Description

This episode explores how De Beers Consolidated Mines, a South African cartel, achieved a near-monopoly in the diamond industry by manipulating demand rather than just controlling supply. The pivotal move was transforming diamonds from a commodity into a symbol of romantic love and commitment.

The Challenge: In the early 20th century, diamonds were losing their appeal as engagement symbols, with new diamond sources increasing supply and decreasing demand. The industry needed to shift the perception of diamonds from a tradable commodity to a meaningful, ritualistic object.

The Solution: Partnering with N. W. Ayer & Son in 1938, De Beers launched a campaign to associate diamonds with enduring love and marriage. Ayer conducted market research to understand consumer attitudes and develop targeted advertising.

Key Strategies:

• Category Advertising: Promoting diamonds as a category rather than a specific brand, benefiting from the cartel's control over the market.
• Price and Value: Addressing men's concerns about price by introducing the "4Cs" (carat weight, color, cutting, clarity) and suggesting that two months' salary was an appropriate amount to spend.
• Emotional Appeal: Using fine art, poetry, and the slogan "A Diamond Is Forever" to create an emotional connection between diamonds and everlasting love.

• Discouraging Resale: Reinforcing the idea that diamonds should be kept within the family as heirlooms, thus eliminating the aftermarket and ensuring continued demand.

Global Impact: The De Beers campaign successfully ingrained the diamond engagement ring tradition in cultures worldwide, including Japan, where it was not previously common.

Modern Tactics: De Beers continues to innovate by promoting anniversary diamonds and other diamond jewelry, encouraging consumers to deepen their commitment and spending.

Source: Twenty Ads That Shook the World: The Century's Most Groundbreaking Advertising and How It Changed Us All by James B. Twitchell