The story of diamonds is probably one of the greatest and most astounding narratives of how monopoly and propaganda can be used as marketing techniques to build a mega trillion empire.
Today you might think that no wedding is complete without an exchange of a diamond ring, but 200 years ago no one even knew what these shiny pebbles were. Truly rare and adorning the royalty, they remained an unknown delicacy, until 1870, when miners discovered huge deposits of diamonds in South Africa. So a restrained and secluded diamond market got flooded with the sparkling stones, and understandably got not only common, but relatively cheap.
A man named Cecil Rhodes saw all the proceeding transpire, and in his evil genius thought process he decided to cash in on the opportunity. So even though the market was declining, Rhodes started to buy up shares of the diamond mines by the loads. And in just 18 years, he was the undisputed king of all the South African diamond mines.
Operating from his diamond farm called the De Beers, his company used his monopoly over the mines to employ mercenary business practices. Storing the extracted diamonds in their huge lockers and warehouses, they only supplied the markets with very little amount of diamonds then what were actually being extracted. Thus, they created an impression that diamonds again somehow became “rare”, while artificially raising their prices and the demand among the people. Using these unethical measures, he turned his company into a cartel, and then into a global monopoly. Every possible competitor was obliterated, while De Beers sat on the world’s diamond interests like a dragon on a hoard.
The operations were stabilised and competitors nowhere in sight, but then the Depression hit the world economy. People were struggling to make ends meet, thus luxuries like diamonds and jewellery became a low priority for the world. This was confirmed by a 1939 survey that concluded that one-third of brides at that time married without an engagement ring. So to make their “product” again relevant and wanted, De Beers opened up another chapter in their company’s history, which now meant it would also become a global propaganda machine.
And what better way for spreading lies than finding an advertising agency and using the mainstream media. Thus an advertising agency called N. W. Ayer was asked to literally spread “propaganda in various forms” in order to counter the diminishing demand. Soon enough the agency established that people considered diamonds a luxury and an unneeded commodity so they changed their marketing strategy and started to target people’s hearts. This proved to be a brilliant technique, as they created what would be arguably the most successful advertising cum propaganda campaign in American history.
To create an aura of being fashionable and “hip”, De Beers began giving large diamonds to celebrities and socialites. They even started their own newspapers and press in order to talk about their product and describe it in glowing details.
And in 1948, the campaign really hit off with four little words: “A Diamond Is Forever.” This was killing two birds with one stone scenario, as the phrase made diamonds a symbol of eternal love, while making them also sound like a good investment (which they’re really, really not).
As a result of this propaganda stint, sales of diamond engagement rings again began to go through the roof. The Ayer ad agency reported in 1951 that “Jewelers now tell us ‘a girl is not engaged unless she has a diamond engagement ring.’” And by 1968 the downward trend was practically reversed, as 80 percent of American brides were reported to be wearing diamonds on their weddings.
The greed and lust for money is indeed insatiable, and so to further loot the masses the propaganda campaign continued with full vigour. Slogans like, “Isn’t two months’ salary a small price to pay for something that lasts forever?” and “A divorce costs more” continued to captivate and manipulate the people into emptying their pockets.
So today’s concept of spending at least 2 month’s salary on an engagement ring rises purely as a form of an advertising technique. The famous “Four Cs” (cut, clarity, color, and carat) that you would hear about from a ring seller was yet another marketing ploy in order to sell smaller diamonds. In this ad, De Beers completely forget to mention carat of the diamonds; how convenient.
According to Atlantic, diamonds were usually on a 100 to 200 percent retail markup. And despite all the ebbs and flows of the economy, diamonds’ prices continued to stay inflated due to De Beers’ remarkable stronghold. De Beers voluntarily gave up their monopoly on the diamond industry in 2000 in a bid to avoid a chunk load of legal cases. But the price of diamonds continues to remain inflated courtesy the stockpiling of the gemstone. And besides the propaganda and the human rights offences related to conflict diamonds, maybe it is time for the world to reconsider their priorities and expose this forcefully imposed stone once and for all.
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