Engagement Rings

It was the marketing magic of De Beers which persuaded Americans at the turn of the century to adopt the European custom of giving a diamond engagement ring as a token of marriage. The same magic worked again in the 1950s when the Japanese in their desire to be Western became the world’s second largest market for cut diamonds. And when the Oppenheimer family, who own De Beers, found themselves with a mountain of unsold small diamonds on their hands, they dreamt up the idea of the eternity ring as a means of getting rid of them.

Successful advertising

A perfect example of a nearly total monopoly, De Beers has always found ways to boost demand and cut surplus production. When General Electric discovered a way to produce high- grade synthetic diamonds, De Beers still managed somehow to prevent GE undercutting their prices. In fact, the Oppenheimers have spent more than $160 million a year repeating their message that “diamonds are forever”, probably the most successful advertising slogan of all time. And even when profits are down and their share price takes a tumble, De Beers makes sure that the legend of the diamond lives on.

Massive stockpiling

Yet throughout its long and chequered history, what De Beers has feared most is the prospect of plunging prices if other diamond producers were ever to dump their surplus gems onto the world’s market. After all, it was by threatening to do just that that the Oppenheimers were able to seize control of De Beers in the first place. So far the company has managed to soak up excess supply by buying up most of the diamonds in the world. But this has led to a massive accumulation of stocks in South Africa with perhaps a further ten billion dollars worth in Russia alone. How long De Beers can contain such a huge surplus is now open to question and perhaps even they will eventually fall victim to the relentless laws of supply and demand.

Response

What is your immediate reaction to the information given in the article? Tick the response nearest to your own.

1. I’m amazed.

2. I’m appalled.

3. I don’t believe it.

4. I think it is a bit biased.

5. It doesn’t really surprise me.

6. Actually, I knew about it already.

Find the Expressions

Look back at the article. Find the expressions which mean:

1. to moderate the extent of its control ____________________________________

2. a sharp decline in the value of its stock ____________________________________

3. the varied fortunes of the past ____________________________________

Information check

In groups, spend 10 minutes preparing a set of questions about the article to ask the other groups. Use these question starters:

1. Why is it that…?

2. What would you say was…?

3. What are the implications of …?

4. What precisely…?

5. What are the chances of…?

6. What do you understand by…?

7. According to the article…?

8. How might…?

LANGUAGE FOCUS

The State of the Market

Match the expressions to the following meanings:

to be squeezed out of the market	1. start competing in the market
the market is buoyant	2. be prevented from competing
the market has collapsed	3. the market is bigger than it used to be
the market has dried up	4. the market is smaller than it used to be
to break into the market	5. the market is in a good state
the market has grown	6. the market is in a bad state
the market has suffered	7. supply exceeds demand
to enter the market	8. describes a sudden process
the market is depressed	9. describes a gradual process
to flood the market
the market has shrunk
the bottom’s dropped out of the market
to be pushed out of the market
to penetrate the market
to saturate the market