Discuss the marketing concepts of high-end jewelry in Chinese market

A Thesis Proposal 2

A Thesis Proposal on New Marketing Concepts in Chinese Diamond Market

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A Thesis Proposal on New Marketing Concepts in Chinese Diamond Market

Introduction

Background

China's improved business environment and economic infrastructure in the past three decades have led to essential and far-reaching changes in the consumption of high-end jewelry, the diamond market. Over a short period, China's economy has moved from centralized planning to state capitalism. Through a socialist market economy, China has seen a contemporary world with its emerging wealthy middle class, leading to increased attention to the jewelry industry. Through reforms and continuous improvement of income, the diamond market has recovered with increased consumption of jewelry. Likewise, to other sectors, it is evident that the development of diamond markets is directly related to economic conditions. With a majority of the high-net-worth population, the high-end merchandise consumption has led to boom improved the Chinese market. With more devised marketing strategies and new marketing concepts, the high-end merchandise has taken a new direction. With robust economic progress, the Chinese market accounts for robust demand for polished diamonds far faster than any other economy.

The incorporation of complicated technologies and practical marketing concepts has made China the second-largest market for refined diamonds, with a 60% market size. China's young buyers have been influential on the world-diamond trade rate, with a whopping 80% market-size while in the US, the young population only bears 60%. Indeed, with China's newly integrated marketing concepts, there is still room for the diamond market's growth as a result of increased Western mode of life. The changed expectations of young consumers, with more excellent choice and income, have led to rising diamond jewelry prosperity. Localized, cultural, and foreign marketing have led to the development of diamond marketing with conformity in consumption behavior and consumer groups. However, the conspicuous consumption has been dented by Covid 19 pandemic and government crackdown, but the Chinese diamond market is now climbing again.

A steadily increasing China's GDP and Growth Trading

Thesis Statement

Therefore, with the fastest ever-expanding diamond market, this paper discusses new marketing strategies for high-end jewelry within the Chinese diamond market. This is with consideration to the Chinese diamond market in line with consumer behavior, consumer groups, and the changed expectations of polished diamonds' robust demand. The paper also identifies the diamond industry actors with the impacts of the marketing strategies and the challenges faced in the Chinese diamond market segments.

The Chinese Diamond Market Industry and Marketing Strategies

According to Chamnam Nouri, the Chinese market also forms the main market for foreign jewelry giants. The Chief Executive Officer once said that "although the specific proportion is not disclosed, the proportion of Chinese market sales in the overall market is very high, which also makes us look forward to this market's performance." With the three categories, foreign brands, Hong-Kong funded and the domestic brands, international brands represented by Bulgari and Cartier have seen their expansion into third-tier Chinese cities. According to Goldman Sachs investment bank, the global value chain of jewelry products in 2008 was $40 billion, ranking third after wine and spirits, perfume, and cosmetics. The total sales volume of luxury goods in mainland China is US $6 billion, of which jewelry is the US $1.3 billion, ranking fifth. It is worth noting that the annual growth rate of the luxury goods market in China is as high as 25-30%. At present, China consumes 253 tons of gold annually, which is the third-largest gold consumer globally, accounting for 8% of global consumption. It can be seen that China's jewelry market has great potential.

The diamond market has provided for strong spiritual resonance and emotional connection to the Chinese men and women. The fascination and increasing wealth have accelerated the growth of the diamond market. This paper explores the Chinese diamond market in terms of its structure, the applicable business models, and marketing strategies. Preference for women to polished jewelry products such as pendants, rings, and necklaces has powered the market niche. Both low and middle-income households possess diamond jewelry. This has led to the growth of the industry. With the higher demand, the industry consists of domestic consumption, jewelry manufacturing, and diamond processing sectors. Cheap and skilled labor has led to the growth of the industry. Additionally, tax-free and honest China's Hong Kong diamond reduces risks within the diamond jewelry industry.

The structure of the industry has undergone several changes with the functionality of market needs and governance. Several SMEs provided 60% of GDP and 40% of the profit. Shanghai Diamond Exchange is responsible for the reduced tax rates and controls for the key to the success of the trading platforms. Times the gray market leads to in-opportunistic and unethical processes in the diamond industry. Ever-evolving business environments may challenge the employees, and therefore, new businesses must consider core values and culture.

Business models in the diamond industry include socially-embedded, rule-based, and mixed strategies. This paper explores the advantages of ad disadvantages of each approach. The socially-embedded model leads to formal contracts for the maintenance of relationships between parties with reduced costs and suppress problematic behaviors. The related infrastructures and institutions make it easy for the marketing of polished diamonds. Secondly is a rule-based strategy that aims client attraction rather than retention. It is about trusting the current infrastructure. It calls for effective sanctioning mechanisms through legal means to protect and decrease risks. The last is the mixed strategy, which looks at both socially-embedded and rule-based strategy. This protects unique market dynamics, thus improving the performance of the Chinese diamond market.

Research Objectives

China’s diamond market has grown both in size and purchasing power. The consumer is significant and strategic for the Chinese market, hence understanding the marketing strategies and concepts is essential for luxury jewelry industries to maintain the ever-growing demand. For the achievement of the mentioned aim, the research objectives include;

1. To identify and investigate the marketing strategies in the Chinese diamond market.

2. To identify new marketing concepts integrated into the Chinese diamond market.

3. To identify the impacts and problems of each model.

4. To propose a conceptual model that best explains the Chinese diamond market.

Research Questions

1. What are the new marketing concepts and strategies in China’s diamond market?

2. How the concepts influence customers' perception of the jewelry products?

3. What are the main variables influencing consumers' perception of jewelry products?

Research Contributions

1. The study will provide both practical and theoretical literature elements to the academic world.

2. The work will also explore China’s self and societal view on the purchase of luxury products, thus explaining which marketing strategy best suits customers’ attraction.

3. It will help marketers know the best marketing strategy to use for the satisfaction of consumers’ needs.

References

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Angela Tunner Leaders(2019) Thinkers and Creators : Interview with Luxury Marketing Expert Lorre White. EAT LOVE SAVOR, Available at: https://eatlovesavor.com/leaders-thinkers-and-creators-interview-with-luxury-marketing-expert-lorre-white/

Badaró, M., 2020. Pedagogies of value: Marketing luxury in China. HAU: Journal of Ethnographic Theory, 10(1), pp.85-98.

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Lambert Bu, Benjamin Durand-Servoingt, Aimee Kim, and Naomi Yamakawa (2017) Chinese luxury consumers: More global, more demanding, still spending. Available at: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/chinese-luxury-consumers-more-global-more-demanding-still-spending [Accessed August 2017].

Marc Bain (2018) Nobody knows what luxury is anymore. Available at: https://qz.com/1303457/nobody-knows-what-luxury-is-anymore/ [Accessed 16 June 2018].

Pereira, B., Teah, K., Sung, B. and Teah, M., 2019. Building blocks of the luxury jewellery industry: conversations with a CEO. Asia Pacific Journal of Marketing and Logistics.

Rao, X. and Wang, K., 2017, June. The rational regression of high-end consumer market. In 2017 2nd International Conference on Education, Sports, Arts and Management Engineering (ICESAME 2017). Atlantis Press.

Thin, R., 2018. Tammi Jewellery: Market research for entering the Hong Kong market; market channels and brand positioning in the market.