After a 20 year period of limited marketing, the diamond industry seems to have been prodded into aggressive marketing campaigns by the limited demand for diamonds.
Even mining giant De Beers has increased its budget for marketing, as Chief Financial Officer (CFO) Gareth Mostyn told the media last week that in addition to the overall $100 million that De Beers spends in marketing every year, largely through its Forever Mark brand, an additional $20 million was injected into the overall marketing budget at the end of last year.
“Recognizing that conditions were really tough we took the decision to invest an additional $20 million in a marketing program, primarily on America and China,” said Mostyn.
He explained that the focus on those two markets came from the fact that they comprise between 55 to 60 percent of De Beers’ overall global demand for polished diamonds. While the increased marketing budget was in response to the weak market conditions, it can also be viewed as a shift in the way the company has previously conducted its marketing campaigns. Experts have posited that because of its significant market share in the global diamond trade, De Beers did not need to engage in vigorous diamond marketing campaigns in the past. It seems therefore that with the dynamic changes that have taken place in the diamond market, De Beers can no longer afford such a lax approach.
Mostyn highlighted that the additional marketing budget helped to support and encourage growth in demand, which was observed during the Christmas season in America. He said that feedback received from retailers was that the campaign proved to be successful and had a significant impact in the market. “We haven’t just put money into marketing to drive the short term; we remain very focused and very confident about long term fundamentals. That means we will continue to invest in growth projects like the Cut 8 project in Jwaneng which are anticipated to maintain our leadership position,” said Mostyn.