M2 debeers segmentation case study Flashcards
why do diamonds have no inherent value
they are abundant; de beers controlled the supply to make them appear rare
what arguments did de beers make to convince us diamonds are valuable
1) they’re an investment; they accrue value (false)
- actually depreciate
- karats are not fungible/interchangeable like dollar bills
2) they’re forever; you can’t part with them
why are diamonds seemingly rare
- initially were only mined in india and brazil
- became more abundant when found in south africa
- african mine investors bought/merged mines and created de beers corporation to regulate the diamond supply so they wouldn’t lose their value
engagement ring sales in the US dropped during the depression; what did de beers do to keep sales up?
new marketing campaign/segment
- make diamond engagement ring a necessity for every couple getting married
- equate diamond with love
de beer’s marketing problem as they sought after new engagement segment
- violating US antitrust laws
- couldn’t have ads that referenced de beers or jewelry
3 ways de beers equated diamonds with love
1) made them emotional
- they’re a gift of love
- bigger = more love
- tie diamond to man’s success
2) diamonds are forever
- remind ppl they’re an investment
- don’t part with them
3) rings as collateral
- monetary commitment from the man; shows he’s going to follow through and marry the woman, not just have sex with her
how did de beers market if they couldn’t reference the company or jewelry
- francis gerety came up with slogan “a diamond is forever”
- other quotes to emphasize emotional aspect
de beers’ other marketing strategies
- US diamond sales increased –> people saw them more without de beers really trying
- newsletter about celebs wearing de beers diamonds
- speak to young girls at school
- gift or lend jewels to celebs for events
why did de beers attempt to expand and market diamonds for men fail
- already spent so much time associating buying a diamond with masculinity
- new campaign made it seem like women were the providers
how did de beers deal with its surplus of small diamonds
come up with arbitrary 4 c’s (carat, color, clarity, cut) to justify buying a good quality small diamond
invent eternity ring with 25 small diamonds representing recaptured love (for an anniversary/milestone)
other segments de beers tapped into after the great depression
- engagement rings gained traction in germany, brazil, japan; became symbol of modern life/western values in japan
- arbitrary benchmark for amount of money a man should spend on a ring (3 mo salary)
- targeted successful women who valued themselves/could buy their own diamonds
- diamonds are for friends and male celebs too
goal of de beers 2024 holiday campaign; what did they do to try and achieve it?
- increase sales of natural diamonds
- revived slogan “a diamond is forever”
- reinforced idea that natural diamonds = emotional value and allow memories to remain forever present
how did de beers discourage competition
the monopoly benefitted everyone because de beers controlled the supply and kept prices high
- if competitors threatened them, they could flood the market and drive prices down –> hurts everyone
what led to downfall of de beers monopoly
russian, austrailian, and canadian mines stopped going through de beers to sell diamonds
de beers lost lawsuits and had to pay millions in settlements
2 alternatives to natural diamonds
1) moissanite
- meteor dust
- campaign: you deserve something beyond the earth; something from the stars
- more sparkly than diamonds –> too sparkly for some
- cheaper than diamonds
- clear but may have some discoloration as with diamonds
2) lab grown diamonds
- essentially identical to natural diamonds
- cheaper
- better for the earth/no child exploitation
- some pushback/idea that fake diamonds = fake love/are cheap/not masculine
is the market trending towards natural or lab grown diamonds?
- number of people buying lab grown is increasing but not necessarily because people are buying lab over natural (new people are entering diamond market and buying lab)
- pandora/largest jewelry company is only lab grown
typical buyer for lab grown diamonds
under 40 years old (younger generations are more ethical)
budget conscious
