Conflict Diamonds - Consumers Slow to Respond, According to MVI Marketing Ltd.

Business Editors

PASO ROBLES, Calif.--(BUSINESS WIRE)--May 7, 2001

In October 2000, business consulting and market research company MVI Marketing Ltd. (MVI) conducted the first consumer research study into the issue of conflict diamonds.

Reporting the results from this study, MVI noted that consumers were largely unaware of the conflict-diamond issue and did not rank "political issues in the country of origin" among their significant purchase considerations.

In a new study on the issue (May 3, 2001) MVI reports that the number of consumers who were aware of conflict diamonds has increased just 2%, from 7% to 9%.

In absolute terms these numbers were still very small.

"This is a somewhat surprising result," said Liz Chatelain, CEO of MVI.

Chatelain went on, "Given the publicity this issue has received in the consumer media since the last study was completed six months ago, we would have expected there to be more of an impact on consumer perceptions.

"Of more interest to us," said Chatelain, "was the fact that the numbers of consumers who said they would buy a diamond even if they knew it came from a conflict region actually increased, from 24% to 27%."

A majority of consumers (73%) reported that they would still not buy a diamond knowing that it came from a conflict source.

"Clearly the U.S. diamond consumer remains a very pragmatic entity at this time. Our most recent study continues to highlight the same consumer purchasing concerns," said Chatelain.

So what concerns the U.S. consumer today?

Chatelain quoted the MVI Top 5 consumer purchase concerns as:

-- Price

-- Authenticity of the stone

-- The jewelry setting

-- Color of the diamond

-- Clarity of the diamond

Most consumers (73%) identified South Africa as the source of the diamonds they purchase in U.S. retail stores, while 9% of respondents identified Angola and Sierra Leone.

"Country of origin is not currently a purchase consideration for consumers," said Chatelain.

Chatelain continued, "Only 5% of respondents cited country of origin as important to them in our current study, while 6% cited political issues in the country of origin as significant."

One explanation for the low levels of consumer awareness and concern is the relevance of the media to the consumer in the purchase transaction.

"Only 2% of respondents cited magazine, newspaper or other advertising as sources of pre-purchase information," said Chatelain.

"A majority (53%) of consumers rely on their retailer's, their families' or their friend's expressed opinions when making a diamond jewelry purchase decision," said Chatelain.

A copy of the full report on the most recent study is available from MVI Marketing Ltd. for US$495.