Diamonds are a marketing campaign

This article is fascinating for showing how much larger than the stones themselves the diamond product is. The stones aren't the product at all. The product is public opinion about diamonds. The suppliers create public opinion through product placement and advertising, and control price both by controlling supply, and by marketing diamonds in such a way as to discourage resale, which has the potential of upsetting the price in a big way.

That is the diamond product. The stones themselves are inconsequential.

The article is from 1982. It doesn't seem like a whole lot has changed since then; but it would be fascinating to read of later developments in the story.


The Horse said…
Its interesting isn't it that we can be so easily fooled into believing something that isn't exactly true. I had read something similar many years ago, I even know someone who worked undercover in SA buying illegal diamonds. She said then its all about supply and to a large extent she is correct.

Will be interesting to see what happens now that Congo's diamonds can now legally traded. Be interesting to see if they can effect price.

Great post :)
The Horse said…
Thought this might add some interest to the topic.
denis bider said…
That $15m diamond looks like a collector's item. It seems that gems like that are genuinely rare, and therefore have intrinsic value, as long as there are people competing to own such rare gems.

Regular diamonds for the masses, however - those costing in the thousands rather than millions - seem to me more like Prada purses. You pay for an item associated with luxury. An advertising campaign that helps maintain this association in other people's minds is then as much a part of the product, as is the purse or the diamond itself.

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