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De Beers is a well-known
international diamond mining and trading company, but when it comes to diamonds
purchase, the customers seem to be more interested in other sellers. As a matter
of fact, this is terribly unfair as the De Beers Group not only has a remarkable
history among other oldest jewelry companies and is probably the largest company
on the world market (it controls over 40% of diamond sales turnover). Besides, De
Beers gets the credit for promoting diamonds to the unreachable Olympus of fame
and glory. Why, then, people neglect its products? To answer this question, we
should take a look at this distinguished and versatile company from different
points of view.
What are
they? Are they diamond miners or a jewelry firm? Today, their mining and
gem-cutting activities are hardly separated. The story began in the late 19 century:
a man named Cecile Rhodes, the son of a British parish priest, a plain and
unremarkable figure in those days, arrived to Africa to be a farmer. But here he
fell dangerously ill with a severe case of «diamond rush» - a variation of the well-known
gold rush. The only difference is that it is not pelf that one always sees before
his eyes, but sparkling diamonds.
Everyone knows
that Fortune is a wayward lady; there was little success in Rhodes's search for
diamonds. But life is unpredictable, and for a while Rhodes occupied himself with
supplying water and goods to the miners, and managed to save a small amount of diamonds
and founded De Beers Company. We must admit that the man was rather modest and called
his brainchild not by his own name, but by the name of the owners of the land
rich in diamonds. Or, probably, he tried to add to his firm an aristocratic
touch and took advantage of the name famous among the rich.
Then everything
was quite unpoetical, to conquer the world market and create diamond mining monopoly
was not a challenge for him: the majority of discovered deposits were situated
in Africa and monopolists hurried to lay hands on them. And De Beers became pioneers
in this segment that offered prospects of quick profit. The competitors had no chance
to know about the existence of diamond deposits, let alone repurchase them. Surely,
if you don't have a full control over the industry, from top to bottom, there is
no sense to compete with a company that has it. To prevent other jewelry firms from
reaching the level of the De Beers Company, the owners of the company sorted
diamonds out into dark-colored boxes and summoned 100 - 200 of their richest
customers, offering them to purchase those sets. They could set any price; after
all it was limited only by the appetite of the managers. What could everyone
else in the business do? The major investors in the diamond business realized
that they had no choice but to merge their interests into a single entity that
would be powerful enough to control production and perpetuate the illusion of
scarcity of diamonds. There was no other seller of jewels, and reselling the
contents of those boxes was strictly forbidden by the contract with the
deliverer.
However, even
such tycoons as De Beers relax and lose the grip of the situation at some point.
Lev Levayev, one of the customers of the diamond-mining company, unexpectedly
became a competitor of the old firm. He turned to own diamond mines, he managed
to contract with former associates of the monopolist. This fact surely did not bring
the fall of the De Beers, but they lost more than a half of diamond market.
And this was
one of mistakes of the satiated and dreadful constrictor known as De Beers. They
banked on diamond mining, being absolutely sure to find consumers on jewelry market.
They had brilliant ideas! Take, for example, the best-known slogan of the past
century «Diamond Are Forever». De Beers needed a slogan for diamonds that
expressed both the theme of romance and legitimacy. An N. W. Ayer copywriter came
up with it in 1948, exclusively for De Beers. Even though diamonds can in fact
be shattered, chipped, discolored, or incinerated to ash, the concept of
eternity perfectly captured the magical qualities that the advertising agency
wanted to attribute to diamonds. Within a year, "Diamonds Are Forever"
became the official motto of De Beers. The
company tried to persuade the public that a diamond was not a bauble; it was a sign
of status and noble taste, that a diamond was not a thing for the select few. You
may be a simple salesgirl - but by wearing diamond earrings you express your nobility.
De Beers succeeded in converting tiny crystals of carbon into universally
recognized tokens of wealth, power, and romance. For 60 years this motto has
been marching across the world, and people have bought and presented engagement
diamond rings.
The overwhelming
financial crisis of nowadays may a real present for the De Beers, though it
sounds paradoxical. Owing to it, the demand for luxury products seems to relapse.
But now the company management runs back to its famous bargaining chip - good
publicity. Instead of putting down expenses they almost doubled financing of
marketing department for this year. Now precious stones would be marketed as
the most profitable investment, even more reliable than bank coffers. That is, diamonds
are never-failing, especially in such inconsistent economical situation! But diamond
mining is planned to be cut back this year - just to keep the cost of luxury goods
at present level.
So De Beers,
a humble company as it may seem, though staying in the background during its history,
prevails all the diamond market and reigns in the hearts of the consumers. The
ideas of De Beers in publicity are everlasting, as well as the stones they mine.
And even the year of its foundation - 1888, seems to embody the slogan «Diamonds
Are Forever»!
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