De Beers, the world's largest diamond mining company engaged in selling roughs, is finally here to push that sparkling gift of the gods, albeit indirectly, into the retail market. Though most Indians have largely preferred gold over other precious metals or stones, the company plans to take advantage of this aspect and promote diamonds through the media advertising and propaganda.While Argyle, its arc rival, has made its presence in India, De Beers, so long was waiting for the right time to strike the rod. Recently, De Beers sponsored the 1998 Indian Jewellery Design Competition, held jointly with Gem & Jewellery Export Promotion Council.
De Beers' marketing director-India, Nicholas Graham Smith, was here to oversee this first important step in India marketing. He spoke at length to The Financial Express on the industry and the company's plans in India.
Excerpts:
On the diamond markets this year
The market was tough during the early part of the year for roughs but it hasbeen strengthening and people are more optimistic in India, there is more consumerism and current economic conditions -- may be in India, Europe or other countries -- all add to the overall confidence. Indian market is expected to be good.
On De Beers diamond marketing plans in India
India's jewellery market offers tremendous opportunities. To capture them, we have a 3-fold marketing strategy. One, create more awareness for diamonds -- both among the retail buyers and sellers through media campaigns; two, give retail sellers point of sale material; and three, tap the vast potential of the wedding market. There are two clear distinct segments in the wedding market -- the inlaws, that give jewellery to the bride and the bridegroom, and the married couple giving diamond products to each other.
The print campaign will try to remove the misconception that diamond is unaffordable in India, saying that jewellery could be bought for around Rs 5,000-10,000 and is not as costly as is being perceived.
Inaddition to advertising campaigns, we will also help trade improve its diamond marketing skills. This will be done through lot of educational programmes for trade members which we normally give internationally for the basic knowledge of diamonds (the product knowledge) and selling skills. All these aspects are aimed at helping the retailers improve their overall trading and marketing skills.
Print advertising will partly help to bridge the gap of relative ignorance and help improve the knowledge of quality of diamonds for both the consumers and the traders.
On the types that will be pushed in India
In reality, we are into selling roughs diamonds. What we will do is try to create more demand for the diamond jewellery here, which in turn will create demand for rough diamonds which we will push in the pipeline.
On the shift from marketing roughs to cut & polished diamonds
It is not a shift. Our main activity of selling roughs still remains unchanged. We still get paid through our Indiancustomers of rough diamonds.
India is the sixth largest consumer of diamond jewellery, we have been here for the last four years but did not have any diamond marketing strategy. Over the last couple of years there has been a lot of advertising for standard luxury goods and things have changed across the country. What we intend to do is to create more awareness for diamonds as another set of luxury goods through our campaigns. In the process we will take advantage of the emerging preference for luxury goods across the country.
What we intend to is to sell this demand with the existing vast gold market. For this purpose, we will be working jointly with the Gem & Jewellery Export Promotion Council.
As we are the world's largest diamond supplier, we will benefit with the overall growth in the domestic diamond jewellery market
On other markets that De Beers intends to tap
We intend to tap Pakistan, Middle East countries in the Gulf region and Turkey. But the marketing programme will consider theoverall cultural differences of these markets. Of the large pool of marketing funds -- $200 million for calender 1998 -- we have more money and investment plan for India and the Gulf countries.
On advertising budget that will be spent for Indian market
It would be around Rs 14 crore annually and Hindustan Thompson Associates (HTA) has been our agency for the purpose. The campaigns will consists of shadows that will be released on televisions across the country On last year's cut in diamond supplies and the prospects of any cuts in 1998-99There was some over capacity toward the end of last year, but it was not a supply cut in the strict sense, for it is the relationship we have with the site holders here and is linked with what they wish to buy. As regards the sales strategy this year, I am not the right person to speak on the subject. But we have a practice to create buffer stock, sometimes hold back some of the sales. Our strategy is to ensure supplies of diamond stocks what the market can bearand what is feasible to sell. In short, we need to take steps which are sensible and pragmatic from company perspective analysis.
On whether De Beers will help traders here get credit for buying diamonds
Our expertise is in marketing not financing trade; we are not into extending or offering credit facilities to the trade anywhere.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
