Let’s talk about fertilizers which are probably the most unglamorous stinky product exist. The reason for it is my mentor, Professor Malcolm McDonald, one of the world’s leading marketing experts. Prof McDonald was engaged in 1988 by the International Fertilizers Association. Before starting, the president of the association told Prof McDonald that “we have declared officially fertilizer as a commodity”. Prof McDonald responded that this explains why, when going on the internet, he discovered that there was not one single manufacturer of fertilizers in the world making one dollar of profit.
A member of the association was ICI Fertilizer, part of the Imperial Chemical Industries (ICI), the largest manufacturer in Britain throughout its existence. ICI Fertilizer was on a brink of collapse and they reached Prof McDonald for help after trying everything else. When asked who buys from the merchants the answer was that “they all buy on price” and “that’s what our sales force tells us”. Prof McDonald made a point that in all research he’s done on every continent in the world and for all of big companies in the world he couldn’t find any market anywhere in the world where the price segment was greater than ten percent. Actually, fertilizer companies were ignorant of what the true needs of the farmers were.
Ninety percent of the consumers had totally different needs that weren’t addressed by ICI Fertilizer who was focused on price. Prof McDonald segmented that ninety percent into six segments, each following a different marketing approach.
Within six months ICI Fertilizer became the most profitable subsidiary of ICI and the only profitable fertilizer company in the world.
All one needs is to replace “fertilizers” with “diamonds”. Commoditization is the main problem of the diamond market today. We know that we are right because we did it. Even nowadays we manage to successfully service our customers and we don’t suffer from any of the current market malaise. I am sure that Malcolm McDonald is proud of me, his student.
Until now we ran a boutique operation gaining knowledge and experience nobody else has. It is now time to try and to help our colleagues and to revive this beautiful industry. Are you ready to join us in our trip?