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May 27, 2006

De Beers Franchises Its Brand Name

De BeersI think Franchising is certainly turning out to be one of the most powerful ways to quickly build brand name awareness.

Take the diamond giant De Beers, for example. How many people could tell you that De Beers until recently sold 90% of the world’s diamonds, or that the company was originally based in South Africa?

De Beers sought to change all that in by going into retail partnership with luxury giant LVMH (De Beers LV), opening a series of high-end retail stores around the world and hiring models like Iman to promote its ubiquitous A Diamond is Forever slogan.

Not satisfied with lacklustre sales in its De Beers-LV stores, De Beers is now promoting its name through what seems to be a kind of where they permit their name to be used by other (non LVMH) resellers who open what are not De Beers-LVMH stores but jewelry shops that simply bear the De Beers name but are not managed by De Beers LV.

This means there can be a few levels between the “real” De Beers and the actual store where you buy a De Beers diamond (one writer likens this to a Tupperware sales pyramid). In effect, now the company seems to be profiting by franchising the De Beers brand name, not just the diamonds the company digs up. De Beers seem to be willing to trade exclusivity for exposure…. and profit.

Of course, I know that franchising a name is nothing new, and this week even the real estate industry announced that it considers franchising the best, fastest, most efficient way to

I think it's fair to say, to paraphrase De Beers, "Franchising is Forever."

Posted by William Lozito at May 27, 2006 6:41 PM
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