De beers case study

World sales of diamonds had slowed down due to the negative publicity of diamond revenues financing wars in Africa (2, 3). In addition, diamond sales in China had fallen due to an economic recession and a government crackdown on corruption that had led to individuals avoiding any show of wealth (4). Looking forward, the millennial population was expected to reach its most productive age by 2026 and capturing this demography was critical for the diamond industry. Specifically, the millennial population was expected to be getting married but it was not; at the age of 27-29, only 29% were married compared to 40% of their earlier generations (5). The millennials entered adulthood burdened with huge debts unlike their parents and grandparents, making them incapable of affording diamonds (5). However, Laniado (2015) made a strong case for branding individual diamonds, stressing that all diamonds are not the same.

Laniado was emphatic that diamonds differ in quality, cut and source. He, therefore, suggests that diamonds need to be branded to emphasize their quality, their cut, and the source. The diamond expert cited the case of the Royal Asscher cut that has been patented as a unique cut that produced the most beautiful diamonds. Royal Asscher also observes a strict set of manufacturing standards developed by the company. As instruments of the demonstration of love, therefore, diamonds perform this duty perfectly. Millennials find the exorbitant expenditure on diamonds for engagement only worthless. Nevertheless, most millennials still rated diamonds as an item of high desire. Imagery According to Kapferer and Bastien (148), every product automatically evokes some image in the minds of customers depending on its brand.

The image is a product of customer perception with little influence from the manufacturer’s communication. Unfortunately, the high cost of natural diamonds and the availability of artificial diamonds led to the judgment that natural diamonds were unnecessarily expensive. The availability of other gems that resembled diamond such as moissanite made it worse. The movie Blood Diamond by Leonardo Di Caprio worsened the judgment of natural diamonds as propagators of human rights abuses, a major concern for millennials. The diamond industry, therefore, needed to reverse that harsh judgment through the establishment of the Kimberley Process. Resonance The diamond industry had succeeded in creating permanent loyalty in diamonds as the ultimate engagement gift. Laniado adds that besides the brand of the manufacturer, the customer perception of the retailer equally matters.

The expert suggests that diamond stores need to establish their own brand names as houses of quality. In this regard, the US luxury goods company Tiffany has created a brand of its own although it does not manufacture any of the goods it sells (Laniado). Instead, the store has acquired the reputation of selling the most expensive and premium luxury goods from the best manufacturers. Consequently, any item that finds itself on the Tiffany stores finds an endorsement of the quality and rare luxury. In terms of promotion, the industry has focused on communicating that their diamonds are authentic with no relation to conflicts through the Kimberley Process (2, 3). To counteract the threat of the artificial diamonds and other alternative gems, the industry has embarked on campaigns that position the natural stones as the “real” deal that demonstrates true love in the “Real is Rare.

Real is Diamond” slogan (6). The campaigns also acknowledge that diamonds are still meaningful outside the marriage institution (7). Distribution of diamonds is still limited, available in only 10 auctions worldwide every year (1). Print. Burger, Michael. Brand Equity and Brand Value: Explanation and Measurement. Norderstedt: Books on Demand, 2012. Print. Print. Laniado, Ehud Arye. “The Three Keys to Diamond Brand Power”. Rubel & Ménasché Diamantaires. 04 January 2016. There was, therefore, a ready market for the engagement rings as offering the woman the diamond ring was the preferred demonstration of love for the woman. The diamond ring served the purpose well because of its qualities of durability, rareness, and beauty. In the advent of the current cultural norm of individuals living without ever marrying, the restriction of diamonds to proposal rings limits the market for the gem.

There is no evidence to show that the millennials are likely to change their perception of marriage in the near future and this positioning will continue to affect the diamond industry. While the sales continue to grow nominally, the emergence of the millennials as the major players in the economy in a few years’ time will affect the industry catastrophically. In the following years, the industry recognized that millennials were marrying late and fewer but it retained the positioning of diamond as the show of love. The “A Diamond is Forever” and “Real is Rare. Real is Diamond” campaigns both focused on the marriage use of diamond. In view of the millennials’ abhorrence of marriage, this positioning will lead to a fall in the trade (4, 5) unless there is a change in millennials’ attitudes towards marriage.

The increased rate of divorces today and the difficult economic times, however, preclude any change in that direction. In the coming times when the millennials will be the major economic players in the world, the sales of diamonds will fall lower because these individuals place less importance to marriage than their predecessors do. The solution, therefore, lies in expanding the daily use of jewel diamonds beyond marriage. Furthermore, in the current state, men purchase the diamond jewels for the women and they (the men) themselves do not wear them. There is also evidence that millennials are wearing jewelry as daily accessories. Expanding the use of diamonds into the daily lives of both sexes would assure the industry of market for their jewels among the millennials.