Global customer-centric brand transformation

Rio Tinto is a leader in finding, mining and processing the earth’s minerals. Major products include aluminium, copper, diamonds, energy products, gold, industrial minerals and iron ore. The Group’s activities span the world but diamond mining is concentrated in Canada, Australia and Africa, with its diamond marketing and sales offices based in Belgium and India. In 2004, diamonds accounted for 5% of the Group’s turnover (ie over $500m) and 8% of adjusted earnings (nearly $170m).

Rio Tinto Diamonds is a leading proponent of the Kimberley Process which ensures only legitimately mined and traded rough diamonds are introduced into the world market. Programmes are in place to ensure only those firms operating to acceptable standards of social responsibility are able to process diamonds mined by Rio Tinto.

An uncertain market

Diamonds are a complex, traditionally non-transparent market. Essentially, mining companies sell their rough diamonds to producers (or ‘diamentaires’) who cut and polish the stones ready for polished trading to jewellery designers and manufacturers. In turn, jewellery designers and manufacturers sell to jewellery retailers, ready for the end-consumer. This value chain is undergoing unprecedented levels of change and uncertainty created by, among other factors, the rise of synthetic diamonds, consumer rejection of ‘conflict’ diamonds, the heavy end- consumer branding created by mining rival De Beers, producer and retailer discounting and new internet-based sales channels. 

Rio Tinto Diamonds engaged CGA to help understand these marketplace dynamics and to address what downstream branding and marketing investment Rio Tinto should undertake.

A brand new strategy

Starting in September 2004, CGA conducted a thorough review of brand strategy for Rio Tinto Diamonds, culminating in the definition and creation of new trade and consumer brands, and current store trials in 6 leading US independent jewellery retailers of a Rio Tinto Diamond branded proposition. The work has included:

Market & brand strategy study

CGA conducted a 3 month review analysing the global diamond market, with a particular focus on the US and on understanding downstream branding opportunities. Rather than follow the route that De Beers have taken (of heavy above-the-line, end-consumer orientated branding), the strategy recommended using marketing investment to reinforce the role of diamentaires, supporting them in securing the right retail channels for their product, with the ultimate objective of helping to sustain premium margins for Rio Tinto Diamonds.

Creation of new trade & consumer brand programmes

Prior to the study, Rio Tinto Diamonds marketed its stones under the names of its individual mining company sources, such as Diavik (Canada) and Argyle (Australia). The new brand strategy sought to leverage this ‘mine of origin’ authenticity, whilst creating a uniform brand identity for Rio Tinto Diamond stones. The initial resulting programmes are:

• Select Diamantaire: Designed to help Rio Tinto Diamond’s immediate customers secure the right retail channels, the Select Diamentaire training and marketing programme celebrates the art of diamond making, and reinforces with retailers the reputation of the diamentaires that Rio Tinto Diamonds chooses to work with as the very best-in- class.
• Mine-to-market: Designed to elevate the Rio Tinto Diamond brand at the point of purchase, the Mine-to-Market programme includes comprehensive in-store display and marketing materials to convey the history, craftsmanship and value of diamonds; as an example, each stone sold under Mine-to-Market carries a beautifully designed book with outstanding photographs detailing the story of that individual stone from its mine of origin, through to cutting and polishing.

Implementation in the US retail trails

Mine-to-Market is now (late 2005) being trialled in 6 leading US independent jewellery retailers. CGA’s role has included designing and building a unique and luxurious in-store display platform made from kimberlite (the waste product of diamond mines), the creation of supporting point-of- sale, and the training of US retail staff. The trial programme is expected to last under Spring 2006.

Return on investment

CGA constructed a rigorous measurement programme for the trials to assess the return on marketing investment by Rio Tinto Diamonds. The measurement programme includes exit interviews at retail with buyers and non-buyers, calculation of retail market share versus non- branded stones, and the tracking of value and volume of Rio Tinto Diamond branded stones across the value chain from diamantaires to retailers. Results included:

• 10% value enhancement of diamond at point of purchase
• 100% enrolment of key customers to Select Diamantaire programme
• 5th element – telling the diamond story is now a key part of the marketing campaign