The market power (or control of the market), total sales and the marketing approaches of the diamond industry players show their strategies and how their performances lead them to further expand their market base. According to Even-Zohar (2011), the major diamond producers are adopting a business model in which a segment of the products are marketed through long-term contracts and by auctions. Minor diamond producers have solely shifted to auctions in selling their outputs. Once again, De Beers is pioneering the shift towards diamond auctions through its subsidiary, Diamdel.
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In this case, undifferentiated marketing approach will become more popular rather than the differentiated and concentrated approaches, since the diamonds sold at auctions have commoditized the products and lessened its perceived value of luxury. The following describes the market performances of the major players in the global diamond industry.
The company's profits amounted to $968 million, which is an impressive 62 percent increase from the previous year. Its company's retail joint venture with LVMH and De Beers Diamond Jewellers also showed strong growth in terms of gross sales across all regions. De Beers' largest regional sales come from China. These indicators reflect the industry leader's focus on maximizing the life and value of its diamond resources while remarkably reducing its operating costs. Its rough diamond sales boosted its growth coupled with the unprecedented consumer demand in the first two quarters of 2011. The second two quarters saw a decrease in the company's growth rate due to the debt servicing for its cutting and polishing centers. Aside from rough diamonds, the polished diamonds also fared well in terms of sales.
The strong consumer demand for diamond jewelry was fueled by the markets in China, India and the U.S. (Forbes Online, 2012) The company utilized category marketing and differentiated approach and it was able to channel majority of its rough diamond sales to the market. (World Diamond Council, 2007) De Beers' sight holders have also significantly invested in marketing and they joined the company's Supplier of Choice program. (World Diamond Council, 2007) This is a generic marketing program that elicited positive responses from its customers. De Beers hold a considerable market power for it still influences the diamond industry. However, their hold is not the same as before, when the company can control the supplies, the demand and even the market players in the global diamond industry.
Being a world leader in terms of diamond output, its diamond production is a significant aspect of the industry which, if it increases or decreases, will have a remarkable impact in the prices and supplies of diamonds around the world. By opening its diamonds to various manufacturers and retailers worldwide, the company reflects its undifferentiated marketing approach. It sells about 50 percent of its rough diamonds in foreign markets. (Yahoo Finance, 2012)
The company utilizes a concentrated marketing approach as it targets high end consumers. Specifically, for retail markets, Harry Winston maintains a lead position in its most exclusive and very prestigious diamond jeweler and luxury products like watches. Its brand is also known for its fine craftsmanship, quality gems, exquisite settings of gemstones, and top diamond expertise. The company is nestled in the high end street of New York and its 19 retail salons worldwide reflect its high end concentration. The company also has select outlets for its exclusive lines of quality timepieces. It has shops in key locations like Paris, New York, Beverly Hills, London, Beijing, and Tokyo. (Harry Winston Website, 2010)
This marketing approach earns the company its solid reputation. Its strategies put its company at the top of the luxury jewelry market, its intended niche. However, the company does not have a strong control of the market in terms of its diamond production and its retail operations. As it is, it maintains a market presence through its less than 10 percent share of the overall diamond market worldwide.
It has an undifferentiated marketing campaign, which is focused to the more high-end market as it showcases its diamonds as "the world's most extraordinary diamonds." (Leviev Website, 2012). It attracts its customers to a privileged access to some of the world's most extraordinary stones. It also boasts of its unique assortment of rare, big and colored diamonds. Its flagship boutiques are located in central upper class cities of London, New York, Moscow, Singapore, and Dubai. Having less than 10 percent of the total markets, the market control of Leviev is not very strong. It does not have a direct influence in the overall prices of diamonds. Yet, it is trying to leverage through its vertical integration strategy.
It has a differentiated approach to its various markets as it sells loose polished diamonds under its brand, Argyle Pink Diamonds Tender. It also sells its rough or uncut diamonds through its centralized sales and marketing office in London and Antwerp. It used to have a strong market power in terms of influencing the diamond jewellery players to establish improved systems in governance, environmental and social performance. It is also a founding member of the Responsible Jewelry Council (RJC), which provides industry wide certification process to strengthen the end users' confidence in the jewelry that they buy .
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The company has an undifferentiated approach to marketing to its various customers. It also has a small influence in the overall diamond industry. Among industry players, De Beers and ALROSA performed very well in the base year 2011. On the contrary, both BHP Billiton and Rio Tinto slowed its carat output due to some transition stages in its underground mining operations. However, they have pulled good diamond sales that exceeded its previous years' performances. This was due to the sharp increases in the prices of rough diamonds in 2011. (Buillion Street Website, 2012) However, Both BHP Billiton and Rio Tinto cannot match the global diamond production of De Beers and ALROSA and they are now trying to sell their diamond businesses.
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