ANALYSE CONSUMER BEHAVIOUR / PROFILE THE MARKET Diamond Engagement Ring Nominated product: Diamond Engagement Ring (high

involvement product with high level of ego, social and economic risk). Diamonds originally catered to an elite niche market consisting exclusively of royalty and the super rich. Annual diamond distribution is now based on projected engagements in the United States and Japan (according to Rio Tinto total global diamond retail sales for 2003 as a percentage of total retail sales occurred thusly USA 48%, Japan 16%, Europe 12%, Middle East 8%, Asia Pacific 5% and rest of the world 11%) . To create, grow and maintain the value and demand of this intrinsically worthless stone the diamond industry has cautiously and artificially controlled the supply, image, relative importance and price of diamonds, whilst simultaneously minimising the market for second hand diamonds and repelling the uptake of identical quality lab-produced compressed-carbon manufactured diamonds, through careful and uniform manipulation of consumer attitudes to diamonds. The ritual of a diamond engagement ring is an American construct; there was no established European tradition of a diamond engagement ring. Following World War I, European diamond prices collapsed. By 1938 three quarters of all diamonds were sold in the United States, making it the largest consumer market; but between 1919 and 1938 the volume of diamonds sold in the US had declined by 50% and the quality and price had declined by almost 100%. During the 1930s in the US the common law tort known as Breach of Promise to Marry (where, consistent with hitherto contemporary sexual inferences, a no longer engaged female could sue her former fianc on the break-up of an engagement; for damage to her reputation), was gradually abolished. There was impetus to provide females with a pre-wedding tangible surety and the diamond industry (monopolised at the time by De Beers) moved in. The positioning of diamond engagement rings, embedding their role en masse in US courtship rituals by attitude formation, was orchestrated by US advertising agency N. W. Ayer for diamond miner and distributor De Beers. PART A Individual (internal influence): Attitudes The nature of attitudes is possibly the single most critical factor in the enduring success of the diamond engagement ring and its transplant into the pre-wedding ritual (and gradual usurping of traditional, cultural pre-wedding engagement rituals). Repetition and association. Diamonds = Romance + Love Exploiting the new medium of motion pictures, young men were inculcated with the concept of diamond rings as the gift of love (larger & finer=greater expression of love), and young females attitudes were subtly shifted to view a diamond ring as an integral unassailable component of the courtship ritual, an indestructible diamond the ubiquitous link to indestructible love. The requisite element of betrothal. To reinforce the messages inherent in their screen portrayals, movie starts, as well as stage actors, the wives and daughters of politicians and recently engaged socialites were photographed wearing diamonds they had been provided with (by De Beers) as sparkling tangible symbols of love in weekly newspaper profiles titled Hollywood Personalities printed in 125 leading newspapers and

magazines , depicting detailed descriptions of their individual diamond rings as their new symbols of romantic involvement to a mass audience, as news coverage. Everyone who mattered was wearing a diamond engagement ring. Between 1938 and 1941 diamonds sales in the US increased by 55%. Operant conditioning. To secure the value (retail price) and position of a diamond engagement ring as an enduring and everlasting symbol, De Beers needed to set sustainable parameters. Consumers had to be conditioned to realising that their sought after diamond experience could only be achieved with a brand new diamond engagement ring (an individual, unique expression of the love in that particular relationship), and, it had to be expensive. In 1947 an N. W. Ayer copywriter devised the line A Diamond is Forever (in 1948 this became the official motto of De Beers) to infer that a diamond engagement ring should not be sold second-hand. De Beers also advised retail selling points that confused young men (90% of engagement ring purchasers at the time) coming in to select engagement rings should be advised that an affordable price range for an individual was widely accepted to be between 2 to 3 months salary (a totally arbitrary figure formulated for simple recitation and comprehension in store, by De Beers). To achieve the rapturous diamond experience so voraciously flaunted in all popular media forms the male had a benchmark price he believed was expected of him to unquestionably pay to rightfully achieve his goal, and the female understood that only a diamond would suffice. And on receipt, there was no way she could ever part with it. The right steps had to be followed, but the guaranteed result was indestructible love and happiness. He knows what to do to be the hero; and whatever other jewellery she may have in the future, that ring must stay firmly planted on her finger. Modelling. By the 1950s pockets of discontent were emerging at both ends of the market. Lower income brides-to-be wanted more for their money than the diamond engagement ring they were getting, and the more affluent began to demand expressions of difference as a means of expressing their sophistication. And the Soviets discovered vast deposits of smaller, lower grade diamonds in the Siberian tundra and were eager to flood foreign markets with them. De Beers negotiated the exclusive purchase and distribution of the Soviet diamonds, and used the opportunity to diversify their product styles and range. Even small diamonds were diamonds. Reasserting and reinforcing that diamonds were everywhere and anywhere the only recognised symbol of betrothal and love De Beers focused on the new mass medium of television to influence public attitudes towards them. De Beers arranged for actresses and many other celebrities to wear diamond engagement rings whenever they were in-front of television cameras, and for womens magazines to be deluged with their images. Cognitive Learning Also in the 1950s De Beers established the Diamond Information Center to provide the perceived inference of authority, and to endorse the historical information and news released by De Beers. By the end of the 1950s the consistent message had formed the attitudes of an entire generation of US females, and males, and was now considered such a necessary component in the process of engagement that couples who could not afford a diamond engagement ring up front would defer the purchase until it could be paid for, not seeing it as conceivable to forgo or substitute.

To continue the cognitive process, full page advertisements as information charts deconstructing the cut and dimensions (technical information) of diamonds are placed in male oriented magazines, reducing the confronting complexity of differentiation in diamonds and instilling in males a level of confidence and knowledge in diamonds to encourage further investigation and reduce their apprehension. As an industry, diamond retailers perceive the diamond engagement ring purchase as the first diamond buying experience for a male and want it to lead to a lifetime of diamond buying for gifts, anniversaries, birthdays etc. Industry research suggests that a purchaser spends 6 to 9 months investigating the technical aspects of a diamond prior to entering a store to make an engagement ring selection. Sales staff are trained to shift purchasers focus on technical aspects of the diamond and concentrate on its emotional role, to sell the diamond experience. The vast array of choices is presented as facilitating symbols of this experience. The selection process encourages the channelling of the purchasers diamond inspired emotions and presents the individual flaws and quality, colour gradients as unique identifiers of the relationships DNA (originally it was fingerprint, but times have changed). Once sales staff have artfully extracted the purchasers maximum intended price point they are trained to actively disparage all cheaper in-store options to instil confidence in the purchasers choice and infer an act of skill was demonstrated by the purchaser in their final purchasing decision. The characterisation of a diamond engagement ring as integral to the betrothal process, as a concept, had been firmly implanted in the psyche of the consumer so successfully without the use of branding or logos and has transcended the inherent divergence in diamond size and quality with such precision through the formation of attitudes towards diamonds that it no longer matters that: Between 1939 and 1976 the size of the average diamond engagement ring fell from one carat to 0.28 of a carat. Their connotation as a perceived substitute for potential damages under the abolished Breach of Promise to Marry tort had also faded away; it has been established at law that engagement rings (even diamond ones) were one of the few legally recognised conditional gifts and in the event that an engagement is terminated the ring must be returned (though it should be noted that in divorces their value is not commonly pooled in the combined worth of matrimonial assets to be divided). There are estimated to be 500 million carats of diamonds owned by the public today (in rings and jewellery). That is 50 times annual global diamond production. When females forget that a diamond is forever and start re-selling their engagement ring (or not buying one, or instigating a shift in trends to using inherited diamond engagement rings for their own betrothal rather than as family heirlooms) in large numbers, the value of diamonds would collapse. Diamonds do not hold their value; retail diamonds are not investment grade diamonds. A new diamond engagement ring would have an immediate resale value of 30% its original price. Despite popular assertions to the contrary, diamonds are not a commodity. The intrinsic strength of consumers positive attitudes linking diamonds to love and romance has been tested and proven all but impenetrable: When initially entering the mass consumer US market, diamond engagement rings were crudely thought of as the price (or relative worth) of a females virginity. Feminism has gained no traction in identifying and eliminating the engagement ring (diamond or otherwise) as a symbol of male ownership. Following a recent New York Times article on blood diamonds, researchers found that although consumers had a high awareness of the issues surrounding conflict/blood diamonds as little as 5% of respondents who were in the market for diamonds believed the controversy would have any influence on their purchase.

Japan followed as the next target of De Beers diamond engagement ring phenomenon. But in Japan, the glamour of diamond engagement rings was conveyed by being associated with invigorating outdoor activities and perceptions of Western lifestyles. The force of the attitude change sprouted a billion dollar industry in Japan, revised a 1500 year old betrothal tradition and by the fourteenth year of their introduction 60% of new engagements were undertaken with diamond rings.

PART B Group (external influences): Reference Groups Diamond engagement rings have a high social risk and a high symbolic value. Family, friends and work colleagues constitute powerful reference groups that exert an enormous normative influence. In addition to symbolising love and romance a diamond engagement ring conveys: Status Esteem Male income and future earning potential (financial commitment to relationship) Relative value male has for female Tangible symbol of strength of relationship Approval of the ring determines approval of the betrothal; what the male is willing to pay and what the female is willing to accept are closely scrutinised by the engaged couples reference groups with the attributes of the ring extrapolating a sense of the integrity of the male and female. Post proposal, showing the ring to family (mothers approval of the ring is critical), friends and work colleagues and gaining their positive endorsement is crucial for the ritual to be validated. A small diamond will be received with ridicule and shame and has the real potential to terminate the engagement. A newly engaged female would feel intense disgrace at having to show her work colleagues a diamond ring that did not adequately convey what she believed she was worth. Additionally celebrities function as a credible reference group for popularising and giving personality to acceptable variations to the traditional solitaire engagement ring. Celebrities exert an identificational influence on consumers. Individuals express their identity and sense of self through their cut of dress, hair-cut, accessories, footwear, emulating the style of their idolised celebrity. The popular culture and media exposure of celebrities provides a safe point of reference for the aspirational consumers otherwise apparent expression of an individualistic sense of self. Minute details of celebrity diamond engagement rings cut, colour, quality, cost and setting are explored in great length in womens magazines. Their value is beyond the means of mass market consumers, but their coverage has a direct and quantifiable impact on the demand for engagement rings that reproduce elements of publicised celebrity rocks. Like other elements of fashion, celebrities project an external influence on consumer choice here also. While the impending 2010 release of Disneys range of diamond engagement rings (themed around Disney Princesses, complementing Disneys range of Princess bridal gowns and wedding rings) has yet to impact the design expectations of soon to be engaged females, recent examples of direct celebrity influence on the cut and colour of consumer choices include: Catherine Zeta-Jones antique-style diamond Jenifer Lopez pink diamond Paris Hiltons canary yellow diamond Madonnas Edwardian style 3 diamond setting Brittney Spears cushion cut diamond

In addition to diamond engagement ring styles popularised by Elizabeth Taylor, Jacqueline Kennedy, Princess Diana and Princess Grace. Whilst jewellers aim to be prepared with affordable, scaled-down versions of celebrity diamond engagement rings to keep up with consumer demands, the engagement ring styles of celebrities whose relationships end (during engagement or during a period of marriage deemed too short by the public) and thus whose diamond style fails to embody the tenets of indestructible love, find their mass replicated styles fall out of fashion very, very quickly, with the perception being that that type of diamond had failed to live up to the overall diamond ethos.

PART C Generation Y is the targeted diamond engagement ring consumer; tech-savvy, family-centric, flexible, non-conforming and attention-getting, with magazines, internet and commercial television their main media sources. Young adults with high disposable incomes, it is males that make the purchase with females acting as heavy influencers. According to the ABS the average age of marriage in Australia is 30 for males and 28 for females; 75% of couples cohabit prior to marriage (almost half for more than 3 years) of all people currently married in Australia 45% did so between 18 and 24 42% of current de facto partnerships are planning to marry. Average period of engagement prior to marriage is 16 months Diamond engagement ring purchasers straddle the Roy Morgan values segments Something Better, Young Optimism and Socially Aware. The heavy use of magazines in promotions and use of celebrities reflects this (Who, Cosmopolitan, Cleo, Marie Claire, InStyle, Vogue, GQ and Mens Style); for females, magazines are an integral source for comparing popular styles, and being exposed to celebrity trends; for males, magazines targeted at young men contain diamond industry advertisements designed as information charts using technical drawings to explain the different diamond cuts and physical attributes (with no mention of engagement, romance or pressure of any type, and no use of photography - if one was not thinking about buying a diamond engagement ring already, these ads make absolutely no sense). High internet usage amongst Gen Y is catered to; the internet is a crucial (non-threatening) source of technical information, to research styles and trends and gradually also to make the actual purchase. Retailer websites contain selection tools that make the process of exploring / selecting / comparing ring types akin to playing a game. The strong ethical values and concerns of Gen Y have been mildly piqued by controversy surrounding blood/conflict diamonds. The diamond industry has responded to this by instituting the Kimberly Process of diamond certification. There is general concern within the diamond industry that Gen Y is not being communicated to effectively, with too much emphasis on traditional media and not enough activity in social media. There is also concern that global financial circumstances, significantly increased chance that Gen Y will inherit diamonds and have the stones reset for their engagement ring, unprecedented quality and price of lab made compressed carbon manufactured diamonds will all lead to a downward shift in demand for mined diamonds by Gen Y and that it may ultimately be this generation that challenges the notion and practice of unquestionably choosing a unique diamond engagement ring.

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