De Beers And The Diamond Industry
When De Beers first started actively mining in the late 1800's, they had heavy competition. By forming the De Beers cartel, they were able to control the release of diamonds into circulation. De Beers began to use the controlled scarcity of its diamonds as the center of its advertising campaigns. At one point in history, it is stated that De Beers had control over 80% of the diamond market, today’s estimates are far lower at 40% to 50%, however it is still enough to have strict control over prices and supply. De Beers has control of the mines and sells their gem grade diamonds to its subsidiary the DTC (Diamond Trading Company) for cutting and polishing. De Beers has been extremely successful in its marketing strategies.
The center of their marketing strategy is linking diamonds with long term romantic love. Engagement rings have been present in many cultures since the 1400's, but they typically did not contain diamonds. De Beers is considered to be responsible for making the diamond engagement ring the standard in the United States and elsewhere. They also have used their own marketing skills to establish a standard amount that future grooms should spend on a diamond ring. It is typically considered socially correct for a man to spend the equivalent of one to two months salary on the diamond ring he purchases.
De Beers even includes this spending guideline on their website. The De Beers slogan, "A diamond is forever" has continued to be one of the most successful catch phrases in advertising history. De Beers worked diligently to connect their diamond rings with the idea of everlasting love. The slogan is also intended to establish the idea that a diamond is something that should be kept by the recipient and not resold. De Beers hopes this will encourage the purchase of new diamonds rather than purchases through the secondary market. Because of De Beers, the diamond has continued to increase in value as people around the world make a connection between purchasing a diamond and their long term love relationships.
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