Listen to the Story
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.
Also, check out our most loved stories below
Why did Michelin, a tire company, decide to rate restaurants?
Is ‘Michelin Star’ by the same Michelin that sells tires, yes, it is! But Why? How a tire company evaluations became most coveted in the culinary industry?
How to sell $380K bags: The Hermès Marketing Strategy Explained
Hermès has created a €36B empire and has customers spending sleepless nights to buy the products with its innovative marketing strategy. How?
Why you never see any social media post from Apple
Apple’s social media strategy is extremely unusual. In this piece, we connect Apple’s unique and successful take on social media to its core values.
Starbucks prices products on value not cost. Why?
In value-based pricing, products are price based on the perceived value instead of cost. Starbucks has mastered the art of value-based pricing. How?
Nike doesn’t sell shoes. It sells an idea!!
Nike has built one of the most powerful brands in the world through its benefit based marketing strategy. What is this strategy and how Nike has used it?
Domino’s is not a pizza delivery company. What is it then?
How one step towards digital transformation completely changed the brand perception of Domino’s from a pizza delivery company to a technology company?
BlackRock, the story of the world’s largest shadow bank
BlackRock has $7.9 trillion worth of Asset Under Management which is equal to 91 sovereign wealth funds managed. What made it unknown but a massive banker?
Why does Tesla’s Zero Dollar Budget Marketing Strategy work?
Touted as the most valuable car company in the world, Tesla firmly sticks to its zero dollar marketing. Then what is Tesla’s marketing strategy?
The Nokia Saga – Rise, Fall and Return
Nokia is a perfect case study of a business that once invincible but failed to maintain leadership as it did not innovate as fast as its competitors did!
Yahoo! The story of strategic mistakes
Yahoo’s story or case study is full of strategic mistakes. From wrong to missed acquisitions, wrong CEOs, the list is endless. No matter how great the product was!!