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A Sparkling Idea: Marketing

Diamonds Online

Hongyeon Lee

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Topics to be covered

. Blue Nile Incorporation

. Description of the Case. Case Questions & Answers

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. Blue Nile Incorporation

Online specialty retailer of

fine jewelry

Founded in 1999 and today

the largest online retailer ofdiamonds

Based in Seattle, Washington

and competes with traditionaljewelry stores and online

retailer stores

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. Blue Nile Incorporation(continued)

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 tothe website

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. Blue Nile Incorporation(continued)

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(continued)

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 asupplier 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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http://www.youtube.com/watch?v=HVwZntOxMechttp://www.youtube.com/watch?v=HVwZntOxMechttp://cbcaseanalysissparklingidea%28team1%29.ppt/

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II. Description of the Case

Mark Vadon renamed the site asBlue Nile, changed the look,enhanced functionality, added atoll-free phone number, andincluded more details on how to

judge diamond quality He also added virtual designarea where visitors can mix andmatch thousands of diamonds and

settings to create the ring,earrings, or necklaces of theirdreams (budget)

http://www.youtube.com/watch?v=9ax1nTYI5yw

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http://www.youtube.com/watch?v=9ax1nTYI5ywhttp://www.youtube.com/watch?v=9ax1nTYI5ywhttp://www.youtube.com/watch?v=9ax1nTYI5ywhttp://www.youtube.com/watch?v=9ax1nTYI5yw

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II. Description of the Case(continued)

Maintained the prices well belowthose of traditional jewelry stores

Expanded into colored gemstones

and pearls in addition to diamondengagement rings

Taking the company globally

into 25 countries to market toconsumers there

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II. Description of the Case(continued)

Only needs a user-

friendly web site that

educates buyers about the

fine points of buying finejewelry and reassures

them about making such a

big purchase with just afew clicks

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http://www.bluenile.com/

http://www.bluenile.com/http://www.bluenile.com/

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II. Description of the Case(continued)

Every purchase is

covered by a money-

back guarantee andincludes free shipping

Very valuable items

such as the 12.5 caratdiamond 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?

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III. Case Question No.1

(1) Blue nile give Diamond educationDiamond, Jewelry, Rings, Metal, Gemstone, Pearl

http://www.youtube.com/watch?v=qDNMkeWoYRI&feature=player_embedded&noredirect=1

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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 opening11

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III. Case Question No.2

2. Why would Blue Nile offer virtual design

functionality so consumers can mix and matchjewelry stones and settings in different ways?

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III. Case Question No.2The jewelry stone is high effort product. So Imagery or

visualization plays a major role in judgments of likelihood andgoodness 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 makingprocess, The Brand is important consideration set. But internetDiamond is not proper to brand name

In high-effort feeling based decisions, with affective decisionmaking, consumers make a decision because the choice feelsright rather than because they have made a detailed, systematicevaluation of offerings. Brands can be associated with positiveemotions 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, simplyto make themselves feel better

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Q & A Session