November 15th, 2005
By Charles Wyndham.
I was always told that selling without marketing was akin to kissing in the dark.
We have all had the benefit of some light been thrown on to the marketing success of De Beers Supplier of Choice.
It was Gary Ralfe who pointed out the month before last that the growth in demand had been disappointing.
Gareth Penny comments that the DTC has been deliberately selling their rough cheap is hardly a ringing endorsement either.
Anyway, despite all the recent hullabaloo about Nakshatra, there appears to be more than just a dark shadow across this and other DTC programmes.
I have always argued about the insanity of sightholders investing huge sums and time in specific brands where they are excluded from any beneficial ownership in that brand. This let alone in the context of so many different brands being launched at the same time, therefore ensuring less chance of success for any individual brand.
It is bad enough that sightholders are effectively being forced to ‘hand over’ their business to the DTC, as the DTC dictates how marketing should be done according to their dictat, if clients wish to receive rough.
To couple this to DTC retaining all ownership, was until the latest developments, as glaring an abuse of a monopoly position, in my opinion, as any that has caused them many of their current legal problems.
Sightholders will not have had the opportunity to read the DTC’s internal magazine, In The Loupe, to read about the exciting new brand initiative launched by the DTC’s "Brand Communications Team".
Even better news in the same publication is all about the VAS (Value Added Services) training workshops, where the DTC’s own staff were told that the services have been "developed to strengthen sightholders’ businesses and increase competitiveness and profitability. They also go beyond anything other mines mining houses or producers currently offer".
Quite, the point is that there is no choice as to whether the customer is charged, and whatever DTC/De Beers says they just cannot get away from telling everyone else how to run their business.
Talking about "Growth Services" that "builds on the DTC’s knowledge, skills and materials produced", has as unpleasant a whiff of possible justification for future VAS price increases as I think one can get.
Anyway, the news that it was the creation of the Business Change unit to develop the VAS (Value Added Services) is helpful. The key to success for the future of VAS we are told, is the development of a culture to understand customers’ needs and to enable future development of DTC services.
Given the customers have to spew out every conceivable detail about their business to what is effectively one of their competitors, would not make this a particularly difficult task. Well one would hope so.
So we are back full circle, DTC thinking of new ways to charge clients for doing what DTC tells them to do, despite no conclusive evidence that DTC actually knows better than the client themselves.
VAS is a fiction, an expensive one at that. It is hardly surprising that other producers have not followed as they do not have the same hold over their clients. Still the more DTC is seen to be able to charge for ‘spurious’ services it could prove to be too appealing for the other producers not to think of mimicking.
If these services are so wonderful and guarantee such profits why not just offer them with a price against what the client wants to take? This would seem rather more normal business practice.
The evidence about the glowing success of some of these marketing programmes may be being soundly illustrated by the Sangini programme, another DTC flagship.
No one disputes that this and other programmes have increased the awareness of diamonds in the thriving market of India.
The question mark has been over just how beneficial they have been to the actual participants who pay for it.
Well, Sangini, which I am told originally had 18 participants, has apparently been put up for sale to sightholders.
The price being talked about on the market is a whopping $200,000. Not a bad return on an investment that must have headed towards $10 million.
Sometimes, as most have found out for themselves on the odd occasion, it might be better to do the kissing in the dark, after all.
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