De Beers "A Diamond Is Forever" Campaign
De Beers :
A Monopoly in the Diamond Industry
De Beers advertising slogan "A Diamond Is Forever" has been the center of its effort to establish the stone as the only appropriate gem to symbolize lifetime love and commitment. The more ad money spent, the more diamonds people buy. And when people buy diamonds, De Beers profits. It is the reason the company spends $180 million a year worldwide to advertise cut diamonds--a product it doesn 't even sell.
There are very few companies ... you may struggle to find even one, that has been the leader of its industry for its entire
- Miner and buyer of 70-90% of the world 's rough diamonds
- Buys rough diamonds directly from the diamond mine owners
- Cutters sell the cut diamonds to the dealers who in turn sell them to the jewelry stores.
- And still De Beers spends $180m a year worldwide to advertise cut diamonds--a product it doesn 't even sell!!!
Inefficiencies created by monopolies and Antitrust regulators in the U.S.
- Other commodity prices (e.g. gold, silver, grains) fluctuate greatly in response to economic conditions
20th century, De Beers sold 85% to 90% of the diamonds worldwide
2. Rockefeller 's Standard Oil and Gates ' Microsoft may have briefly approached this kind of dominance, but the length and extent of De Beers ' supremacy is unprecedented. Artificially keep diamond prices stable by matching its supply to world demand.
De Beers acts like the theory of monopoly predicts:
- It is almost the sole seller of diamonds (sells almost 90% of world production).
- Sells a commodity with no close substitutes (created this illusion by advertising)
- It restricts output and it responds to changes in market demand. When demand contracts De Beers cut back on its sales and vice versa.
GOAL: S=D for diamonds at a high Price
B) HISTORY(CREATION OF THE DE BEERS EMPIRE)
Before the 19th century, diamonds were exceptionally rare
-small quantities in India and Brazil
- no diamond mines were discovered
A Monopoly in the Diamond Industry
De Beers advertising slogan "A Diamond Is Forever" has been the center of its effort to establish the stone as the only appropriate gem to symbolize lifetime love and commitment. The more ad money spent, the more diamonds people buy. And when people buy diamonds, De Beers profits. It is the reason the company spends $180 million a year worldwide to advertise cut diamonds--a product it doesn 't even sell.
There are very few companies ... you may struggle to find even one, that has been the leader of its industry for its entire
- Miner and buyer of 70-90% of the world 's rough diamonds
- Buys rough diamonds directly from the diamond mine owners
- Cutters sell the cut diamonds to the dealers who in turn sell them to the jewelry stores.
- And still De Beers spends $180m a year worldwide to advertise cut diamonds--a product it doesn 't even sell!!!
Inefficiencies created by monopolies and Antitrust regulators in the U.S.
- Other commodity prices (e.g. gold, silver, grains) fluctuate greatly in response to economic conditions
20th century, De Beers sold 85% to 90% of the diamonds worldwide
2. Rockefeller 's Standard Oil and Gates ' Microsoft may have briefly approached this kind of dominance, but the length and extent of De Beers ' supremacy is unprecedented. Artificially keep diamond prices stable by matching its supply to world demand.
De Beers acts like the theory of monopoly predicts:
- It is almost the sole seller of diamonds (sells almost 90% of world production).
- Sells a commodity with no close substitutes (created this illusion by advertising)
- It restricts output and it responds to changes in market demand. When demand contracts De Beers cut back on its sales and vice versa.
GOAL: S=D for diamonds at a high Price
B) HISTORY(CREATION OF THE DE BEERS EMPIRE)
Before the 19th century, diamonds were exceptionally rare
-small quantities in India and Brazil
- no diamond mines were discovered