Generic Diamond Advertisement Proves To Be Useless After Asian Crisis
2000: Generic Diamond Advertisement Cannot Revitalize Diamond Industry
De Beers Managing Director Gary Ralfe recently warned in a speech at the Israeli Rough Conference that the industry needs to advertise more if the market is to grow. He noted that Proctor and Gamble has an 11% advertising to sales ratio, and other luxury goods spend 6 to 10%. However, in the jewelry industry, the ratio was only 1%.
"I want to launch the plea that everyone in this industry considers how do we all contribute to the market of the product," he said. "I believe passionately that we will be able to grow the overall consumption of our product." He also said he welcome brands because brands lead to advertising.
"The excitement of new brands should bring revitalization to our industry, which on the indexes of the 90s was an industry in decline," he said. He added that he hoped that e-commerce would add excitement to the business.
Ralfe also indicated that De Beers would be changing its advertising: "Up until now we have been doing only generic advertising," he said. "This is a service to the business as a whole, which has been economically right for us. We intend to continue this, but at the same time we will be starting to experiment in perhaps more focussed advertising; seeing if we can help, particularly those clients of ours who might be buying those boxes from us which are not in fashion, to help them to develop market for the goods that we have in stock."
De Beers has already begun doing this with its campaign for the Millennium stones, which were mostly low-color stones that went out of fashion after the Asian crisis.
Ralfe also noted that the U.S. market grew 12% last year, the eight consecutive year of growth. American market consumption is now nearly 50% of the overall industry. But he noted that "if America’s GDP slows, if the economy falters, then we have to prepare ourselves, for what we are going to do about it." He also called upon the industry to make it certain that it stays clear of "combat diamonds."
"If we do not, the NGOs have said to me, ‘remember what happened to the fur trade,’" he said. "That should send a chill down our spines; it is something we need to take careful guard against."