DTC Reorganizes Marketing Division

By Rob Bates -- JCK Online, 9/1/2007 2:00:00 AM

De Beers is splitting its marketing and sales departments, a move that may affect its future advertising plans.

In most companies, the sales and marketing functions work together, but De Beers does not have a conventional business model. “Sales” refers to how it divides rough among its clients; “marketing” refers to the advertising and promotion of finished diamond jewelry.

When De Beers launched Supplier of Choice in 2003, the two became intertwined, as DTC clients were judged on their marketing efforts. The DTC's Business Initiative was designed to encourage clients to do co-op advertising for DTC “beacons” like the three-stone ring and Journey products.

Supplier of Choice II has eliminated the Business Initiative, and some say the marketing/sales split indicates that the DTC will no longer judge its clients based on marketing. DTC officials have said that while marketing remains “intrinsic” to Supplier of Choice, it now evaluates sightholders on the entirety of their businesses.

Spokeswoman Lynette Gould said the change will make the marketing and sales divisions more focused on their core tasks. “We believe that having separate divisions, with separate management structures, will enable us to focus more on maximizing value for our clients and producer partners,” she said.

She added that the new marketing department will concentrate on three things: “big ideas” like Trilogy (the Japanese version of “three stone”); the Forevermark, its proprietary insignia that it has been testing around the world; and maintaining consumer confidence.

No Changes in U.S. Plans, De Beers Says

De Beers may be divorcing its vaunted marketing division from its sales department, but U.S. advertising will be “business as usual,” spokespeople say.

While De Beers officials have said they planned less generic advertising, De Beers will keep promoting nonbranded “beacons” in the United States, Stephen Lussier, director of external affairs, told JCK in an exclusive interview in Amsterdam. “All our analysis says that the main driver of diamond growth in America has been the De Beers–originated beacons [like three-stone rings and Journey],” he said. “If you strip those out, the market is rather flat. We are interested in more proprietary things, but we don't want to risk the American market.”

He said the company “wants to do more with the Forevermark” but noted it's a “long way off” from being introduced into the United States.

He also reiterated, as De Beers executives have in the past, that it has no plans for a more formal U.S. presence, even when its legal problems are finally wrapped up. “We did feel the need to clear those legal hurdles,” he said. “It's uncomfortable to have these problems in a market that consumes half your product. It is just not good business to have that in your risk portfolio.”

But he added: “I don't foresee, at least in the near term, any business presence. We work well in America as it is. It's expensive to do it just for fun.”