A Sparkling Idea: Marketing Diamonds Online

Hongyeon Lee

Topics to be covered
. Blue Nile Incorporation . Description of the Case . Case Questions & Answers

. Blue Nile Incorporation

Online specialty retailer of fine jewelry Founded in 1999 and today the largest online retailer of diamonds Based in Seattle, Washington and competes with traditional jewelry stores and online retailer stores
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. Blue Nile Incorporation

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Key feature of being able to search through thousands of diamonds by carat weight, cut, clarity, color and other characteristics, is what attracts many customers to the website

. Blue Nile Incorporation

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In 1995, Doug Williams started a website to sell diamonds online In 1999, Mark Vadon, a manage ment consultant, raised $6 million to purchase 85% of the company and improve the website The companys name was changed to Blue Nile in November 1999
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. Blue Nile Incorporation

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Specializes in educating first-time shoppers about diamond quality and making it easy for them to buy engagement rings Blue Nile has virtual diamond inventory: the company doesn't purchase the diamond from a supplier until the consumer buys it In 2008, its share of the U.S. engagement ring market rose to 4.5% from 4% In September 2011, Blue Nile sold a diamond engagement ring that cost more than $300,000 through its iPhone application
http://www.youtube.com/watch?v=HVwZntOxMec
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II. Description of the Case

Mark Vadon renamed the site as Blue Nile, changed the look, enhanced functionality, added a toll-free phone number, and included more details on how to judge diamond quality He also added virtual design area where visitors can mix and match thousands of diamonds and settings to create the ring, earrings, or necklaces of their dreams (budget) http://www.youtube.com/watch?v =9ax1nTYI5yw

II. Description of the Case

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Maintained the prices well below those of traditional jewelry stores Expanded into colored gemstones and pearls in addition to diamond engagement rings Taking the company globally into 25 countries to market to consumers there

II. Description of the Case

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Only needs a userfriendly web site that educates buyers about the fine points of buying fine jewelry and reassures them about making such a big purchase with just a few clicks
http://www.bluenile.com/
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II. Description of the Case

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Every purchase is covered by a moneyback guarantee and includes free shipping Very valuable items such as the 12.5 carat diamond are delivered by armored truck
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III. Case Question No.1

1. How does Blue Nile affect consumers estimations of likelihood and judgments of goodness/badness?

III. Case Question No.1

(1) Blue nile give Diamond education
Diamond, Jewelry, Rings, Metal, Gemstone, Pearl
http://www.youtube.com/watch?v=qDNMkeWoYRI&feature=player_embedded&noredirect=1

III. Case Question No.1

(2) Blue nile give Diamond Report and International Certificate.

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III. Case Question No.1

(3) Blue nile open customer review and overall product rating.

(4) Expert customer service is prepared by telephone or E-mail Maximization of information opening
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III. Case Question No.2

2. Why would Blue Nile offer virtual design functionality so consumers can mix and match jewelry stones and settings in different ways?

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III. Case Question No.2

The jewelry stone is high effort product. So Imagery or visualization plays a major role in judgments of likelihood and goodness and badness. Moreover, By the mix or setting and match jewelry stones, the consumer face more choice in the types of products they buy. It can minimize the conflict in high effort situation. And it give differentiated value to consumer like customization

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III. Case Question No.3

3. Using this chapters concepts, explain Mark Vadons decision to change the companys name from Internet Diamonds to Blue Nile.

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III. Case Question No.3

In high-effort decisions and high-effort decision making process, The Brand is important consideration set. But internet Diamond is not proper to brand name In high-effort feeling based decisions, with affective decision making, consumers make a decision because the choice feels right rather than because they have made a detailed, systematic evaluation of offerings. Brands can be associated with positive emotions such as love, joy, pride, and elation. These emotions can be recalled to play a central role in the decision process. Consumers sometimes buy a product, such as jewelry, simply to make themselves feel better
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Q & A Session