No doubt, diamonds have special qualities — exquisite beauty, extreme hardness — and a rich symbolic load. Their astrological significance goes back to the ancient Vedic traditions in India where diamonds stand for the planet Venus, the symbol of love and welfare in life. In ancient times, diamonds were thought to have magical properties and were associated with power, hence their presence in royalty jewels such as kings' rings etc.

The popular belief is that diamonds were and will remain the most valuable precious stones of all. Hence their association with love and romance, tightly linking the moment of the marriage proposal to the one and only, unique diamond engagement ring. But whether the diamond myth has preserved its value in time by itself or it is artificially maintained is an arguable matter.

The Central Selling Organization

It is known that time ago diamonds were scarce. Until the late nineteenth century the entire diamond production only consisted in a few pounds a year. Fact is that soon enough new important diamond sources were uncovered and diamonds became not so rare stones, hence their value, based also on their scarcity, menaced to decrease. The investors in South African diamond mines found the solution to this — merging. Thus, in 1888 was created De Beers Consolidated Mines, Ltd. Its marketing instrument is the Central Selling Organization.

The CSO's transactions are known to cover about 80-90% of all rough diamonds marketed in the world. Its main role is to maintain stability in diamond markets by controlling supply and demand.

To see to what extent the CSO influences the diamond supply and its great financial power, look at these: in the early 1980s, during a major downturn in the diamond industry, the CSO withheld a stockpile of about $2 billion.

In fact, diamonds are not as scarce as their artificial price suggests. If all the world production of diamonds were put onto the market at the same time, the price of diamonds would fall dramatically.

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De Beers' position on the diamond market was consolidated even more when several rough diamond producers unsuccessfully tried to take an independent position and were eventually forced to join the CSO again as they did not succeed in obtaining any important price benefit.

Besides holding control over supply, De Beers has also been managing to control the demand on the market, developing successful marketing strategies by creating large demand where little existed before.

Here are only a few samples of marketing ingenuity:

• The conquest of new market domains by speculating cultural niches in countries such as Japan, Germany.
• Popularizing the slogan A diamond is forever since 1938 resulted in proclaiming the diamond engagement ring a sort of national official engagement ring in the US.
• Promoting the idea that two month's salary is a reasonable amount to spend for an engagement ring.
• Enriching the diamond engagement ring symbolism with the concept of the “past, present, future” three-stone design.
• Think of the popularity of models such as diamond stud earrings or diamond tennis bracelet.
• The competition from the synthetic rocks is planned to be vanquished by another slogan: real men give real diamonds.
• Recently the right-hand ring concept came into being: it addresses to the modern, independent career woman who buys her own diamond ring and has become a must for the fashion-attentive women. The idea is: even if you don't want to get engaged you still have to have a diamond ring!
• Male diamond rings are more and more popular these days. The need of a diamond ring for any self-respecting male becomes more and more a “necessity” together with the up-to-the-minute car.
• The hot trend seems to be directed towards the most expensive items among celebrities such as film stars or singers — fancy colored diamond jewelry. The 2002 Academy Awards was a good occasion for Nicole Kidman to wear a choker containing three yellow diamonds and Sharon Stone wore colored diamonds at the Cannes Film Festival. No need to say more about J.Lo's pink diamond engagement ring!

Diamond engagement rings' popularity and exclusive acceptance as the only valid choice for engagement is therefore the product of a marketing policy. And what a good job it did! Only in the US the annual diamond jewelry sales in 2003 rose reportedly at $29.1 billion (constituting nearly 50% of the global diamond jewelry sales), of which $4.3 billion were spent on diamond engagement rings alone (83% of the US brides received diamond engagement rings in 2003).

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