Coca Cola rebranding Santa Claus to red and white has to be up there. Nike with “Just Do It” perhaps? More parochially, I’ve had Hastings Direct’s telephone number in my head since childhood: “0800 Double 0 1066”
Nah. There’s one that’s so good, it created a social norm (and a Bond film).
“A diamond is forever”
Source: Diamonds Are Forever
Launched by De Beers in 1948 to try and boost flagging sales of diamonds after the war, they made up the whole tradition of engagement rings.
Just. Made. It. Up!
And the psychology of it was super smart:
Source: De Beers
It even told someone how much to spend!
In 1940, 10% of engagement rings had a diamond. By 1980, 80% of rings were bling. And De Beers’ sales in the US went from $23 million to $2.1 billion. Today, the global diamond ring market size is over $80 billion.
Now that’s a good campaign!
But. Technology is changing the game.
Because in 1948, you bought a natural diamond (usually from De Beers), or you bought nothing.
But in the last two decades, clever people have worked out how to create artifical diamonds, some of them purer than anything found in the ground.
And the lab diamonds are now selling for about a tenth of the price of a natural one:
And, no matter how good your branding, price eventually starts to tell. Lab diamonds now account for nearly half of all diamond engagement rings**. Ten years ago, that number was basically zero.
De Beers are now being priced out of the market they created! Billions of people will keep buying engagement rings. But they won’t be De Beers diamonds.
Doesn’t matter where you look in the world, from diamonds to football clubs to semiconductors.
Someone is always coming for the king.
As always, if you have any questions about this piece or any other finance-related matter, please do not hesitate to contact me.
Yours sincerely,
Graham Ponting CFP Chartered MCSI
Managing Partner
