of the idea that diamonds are rare and valuable, and are essential signs of esteem.” But how?

Here is a breakdown of the De Beers Marketing Strategy. This strategy has taught generations of Marketers.

Control the supply – limited availability equals exclusivity

At the height of its power in the early 1900s, De Beers absorbed all South African mines and controlled 90% of the world’s diamond production. Of course, in today’s world, the cartel-like strategies used to enforce monopoly wouldn’t fly so easily. It bought independent producers, produced similar gems when competitors refused to join, purchased all of their competition’s gems, and during the Great Depression, bought diamonds at a significantly lower price.

For them to dictate prices and fully control supply in the market, they realised the need to make sure that no one resells diamonds. 

That’s when they went to ad agency N W Ayer & Son, who crafted the best slogan of the 20th century according to Advertising Age: “A Diamond is Forever”.

Emotional and customer value marketing strategy – sell the idea of Diamond and not the product

Most agencies back then would’ve gone to offer sales, alternative packaging, or promotions. However, for a product to truly become part of a lifestyle, the strategy needs to sell an idea. The idea behind diamonds was love and lasting commitment. 

By attaching sentiments to diamonds, De Beers ensured that no one would resell their engagement ring. It also tapped into ‘the wedding’, an often once-in-a-lifetime deal where no luxury is spared for all parties involved. I mean, who sells their engagement ring? And if they aren’t resold, that would make their availability scarcer. 

Know your (real) customer

With the help of Ayer, De Beers pushed to popularise surprise proposals. In traditional heterosexual couples, the rings are meant to be worn by the women. However, they found out that when women were involved in the selection process, they picked cheaper rings. 

By encouraging surprise proposals, De Beers shifted the purchasing power to men, the less-cautious spenders.

Finally, brand positioning with influencer marketing strategy

The agency recognized that influencing the masses would require influence through the leading ladies of pop culture. Naturally, they sent diamonds to stars, first ladies of the state, and socialites.

In the late 40s, Ayer also arranged for 125 newspapers to cover the diamonds these women wore.

Soon, diamonds would appear as priceless luxury essentials everywhere. From Marilyn Monroe’s hit song to a James Bond film’s name. 

Today’s De Beers (still the globe’s biggest diamond company) controls just about 35% production of the world’s diamonds down from 90% in the 20th century. However, its legacy of ‘inventing’ the diamond is here to stay.

Interested in reading Luxury Business Strategies? Check out our collection.

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