De Beers, A Story About Controlling Supply and Creating Demand

My wife would say that the greatest way a man can ever show a woman he loves her is to buy her a diamond. This drives me crazy because the entire narrative that diamonds represent romance is pure marketing hype that almost everyone has bought into. Did you know that the tradition of giving a woman a diamond engagement ring only started in 1938?

Or that the rule that says an engagement ring’s value should represent two months’ salary came out of an ad campaign? Or that diamonds aren’t actually that rare, but by carefully restricting supply one company keeps prices high? Or that one company once held a monopoly on diamond exploration, mining, retail, and trading, and created the 71 billion dollar consumer diamond industry we know today?

Every bit of the diamond story perpetuated in ads and movies was orchestrated by a single company, and that company was De Beers. In fact, the entire diamond facade could crumble like the tulip mania of the 1600’s, since today you can manufacture diamonds in a lab. I’m not talking cubic zirconium, which by the standard of diamonds are soft stones. We are talking about synthetically created diamonds that are only just slightly less hard then the best naturally available diamonds.

In fact, the only way a jeweler can tell the difference between a diamond that was mined and one that was created in a lab is that naturally occurring diamonds have flaws, while manufactured ones are flawless.

With respect to marketing, Americans covet diamonds for one simple reason: the De Beers company decided that we should. De Beers’ marketing campaign made diamonds the measure of success in America, and we bought into this collective mindset hook, line, and sinker. Despite their nearly complete lack of inherent value, De Beers created the image of diamonds as status symbols. Moreover, to keep the price of diamonds high, despite the abundance of new diamond finds, De Beers executed the most effective monopoly of the 20th century.

So next time you hear “Diamonds are forever,” remember that phrase is a slogan created by a company to market its products.

How can you create a marketing message on par with De Beers for your product or service?