Analyzing De Beers' Marketing Strategy: Challenges and Solutions

This case study provides an analysis of De Beers' marketing management, focusing on the challenges the company faces, particularly in relation to marketing to millennials. It identifies key issues using a SWOT analysis, highlighting strengths like strong brand value and innovative marketing, weaknesses such as limited market presence in organic diamonds, and threats including declining diamond demand and counterfeit products. The study also explores challenges in millennial marketing, including weak branding, changing consumer preferences, ethical dilemmas, and generational gaps. Recommendations for De Beers' marketing strategy are justified using Porter’s Five Forces, addressing supplier power, buyer power, new entrants, substitute products, and competitive rivalry. The analysis emphasizes the need for De Beers to adapt to evolving consumer tastes, address ethical concerns, and leverage strategic frameworks to maintain a competitive edge. Desklib provides students with access to this case study and many more solved assignments.

Running head: MARKETING MANAGEMENT
Marketing Management
Name of the Student
Name of the University
Author note

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Table of Contents
Answer to Question: 1.......................................................................................................2
Answer to Question 2........................................................................................................4
Answer to Question 3........................................................................................................6

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Answer to Question: 1
In the given case study, there are various issues being identified for De Beers,
however, in identifying the issues with them, SWOT analysis will be used. This will help
in identifying the weakness and the future threats to be faced by them.
Strengths
 One of the key strengths being identified from the case study is the strong and
positive brand value and identification of De Beers in the market (Kirk, Ray and
Wilson 2013). This is due to the reason that, they had started their business in
last century and gained enough market penetration.
 Strength of them is the innovative marketing approach of them. In the given case,
it is being stated that, the marketing approach of them such as “Real is Rare”
created stir in the market and contributed in the changing the entire social
perceptions towards the consumption of diamonds.
Weaknesses
 One of the key weaknesses being identified for De Beers is not having their
market presence in the alternatives of organic diamonds. In the case, it is stated
that, De Beers is having separate division for synthetic diamonds for industrial
purposes. Thus, they are not being able to tap the growing opportunity in this
market.
 Another weakness for them is their limited target segment. This is due to the
reason that, millennial is only being targeted by them for selling their products.
Though, millennial is one of the most potential market segment, but targeting
only a specific segment is limiting their growth opportunities (Vigneron and
Johnson 2017).
Opportunities

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 One of the key opportunities being identified is the growing demand of diamonds
in the developing countries outside United States. Thus, having their market
presence outside the United States will help them to cover more market.
 Initiation of the product diversification will also help De Beers to tap the growing
opportunities in alternative sectors of diamond (Sahaym and Nam 2013).
Entering in the market of synthetic diamond will further help them to target the
growing market in the developing countries.
Threats
 One of the key threats being identified is the reduction in the demand for
diamonds in the global scenario due to the economic crisis. According to the
reports, exports of diamonds to the key markets are gradually reducing. It is
having negative impact on the revenue of De Beers (Insights 2018).
Figure: 1
Export trend of diamond
Source: (Insights 2018)
One of the key usages for diamonds is for the engagements. However, according
to the recent report, average marriage rate is also decreasing in the major
economies (Insights 2018).
 Thus, with the reduction in the average rate of the marriages, the demand for
diamond is also reducing.

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Figure: 2
Marriage rates of three major economies
Source: (Insights 2018)
 Another threat being identified is the emergence of the counterfeit products in the
market, especially in the developing countries. With the advancement of the
technologies, it becomes difficult to distinguish between the original and
counterfeited diamonds. Thus, emergence of these products will have negative
impact on the sales chart of De Beers in the future.
Answer to Question 2
There are different kinds of scope of challenges that can be faced by De Beers in
relation to the marketing of millennials. The different challenges as discussed in the
case study are as follows:
Weak branding of lifestyle is one such challenge that is faced by De Beers and
the huge problem for the marketers is seeking in order to penetrate the entire
market of Millennial. The quality of the materials is critical in nature for the
business and this helps them in sustaining the business in the entire competitive
market (Debeersgroup.com, 2018)
Tastes and preferences of the buyers is the second potential challenge that is
faced by the De Beers marketers wherein the young generations has different

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tastes relating to the jewelry and other choices. The respective company needs
to use different techniques wherein surveys can be conducted to understand the
views of the individuals in the present generation (E. Dobbs 2014)
The ethical dilemma is the third potential issues faced by De Beers, as there
are different countries wherein there is mining of the diamonds and it is unethical
in nature as well. These kinds of services are unethical in nature and this can
cause issues for the respective company as well. the unethical usage of the
proceeds from the sale of demand will be lessened in nature
The generation gap is the other issues faced by De Beers Company as the
present generation has different kind of tastes and preferences in comparison to
the previous or old generation. The dull and outdated kind of strategies has to be
updated by the respective company in such a manner that this will help them in
attracting the millennials. The preferences of the millennials have to be analyzed
in such a manner by the respective company, as this will help them in gaining
competitive advantage.
Figure 3: Market Share of De Beers
(Source: Sutherland 2014)

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From the above, it can be analyzed that there are different potential dilemmas
faced by the respective company named De Beers. The ethical dilemma has to be
analyzed and sorted out in such a manner that this will help them in maintaining proper
effectiveness in gaining competitive advantage. The respective company needs to
analyze the preferences of the young generation in such a manner that this will help the
company in understanding their tastes (Zhao et al. 2016). The marketers has to be
much more focused in nature in the current marketing scenario as this will help them in
marketing their products and services in an effectual manner.
Answer to Question 3
There are different issues that have been faced by the De Beers relating to the
potential dilemmas in the entire competitive market. The different issues include weak
branding of the lifestyle, generation gap along with differences in the different tastes and
preferences of the young and previous generation individuals. These kind of issues has
huge affect and implications on the marketing of the respective company.
There are different kinds of marketing strategies that has to be used by De Beers
in such a manner that this will help them in promoting other products such as synthetic
diamonds to the present young generation in the competitive market. Porter’s Five
Forces strategy is used by De Beers. The steps are followed in the manner:
The bargaining power of the suppliers is one of the forces wherein previously De
Beers solved problems related to oversupply chains and currently they are
focusing on repositioning themselves in such a manner that this will help them in
understanding choice of customers in market
The bargaining power of the buyers has to be taken care, as each individual is
essential for the business. The De Beers Company reduced the operations of
mining and this turned the industry back to the demand lower supply market
The threat of new entrants is another issues wherein this will understand the new
entrants and they has protected their different technologies to preserve favorable
position in the market (Sutherland 2014)

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The threat of substitute products is the other factor wherein De Beers has six
kind of elements wherein this helped the company in understanding the
preferences of the customers and this will help in making the strategy useful in
nature (Ortega, Jalón, and Menéndez 2014)
Lastly, the competitive rivalry within the industry is the other factor wherein there
are other rivalries that can be competitive in nature for De Beers. The respective
company requires to analyze the strategies in such a manner that this will help
them in understanding their weaknesses and work on it for making it correct in
nature (Rothaermel 2015)
Figure 4: Porter’s Five Forces Model
(Source: Zhao et al. 2016)
De Beers Company has utilized the Porter’s Five Forces Model as wherein the
company has been able to understand the different weaknesses in comparison to the
other companies. The respective company needs to understand the issues relating to

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the ethical dilemma that has been faced by them in different regions. The company has
to be more focused towards the welfare of the workers who are working in the industry.
The company needs to focus on the new strategies that can be applied by them in order
to understand the preferences of the customers.
The respective company De Beers has to understand the issues that are faced
by them in relation to providing satisfaction to the customers in the market. This is
essential in nature for the company to understand the tastes of the customers and with
the help of surveys understand the tastes so that they can provide the products in an
effectual manner in comparison to the other substitutes in the competitive market. De
Beers has to understand the weak performances of the respective company in
delivering the requirements of the customers in an effective manner. With the help and
implementation of the Porter’s Five Forces Model, it can help the company in meeting
the tastes and preferences of the customers and solve their queries in relation to the
other customers from the previous generation in the competitive market.

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Reference
Debeersgroup.com. (2018). De Beers Group. [online] Available at:
http://www.debeersgroup.com/en/index.html [Accessed 3 Feb. 2018].
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review, 24(1), pp.32-45.
Insights. (2018). Diamond Market Outlook - Fragile improvement - Insights. [online]
Available at: https://insights.abnamro.nl/en/2016/06/diamond-market-outlook-fragile-
improvement/ [Accessed 3 Feb. 2018].
Kirk, C.P., Ray, I. and Wilson, B., 2013. The impact of brand value on firm valuation:
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500.
Ortega, A.G., Jalón, M.L.D. and Menéndez, J.Á.R., 2014. A strategic analysis of
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Europeas de Dirección y Economía de la Empresa, 20(1), pp.5-15.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Sahaym, A. and Nam, D., 2013. International diversification of the emerging-market
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436.
Sutherland, E., 2014. Lobbying and litigation in telecommunications markets–reapplying
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Vigneron, F. and Johnson, L.W., 2017. Measuring perceptions of brand luxury.
In Advances in Luxury Brand Management (pp. 199-234). Palgrave Macmillan, Cham.
Zhao, Z.Y., Zuo, J., Wu, P.H., Yan, H. and Zillante, G., 2016. Competitiveness
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