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Marketing
Sep 4, 2003 2:31 PM
By Martin Rapaport
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The concept of marketing is so simple that it is infinitely complex. “Meet the needs of your customers,” says the man on the soapbox. “Get the right products in the right place at the right price at the right level of promotion,” write the gurus. It all sounds so easy. Too easy.
There is nothing more frustrating for a serious diamond person than sitting down with an expert who tells you obvious things that you already know. Then the “marketing guy” takes fifty thousand dollars to write some fancy report that repeats back to you what you have told him. What is going on here? Is marketing a con game? If marketing is so simple, then why are we having such a difficult time understanding it?
The problem for many of us in the diamond trade is that we are diamond people — people who have based our livelihoods on our specialized skills in dealing with a physical product. We know everything about diamonds: How to sort them, price them, cut them and slice or dice them into thousands of well-merchandised assortments. For centuries, we have been product people.
The problem with marketing is that it is an idea and not a product. Think about it: When is the last time that you bought an idea? Have you ever shopped in an idea store? How and where do you buy ideas? Shopping for ideas, buying and using them, is a very tricky business. You can’t put an idea in your pocket. Ideas have no beginning and no end. They float around in your head in a cloud of concepts. Even when you write ideas down, they have the power to change, the power to be wrong.
Let’s face it: Many good, honest, decent diamond people have just had their distribution channels closed by the Diamond Trading Company (DTC). Marketing is probably the dirtiest word in the diamond dictionary right now. Perhaps we should blame De Beers and the DTC for SOCing (Supplier of Choice) it to the diamond industry. Perhaps we should blame the new, modern, exponentially changing and challenging marketplace. Perhaps we should blame ourselves. In the end, it doesn’t matter. Growth, development and survival are not about blame. They are about constantly reinventing ourselves to meet the challenges of the future. They are about having a positive attitude. They are about picking ourselves up off the floor, meeting our challenges head on and having a good time destroying our competition with every tool we can develop — including, and especially, marketing.
The bottom line is that the diamond industry must truly transition from being in the business of products to being in the business of ideas. Some folks might think that they have already made it, that they understand marketing because they have retained their DTC sight. They are wrong.
The great war over the future of the diamond industry is just now beginning. It shall be a war of ideas. Little people with big ideas will destroy big people with little ideas. Everyone — including, and especially, big firms such as De Beers — are at risk. Ideas have no limits. Ideas are more important than the products they sell. Ideas are bigger and more powerful than the greatest diamond mines.
It is the people with ideas who will own and control the diamond market. People who know how to create demand for diamonds will dictate terms to those who merely know how to mine diamonds. Though they might not realize it yet, De Beers, to its everlasting credit, has started something that it will not be able to control. Marketing competition will democratize the
diamond industry. If De Beers monopolistic market power is fairly regulated, it is only a matter of time before the people who know how to sell diamonds take control of the market from the mining companies. Perhaps the DTC will save De Beers profit margin, perhaps not. In the end, it will depend on competition; not product-based market competition, but idea-based marketing competition.
Marketing Ideas
Marketing ideas have unlimited power and come in all shapes and sizes. In some instances, we create products to meet demand, and in other instances, we create demand to meet products. One person might simply advertise the sale of umbrellas while another seeds the clouds to create rain and umbrella demand. At a simplistic level, marketing often depends on how many umbrellas you have and the cost of seeding clouds.
Higher-level marketing takes you into much more powerful areas of idea/product development. Consider the three-stone diamond ring. Such rings sat in showcases for years doing absolutely nothing. Then DTC marketing came into play. Interestingly, the DTC was not looking for a way to help retailers sell off existing three-stone ring inventory. It was developing a big idea that would increase demand for diamonds by relating diamonds to a perceived psychological need of a woman to have a post-engagement ring symbol of her relationship with her man. As a result of extensive research, the DTC created a three-stone ring marketing idea that emphasizes the past, present and future of the relationship between a man and a woman.
Then, bang — three-stone rings took off. Obviously, what is selling these rings is not the gold, not the diamonds, not the physical product at all. What is selling these rings is the idea behind the product.
Think about this: When a woman gets a three-stone diamond ring, what is the most important thing that she is getting? Is it the ring or is it a symbol of her husband’s continuous, committed loving relationship with her? What is making this woman happy? Is it the ring or the relationship with her husband? What should we be selling the man who buys the ring for his wife: the ring, or the idea behind the ring?
The three-stone diamond ring is proof positive that the idea sells the product and that the idea behind the product is more important than the product.
The Promise of Diamonds
When a guy gives a girl an expensive watch and she shows it to her friends, they say: “My, isn’t he generous.” If he gives her a fur coat, they might say something like: “He really likes you.” Now, when he gives her a diamond, her friends say: “Wow, you got him!”
When a man gives a woman a diamond engagement ring, she is extremely excited. Think about it: What is she so excited about? Some diamond people or jewelers might think that she is excited about the ring. But that is absurd. This woman did not just get a ring. She got something much more important: She got a man! She got a committed relationship from a man she loves. She is jumping up and down with excitement because she has just gotten a husband. The only reason the diamond ring is important is because it symbolizes something more important to them — their relationship.
It is high time for the diamond and jewelry industry to understand that while the quality and value of the product is important, we are not in the business of selling products. We are in the business of selling the idea behind the products.
Jewelers who focus their sales approach on the technical aspects of diamonds and jewelry will be challenged by a new generation of jewelers who will become expert at selling the idea behind the product. Some consumers need more product information and/or are value driven, but just because you have technical expertise does not mean that is what your customer wants, or what you should be selling.
Luxury marketing is about meeting and exceeding the desires of your customer. The sale of a diamond is about what she is getting. It is about what he is getting. It is absolutely not about what the jeweler is getting.
Jewelers who merely focus on price and product quality don’t get it. They should think deeply about the primary motivations of their customers. They should retrain their staff and rewire their minds so that they are capable of understanding and selling not just the product but the idea behind the product. It is this idea that is creating the consumer demand for the product and it is the idea that the consumers want to make sure that they are getting fulfilled.
When a young man asks if his girlfriend will like a particular ring, he is not necessarily looking for a lecture on diamond quality. He wants your assurance that the idea of getting the diamond will turn her on. By all means, make sure that you sell a quality product, but stop torturing your customers with table percentages. Give your customer the assurance that the idea behind the product works and let him go.
Marketing Power
Marketing not only has the ability to help us develop existing demand, it also provides a way to create new demand. The marketing of luxury products in general, and diamond jewelry in particular, seeks to address the fundamental psychological needs and desires of modern-day consumers. If we can direct and map such consumer needs and/or desires onto our products, we can create new categories of demand for diamond jewelry.
People who think that diamond demand is inherently weak because diamonds are a luxury product do not understand the needs of modern society and the unlimited potential of luxury demand. As global wealth increases, demand for symbolic tokens will far outpace demand for functional utility products. How many washing machines will a wealthy woman wish to buy? How many diamond rings will such a woman desire? Once society surpasses a given level of wealth, utility-driven, product-based demand gives way to psychological symbol-driven, idea-
based demand.
Consider the new DTC diamond Right Hand Ring program. By now, it should be clear that this program is not really about right-hand rings. It is about an idea. It is about a woman. It is about the psychological need of women for self-expression, self-affirmation and self-fulfillment. The need and desire of a woman to say, “I have made it.” The idea that a woman defines herself as being more than just a wife, more than a lover, more than a mother, but someone who is independent, someone who is strong enough emotionally and financially to buy a diamond ring for her right hand without a man.
The DTC is working to connect the research-proven psychological need of women for self-expression to diamond rings. Not just any diamond ring, but a right-hand “ME” ring instead of a left-hand “WE” ring. What is interesting about this program is that the DTC does not need to create new demand (i.e., make rain). They simply have to connect women’s existing demand for self-affirmation to right-hand rings. Right now, many woman buy themselves things to reinforce their sense of self-worth. What is great about the DTC program is that it is encouraging women to focus on a united symbolic product that quickly communicates to them, and to others around them, that they have “made it.”
A woman’s need for self-expression was just sitting there waiting to be developed. If the colored-stone industry had their act together, perhaps they would have come up with a “ME” ruby ring or some other product to link to the idea of a woman’s psychological need for self-expression.
While the diamond Right Hand Ring products will be well- defined by the DTC marketing campaign, the most important aspect of the campaign is the development of the marketing idea that recognizes and fulfills women’s desire for self-affirmation. When you sell a right-hand ring, you are selling the idea behind the ring. Remember, women do not need right-hand rings. They need a way to say, “I made it.” And that is what you should be selling.
Conclusion
While we have shed some light on the infinite power of marketing, much more needs to be shared on this topic. We have not yet discussed the concept of branding, which is one of the hottest marketing topics and will be addressed in a future report. Our immediate objective is to encourage our readers to think about the power of ideas and to develop alternate ways of conceiving their role in the diamond and jewelry trade.
We must recognize that marketing is not just another facet of our business. As we rapidly evolve from a product-based, skill-driven diamond trade to an idea-based, strategically driven diamond jewelry industry, we must integrate marketing-based theory into the core of our identity. For all too long, diamond people have identified solely with their product. It is now time for us to fully align ourselves with the ideas behind our products. We must evolve our thinking and change our way of doing business if we are to meet the needs of the future. The future will belong to those who have the ability to create it with their ideas and imagination.
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Tags:
Consumers, De Beers, DTC, Jewelry, Luxury Products, Mining Companies
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