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Have You Ever Tried to Sell a Diamond? (1982)

theatlantic.com

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Re: Have You Ever Tried to Sell a Diamond? (1982)

#31

Post by captaintacos »

jonnathanson wrote: post #18

It's a fascinating piece, for a number of reasons. The first, and perhaps most interesting, is that the story behind the De Beers cartel is well known . Perhaps not in this depth, but still, it's no secret. Pretty much everyone knows they exercise a monopoly on diamond production and distribution, artificially keeping prices high. And yet, nobody takes the red pill and opts out of the illusion. Call it the power of t…

Sadly, it is almost unheard of here in Japan and I am 99.999% sure it is the same in most of Asia (the real market for diamonds and luxury brands nowadays).

Just a couple weeks ago I was at lunch with my Japanese coworkers and the conversation topic went to one of them thinking on whether to buy a diamond ring to his wife as an anniversary gift.

I told him to better stay away from diamonds, and mentioned the diamond situation (pretty much the contents of the article) and not only not any of them had ever heard about it (despite most of them having graduated from top public and private Japanese universities), but also I ended up getting from all of them the most incredulous and distrustful looks I had ever been given in all my years in Japan.

A fundamentalist vegan urging them to immediately abandon sushi and seek redemption in the purity of soy beans would had been more warmly welcomed to discussion than my comment.

Re: Have You Ever Tried to Sell a Diamond? (1982)

#32

Post by brc »

HorizonXP wrote: post #26

Wow, absolutely brilliant. I can't believe this article popped up on HN's front page tonight. I just got back from looking at engagement rings with my girlfriend. I've known about this monopoly for a while, and so has she. Heck, one of the first movies we watched together when we first started dating 7 years ago was Blood Diamond. Here's the conversation we had while in the jewellery store tonight. Me: "Sweety, I rea…

>Honestly, as a community of people in the startup ecosystem, we could stand to learn a thing or two here.

Yup. Bang on.

Apple does a line in 'oh, but you didn't get an Apple' better than anyone else (they aren't a startup but once were)

>I swear, De Beers has probably pulled off the greatest marketing stunt in the history of humanity

The Australian Meat & Livestock board came up with a marketing idea. On Australia Day, which falls in the middle of Summer, it's very popular to have a family barbecue.

About 8 or 9 years ago, they came up with the idea that it was an Australian tradition to put lamb chops on the barbecue for Australia day. Now, I've been around for a few Australia days myself, and I can tell you it's never been a tradition at all.

But they got a popular former football player to start running ads (in a humorous manner) to say it was 'unAustralian' not to have Lamb Chops on the Barbecue for Australia day. The actual tagline is 'Don't be unAustralian, serve Lamb on Australia day'.

It has been a big success, and now they release pop singles on YouTube and generally create a 'big suspense' to see what they will do this year.

Overall, it's been a massive success, and in just a short time, if you arrive at an Australia day barbecue, it would be surprising to not find Lamp Chops sizzling away. In another decade, it will just be one of those societal norms that will require very little advertising to keep it going.

http://www.mla.com.au/Marketing-red-meat/Domestic-marketing/...

So, these types of stunts find success when the right pieces fall together. Definitely a lot to learn for the budding startup.

Re: Have You Ever Tried to Sell a Diamond? (1982)

#33

Post by jonnathanson »

brc wrote: post #27
jonnathanson wrote: post #24

Earlier quoted context omitted.

"But as to why the introduction of new sources hasn't drastically affected prices, I think that any new cartel or operator entering the market is just as likely to free-ride the hard work of De Beers. If De Beers spends significant money and influence maintaining a monopoly, and therefore creating monopoly pricing, any new entrant rationally would be well served to restrict supply so that they can free-ride on the mo…

Well, we don't know what the cost-structure of the other market entrants are. Perhaps they have a much higher cost structure than De Beers, and thus there is no point in starting a price war as it not only destroys the long-term market for the gems, but the newer entrants might get wiped out. I think Game Theory is the right way to look at this - who really gains from a drop in prices? Sure, the new consumer wins - b…

Another possibility is that I'm reversing cause and effect here. Perhaps demand started soaring first, which inspired the entrance of the new player, who quickly shored up the gap in demand -- thereby restoring supply/demand equilibrium to the market, and keeping prices stable. Not out of the realm of possibility.

In such a scenario, De Beers wouldn't necessarily or aggressively chase the second player into the new market. It's doing just fine in its existing markets, and it doesn't want to risk setting off a price war over the new market.

Re: Have You Ever Tried to Sell a Diamond? (1982)

#34

Post by elwin »

HorizonXP wrote: post #26

Wow, absolutely brilliant. I can't believe this article popped up on HN's front page tonight. I just got back from looking at engagement rings with my girlfriend. I've known about this monopoly for a while, and so has she. Heck, one of the first movies we watched together when we first started dating 7 years ago was Blood Diamond. Here's the conversation we had while in the jewellery store tonight. Me: "Sweety, I rea…

> I swear, De Beers has probably pulled off the greatest marketing stunt in the history of humanity.

De Beers has the advantage of selling a luxury good. The point of buying a diamond is to demonstrate one's financial ability. People don't really want cheap diamonds.

I doubt their marketing campaign is a good pattern for normal products.

Re: Have You Ever Tried to Sell a Diamond? (1982)

#35

Post by [deleted] »

dllthomas wrote: post #17
TheAmazingIdiot wrote: post #11

By fallenapple ( from showdead): Ha, they quickly stuck a date in the title. ;) I was going to comment this is a "pre-internet" story. The film Blood Diamond came to mind as I was reading this, and the "Diamond District" in New York City. Lots going on behind the scenes in the "diamond industry". This is a superb lesson in 1. artificial scarcity and 2. how consumers can be conditioned to accept new symbols (a diamond…

> [...] but what does a diamond "mean"? "I would hurt poor people for you."

[deleted]

Re: Have You Ever Tried to Sell a Diamond? (1982)

#36

Post by MikeCapone »

brc wrote: post #32
HorizonXP wrote: post #26

Wow, absolutely brilliant. I can't believe this article popped up on HN's front page tonight. I just got back from looking at engagement rings with my girlfriend. I've known about this monopoly for a while, and so has she. Heck, one of the first movies we watched together when we first started dating 7 years ago was Blood Diamond. Here's the conversation we had while in the jewellery store tonight. Me: "Sweety, I rea…

>Honestly, as a community of people in the startup ecosystem, we could stand to learn a thing or two here. Yup. Bang on. Apple does a line in 'oh, but you didn't get an Apple' better than anyone else (they aren't a startup but once were) >I swear, De Beers has probably pulled off the greatest marketing stunt in the history of humanity The Australian Meat & Livestock board came up with a marketing idea. On Australia D…

Unless I'm misremembering, I think there are lots of recently made up holidays that are basically just marketing ploys (Mother's Day and Father's Day).

Re: Have You Ever Tried to Sell a Diamond? (1982)

#38

Post by JoeAltmaier »

MikeCapone wrote: post #36
brc wrote: post #32

Earlier quoted context omitted.

>Honestly, as a community of people in the startup ecosystem, we could stand to learn a thing or two here. Yup. Bang on. Apple does a line in 'oh, but you didn't get an Apple' better than anyone else (they aren't a startup but once were) >I swear, De Beers has probably pulled off the greatest marketing stunt in the history of humanity The Australian Meat & Livestock board came up with a marketing idea. On Australia D…

Unless I'm misremembering, I think there are lots of recently made up holidays that are basically just marketing ploys (Mother's Day and Father's Day).

Mothers' Day: 1870

Fathers' Day: 1972

Re: Have You Ever Tried to Sell a Diamond? (1982)

#39

Post by JoeAltmaier »

elwin wrote: post #34
HorizonXP wrote: post #26

Wow, absolutely brilliant. I can't believe this article popped up on HN's front page tonight. I just got back from looking at engagement rings with my girlfriend. I've known about this monopoly for a while, and so has she. Heck, one of the first movies we watched together when we first started dating 7 years ago was Blood Diamond. Here's the conversation we had while in the jewellery store tonight. Me: "Sweety, I rea…

> I swear, De Beers has probably pulled off the greatest marketing stunt in the history of humanity. De Beers has the advantage of selling a luxury good. The point of buying a diamond is to demonstrate one's financial ability. People don't really want cheap diamonds. I doubt their marketing campaign is a good pattern for normal products.

How about the iPhone? Many 'imitations' yet people who don't really know any better by the Apple product. "I don't want a fake" is very likely the reason.
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