Perhaps the greatest attention in the field of diamond and jewellery business on both sides of the Atlantic Ocean is nowadays attracted to Israel diamantaire Lev Leviev. His vigorous penetration into the Russian market and the expected opening of the first Leviev Diamonds boutique in New York made his activities discussed not only by business mass media but also by publications aimed at a broad audience.
In particular, they continued to discuss the purchasing by the Leviev’s LLD Group of some part of assets belonging to Lukas-M, a Russian company, known to supply Valentin Yudashkin’s Trading House and possessing exclusive distribution rights for the Pamela Anderson and Playboy trademarks in Russia.
According to the “Secret Firmy” Magazine, the LLD reason for buying this asset was rather prosaic. Until now, the stores belonging to this group mainly sold commodities manufactured by the Moscow Jewellery Plant (MJP). However, its capacities were already inadequate for the expanding network, so LLD bought from Lukas-M only its production facilities and wholesale division leaving its fashion brands and famous customers unattended. “We preferred not to waste time for expanding our own wholesale department and just to add a very strong wholesale player to the existing framework”, explained Denis Adamsky, General Director of MJP.
Now the company’s retail network will also operate a new trademark – Lukas-Zoloto. According to Adamsky, this will allow to embrace the bottom- and medium-price-level segments, whereas the MJP products are positioned at a more expensive level.
Artem Podstreshny, General Director of the Russian Jewellery Network news agency, believes that MJP is quite able to set up the largest network: “During the last five years the average annual growth rates did not drop lower than 20% and it is quite feasible to expand one’s sales network.” However, Denis Gorinov, Lead Marketing Consultant of Finexpertiza Consulting, notes that this attempt to promote the second brand through its own network is unlikely to be successful for MJP: in his opinion, consumers in the medium and bottom price segments are mainly oriented not to brands but to prices and outward appearance of jewellery.
However, the manufacturers do not agree with such assessment. According to Oleg Ognev, Chief of Marketing Department at Krastsvetmet (OAO Krasnoyarsk Plant of Precious Metals named after V.N. Gulidov), the research of jewellery market demonstrated that today to stay competitive it is necessary to establish own jewellery brands. In 2008, Krastsvetmet plans to move new Krasberry Brand products into the market.
The “Continent Siberia” weekly reminds that this plant is operating for more than 60 years and its jewellery production accounts for 25% of the company turnover. According to the Step-by-Step Marketing Agency (Moscow), the share of Krastsvetmet in the Russian market among domestic manufacturers is equal to 5%. The plant estimates its share in the Russian jewellery market as 7% (25% in the “gold chains” segment).
Formerly, the pant produced its jewellery under the Krastsvetmet Brand, but, according to Oleg Ognev, the development of new brand was generated by their desire to set up a strong national jewellery brand.
The company would not disclose the amount of scheduled investments into promoting the Krasberry trademark. The plant will not develop its own retail network or company stores to promote this trademark and intends to go on with already tuned up sales through the existing dealer network. Product branding, says Ognev, will not affect the pricing policy. Krastsvetmet representatives define their product segment as belonging to the mass consumption and medium ranges.
Market participants, according to “Continent Siberia”, were positive in their attitude to this manufacturer’s move. Though jewellery consumers in the mass consumption and medium price segments pay more attention to the price-quality ratio and the manufacturer’s name, the trademark may also influence their decision to buy.
“There would be no necessity in devising a new trademark if the plant’s name contained the word “jewellery”. However, when in the price tag of a jewellery item it is written that it is manufactured by the “precious metals processing plant” this may repel consumers,” believes General Director of the Adalit Jewellery Plant in Novosibirsk Vitali Vitukhin. “I think that this was a forced measure for the manufacturer. For example, we are positioned as a Novosibirsk jewellery plant, so we do not have to breed a separate trademark.”
According to jewellery retailers, the new trademark may facilitate the promotion of the manufacturer’s products in the field of retail sales – it will be easier to promote a trademark bearing an easy and ringing name within a marketing campaign. “We are not promoting brands of separate manufacturers, we are promoting a network and this is the specific feature of our format,” says Alexander Tarasov, heading the promotion group working for the «585» jewellery network. “However, jewellery manufacturers should by all means promote their trademarks.”
In the opinion of Vladimir Verkholantsev, President of the Petra Communication Group, “abbreviations similar to Krastsvetment all belong to ancient times; they are not able to attract modern consumers any more.” According to Verkholantsev’s estimates, the company may have spent 100 000 roubles for developing the new trademark, including naming, graphic stylistics, positioning in the market and moving it to “the minds of consumers.”
Konstantin Salomein, Sales Department Director of the Atoll Siberian Jewellery Plant, believes that his plant does not need its own retail network, since its dealer network is already sufficiently developed and the plant products are widely represented there. Jewellery market players were skeptic towards the company’s expectation to increase its profit after introducing the new trademark; they remarked that it would be more correctly to expect an image effect.
“Appearance of a new trademark is unlikely to change the company’s profit in a serious way – the plant products are already in great demand. Nevertheless, this is undoubtedly an image raising action. After launching the trademark de facto the jewellery production will be separated from the affinage production,” sums up Vitaly Vitukhin.
The “Russia” weekly reported that Petersburg animators started their work on an animated film about a baby mammoth, which could become the symbol of the Olympic Games-2014. One of the initiators of this film was Dmitry Ilkovsky, Head of the Petrovsky Municipal District of Saint Petersburg who was also the Chairman of the Organizing Committee on promoting the baby mammoth to be an amulet of the Games-2014.
Among those anxious to see the baby mammoth win were Yakutia jewellers who sent to Saint Petersburg some miniature mammoth samples with white and yellow gold cover plates abundantly encrusted with diamonds and Yakut emeralds - chrome-diopsides. “If the baby mammoth will be officially approved as an Olympic symbol, all the VIP guests of the Olympic Games – 2014 in Sochi will receive such valuable presents,” said Dmitry Ilkovsky.
Kostroma jewellers are trying to use the image of their famous compatriot Ivan Susanin to their own benefit. The Kostroma GTRK television channel reported that by the 400th anniversary of the Romanov Dynasty there would be restored the monument to Tsar Michael Romanov and Peasant Ivan Susanin. This may be a good pretext to create new souvenirs: Vladimir Purygin, Director of the “Golden Ring of Russia” Guild of Jewellers, says, “Of course, we would like to express it all in metal, in enamel and in Tula silver. People will come here not only to see our city, but also to take some precious thing away with them.”
To make silver, gold and plastic images of Romanov and Susanin appear in souvenir boutiques there will be needed a whole workshop producing souvenir products. Actually, there should be created a new industry to do that. The restoration of the monument opened wide opportunities for creative work.
Souvenirs are only one part of the ongoing propaganda of the great event – the celebration of the 400th anniversary of the Romanov Dynasty. It seems that Ivan Susanin will once again play the role of a savior. However, this time he will save the tourist future of Kostroma bringing prosperity to this city.
It is worth to take the PR-action of Sky Link disguised as a news event for separate discussion. The beginning of sales for the Black Tie telecommunication luxury offer valued at 145 000 roubles was marked by breaking news that “among the Swarovski rhinestones decorating this posh device there accidentally occurred a genuine 2-carat diamond of high clarity worth around 3 million roubles.” (See the application for further details.)
This peculiar “lottery for oligarchs” is evidently the first PR-action of this kind in the Russian luxury market. It appears that it is aimed at making up a certain “legend” for this product, which would not so much influence the sales, but would create an additional image effect for the company.
