Tuesday, 1 January 2008

Well Oiled Campaign

Salman Rushdie, in his satirical novel The Satanic Verses, describes a carpet manufacturer who made wool from the strands of hair picked off the barbed wire at the bottom of farm fences, caught there after lambs stuck their heads through to get at the grass outside. Instead of admitting his was an inferior product made from the cheapest waste product, he advertised his carpets as 'Made from the wool plucked from the throats of baby lambs,' and sold them at a premium to great success.

In marketing psychology our class discussed if this was ethical. One classmate pointed out it is no less so than selling bits of pebble for thousands of Dollars per carat just because they are perceived as rare. This point, greeted by exaggerated groans from half the class is actually difficult to completely discount, but it does rather miss the point. Because modern advertising is about creating an aura and image the consumer can buy into and substance has nothing to do with that. If I can convince the market my product has indefinable properties that make it worth my asking price, the intrinsic cost becomes irrelevant and the market price becomes its new value. That is why it is not unethical to sell a painting by Van Gogh for USD 60 million when the actual canvas and paint are intrinsically worthless.

The diamond industry were pioneers in the field of marketing when De Beers first launched their Engagement ring. It retained its prominence through the years with campaigns like Shadows - by stressing not only the (debatable) rarity of diamonds but more importantly their almost magical properties as symbols of love or, in today's zeitgeist, forever. Yet they have erred in allowing the retail market to be ruled by specs., which are and should remain essentially the tools of the industry. It is remarkable that most consumers can spout lengthy lists of numbers and letters to describe the diamonds they have bought yet very few will know the torque or horsepower of the car they drive.

Mercedes make great cars and everybody knows it. Great for their superior engines, exceptional design, top quality workmanship and outstanding performance, yet in arguably one of their most successful ad campaigns there was no picture of a car but a cricketer in the locker room, with a tag line that asks simply, 'When did you know you were a Mercedes driver?

The most common counter argument is that diamonds are in essence a commodity and specs. are what differentiate them. I beg to differ. Petrol is a commodity too. There is no real difference between the juice bought at a Texaco or a Shell station. That does not stop both these competing for your custom using any arguments they can discover or invent.

BP have been trying for the last few years to convince us that the two letters of their name stand for Beyond Petroleum. With slick visuals and clever advertising copy they emphasise all they are doing to achieve environmentally friendly energy and have succeeded in convincing many that the massive volume of fuel comfortable transport guzzles need not be all bad. That it can actually be financing the development of greener gasoline for the pumps of the future. Reason enough for many environmentally concious consumers to insist on the BP brand.

In fact, despite its brilliance, marketing analysts point out that the 200 million USD spent on this campaign was roughly equal to their total six-year investment in the development of alternative energy technologies and merely a drop in the ocean when compared to the billions they still invest in developing new fossil fuel sources.

One might well ask why indeed the major oil companies are investing so relatively little in what are likely to be the money spinners of the future. The simple answer is shareholders. Mammoth companies like Shell and BP have difficulty convincing holders of their stock that it is worth forgoing short term benefits in favour of larger profits much further down the line. A problem they share with the diamond industry who, lacking a central figure with a long term strategic vision, are also falling behind in developing the marketing tools that should be driving the industry forward in our globalised and increasingly savvy economy.

Where the diamond market does have the edge over the massive oil companies is in their size, or lack of it. Companies like Shell, with the manoeuvrability of an oil tanker, continue to profile themselves as greener and cleaner but still concentrate on selling tried and tested fossil petroleum despite knowing that it is in their best long-term interest to focus on the renewable resources of the future.

The diamond market on the other hand, with its tiny proprietor run companies, has all the handling a nifty Ferrari and if it wanted could turn on a sixpence. It should be a doddle for those with the right vision to reinvent the diamond's image and allow them to be sold, like all good consumer products, for their own real or imagined magical properties rather than an appendage jewellers stick on their branded jewellery. Or, to stick to our analogy; that they be marketed like a car not the contents of a fuel tank.

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