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Advertising Diamonds


Sep 6, 2012 5:03 AM   By Avi Krawitz
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RAPAPORT... Sanjay Kothari is on a mission. As vice chairman of the Gem & Jewellery Export ‎Promotion Council (GJEPC), he took every opportunity at the recent India International ‎Jewellery Show (IIJS) to stress the need for effective generic advertising in the diamond ‎industry. ‎

In a challenge to other industry bodies, Kothari announced that the council intends to ‎procure $10 million to spend on diamond jewelry promotion in India over the next three ‎years. The World Diamond Congress (WDC) took the bait and placed the promotion of ‎diamonds on the agenda of its biennial meeting in Mumbai this October.‎

Kothari’s call was natural and necessary given current market conditions. The generic ‎marketing idea tends to gain momentum during a downturn. The now-defunct ‎International Diamond Board (IDB) was born out of the crash of 2008-09. When money’s ‎tight, the industry tends to lament its lack of marketing as consumers cut back on their ‎discretionary purchases, or turn to cooler, trendier and more fashionable items. The latest ‎tablet, phone, handbag and flat screen TV are just some of the competitors facing ‎diamonds today. ‎

There is no doubt, the diamond industry needs to up its game and a generic campaign of ‎sorts would certainly help the cause. But the industry must be careful not to put too much ‎reliance on such a promise, especially given trends in today’s consumer space.‎

Consumers have become increasingly brand conscious and are looking for real, ‎experience-based products that are authentic, personal and memorable – all of which are ‎inherent in the diamond story. However, the long-term message is much more effectively ‎transmitted through competitive brand-based campaigns. ‎

A 2004 study by researchers at the University of Texas in Dallas and the University of ‎Central Florida, “Generic and Brand Advertising Strategies in a Dynamic Duopoly,” found ‎that generic advertising is proportionally more important in the short term, while there are ‎free-riding effects that lead to sub-optimal industry expenditure on generic advertising ‎that worsen as firms gain a more balanced market share. In other words, while the initial ‎spend on generic advertising helps lift weaker firms, its impact gradually wears off. ‎

‎“Due to free-riding by the weaker firm, its instantaneous profit and market share can ‎actually be higher,” the researchers wrote. “The effectiveness of generic advertising and ‎the allocation of its benefits, however, have little effect on the long-run market shares, ‎which are determined by brand advertising effectiveness.”‎

Certainly the industry could do with a short-term push that generic advertising could ‎provide. But as a long-term strategy, it would do better to raise the advertising bar among ‎its own brands as a means to increase its competitiveness against other industries. ‎

While the old De Beers generic campaigns were arguably the most successful in history, ‎the company’s move to brand-focused marketing may well prove to be more effective. ‎

In fact, in the few years since De Beers scrapped its generic marketing spend, the ‎diamond trade has made significant strides to becoming more brand-oriented. This year’s ‎fourth quarter holiday season is expected to produce more diamond brand advertising ‎than ever.‎

De Beers, for one, is expanding its Forevermark campaign beyond the U.S. The ‎company is taking its ‘Forevermark Promise’ idea to other markets, launching television ‎and cinema advertising campaigns in India for the first time. Rio Tinto has also upped its ‎diamond marketing ante – despite its stated intentions to divest from the industry – and ‎also appears to be taking a regional approach. ‎

Rio Tinto has launched its Nazraana brand in India, as it pushes diamond gift giving in the ‎country. It has also teamed up with Hong-Kong-based jeweler Chow Tai Fook to promote ‎fashion jewelry in China, and recently launched its “Diamonds with a Story” initiative at ‎the JCK Luxury show in Las Vegas – a move that aims to inform diamond buyers, ‎manufactures and consumers about the unique source and personality of the company’s ‎diamonds.  ‎

A panel discussion at last week’s Rapaport International Diamond Conference (IDC) in ‎Mumbai stressed that branding is the most effective way to create and capture new ‎demand for diamonds, as well as adding value to the product.‎

‎“We want to sell each diamond at a better value and this is achieved through branding,” ‎Mehul Choksi, chairman of the Gitanjali Group, said in the discussion. He added that ‎branding is the most effective way to reveal the emotional appeal of diamonds. Rio ‎Tinto’s Vikram Merchant agreed and urged retailers to “sell the story of the diamond, ‎rather than just focus on the four C’s.” ‎

Few argue that diamonds present the ultimate marketing opportunity, given their ‎investment and emotional allure. But only a few brands have been able to capture that in ‎a significant manner, leaving opportunities for others. ‎

Curiously, it is still the mining companies that are leading the branding charge, which may ‎be the root of Kothari’s and other’s frustrations. Perhaps it’s because the mining ‎companies have been down the generic route before. Once IDB failed, they recognized ‎the industry cannot rely on the mining companies to fit the marketing bill. The free-rider ‎effect would be too apparent and too quick to occur. ‎

Rather, the generic campaigns should be industry driven. And there should be more than ‎one, with each of the industry bodies leading the charge in their respective regions. For ‎this the GJEPC should be applauded and encouraged. But it should be aware of the ‎generic limitations that the branded product does not have. ‎

Consider that sales of tablets are not growing because of a new concept they represent. ‎They’re popular because Apple, Samsung, Microsoft, Google and Amazon are ‎competing to make them cooler, slicker and trendier. The more they compete to gain ‎market share, the more they enhance the generic appeal of their product.‎

It’s a tested theory that will apply to diamonds as it does any other. If the diamond ‎industry is to compete with the hottest gadgets and products in the luxury space, it must ‎show it has any number of equally trendy, stylish and well-designed diamond brands to ‎offer. Consumers, after all, are well aware of the emotional appeal and investment value ‎of diamonds. They just need competitive diamond brands to drive the message home.‎

The writer can be contacted at

This article is an excerpt from a market report that is sent to Rapaport members on a weekly basis. To subscribe, go to or contact your local Rapaport office.

Copyright © 2012 by Martin Rapaport. All rights reserved. Rapaport USA Inc., Suite 100 133 E. Warm Springs Rd., Las Vegas, Nevada, USA. +1.702.893.9400.

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Tags: Avi Krawitz, De Beers, diamonds, Forevermark, Gem & Jewellery Export Promotion Council, GJEPC, Nazraana, Rapaport, Rio Tinto, Sanjay Kothari
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