Friday, 4 July 2008

The Mark of Cain

The launch of the De Beers Forevermark as a consumer trademark, slipped by remarkably unremarked within the industry. Notwithstanding the devastating effects the most fundamental change to the De Beers marketing strategy in the past half century could signal to the selling power of those not within the syndicate’s orbit.

Already, a glance at the De Beers literature shows a new and highly exclusive language developing. On the Forevermark website I see that Pluczenik are offering for sale a matching pair of 26 carat brilliant cut stones. They are described as the “largest matching pair of brilliant cut Forevermark diamonds in the world”, insinuating that diamonds branded in this way are in some fundamental way different from all others. What should be more worrying, to those not plugged in to the DTC marketing machine, is the implication that all non-Forevermarked diamonds are somehow inferior for being unbranded.

The use of exclusive branding techniques to sell diamonds is not only desirable in the current market but inevitable. As the supply market fractures into more and smaller pieces, each supplier is going to feel forced to find ways of differentiating his product.

The Forevermark as we now see it, is indeed a top rate branding, completely unlike the artificially nurtured non-brands that so spectacularly misfired following the introduction of the DTC’s SOC program four years ago. Even within the marketing community, where much criticism was levelled at the mark following its B2B launch, a grudging respect is beginning to emerge as details of the new consumer brand emerge.

The surprise announcement last year that even non-sightholders, and stones supplied by other producers, would be eligible for branding, despite the understanding from the beginning that Forevermark would distinguish sightholders from the riff-raff, is clear confirmation that much more lies behind this innocuous mark than at first meets the eye.

Indeed this mark, supported and promoted by the sightholders for years now, might not, in the end, serve to encourage and promote new demand for the sightholders benefit, as they fondly cared to believe up till now. Nor is it really needed to boost consumer confidence. I have seen no significant research indicating that diamond consumers are massively bothered by the moral implications of buying diamonds, before the issue is forced onto them by those manipulating the media for their own nefarious ends. However, Forevermark, if it is a success, will consolidate De Beers' own market share downstream. and it could well help shore up its dominance of the marketplace even as its market-supply share wanes.

True, De Beers first responsibility is towards its own shareholders. One can hardly fault a company for taking advantage of its residual name recognition and influence to solidify a hold on the consumer market. Even when that far outweighs its actual current clout.

Moreover, one must admit that the Forevermark campaign shows flashes of sheer genius, albeit that we are still early days yet and it remains to be seen how the market will react to a marking system that effectively demotes to plonk status all diamonds previously obtained.

The regrettable passivity of the organisations whose job it is to represent the rest of the industry becomes more understandable when you realise that the executive leadership, clearly convinced of the need for an answer to the Forevermark, have the disadvantage of being forced to persuade their traditionally sceptical voting membership to devote the necessary effort and resources to a long term plan. This at a time when the future is uncertain and money is tight. However, doing nothing is the luxury of sinecures.

If the market is to remain independent and fair, it must be led by a body unaffiliated to any government or commercial entity. It is clear that as long as membership to the Forevermark club remains elusive to some, and to be effective it must, it is in the interests of the wider market to have some form of alternative mark or else risk having all stones not entered into the program perceived as second rate, or worse, as suspect.

Marketplaces being what they are, I have no doubt that alternatives will emerge. Human ingenuity being what it is I have confidence that the marketing community will find a ways to counter the threat of a new emerging monopoly. But that process will only start following realisation of what is actually happening. The chorus of silence that greeted the new Forevermark release does not auger well in that respect. Just mark my words.

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