Marketing gets serious

The Australian pearl industry has responded to the weakness in the global market over the past five to six years by lifting its focus on marketing and branding.

While industry players welcome the increased spending, they also recognise that more should have been done in the past.

“Everyone is putting money into marketing now when revenue is lower,” Rosario Autore, of Sydney company Pearlautore, said.

“They should have done a lot more when the times were good.”

In the late 1980s and 1990s, when the industry was booming, the industry easily gained top prices for its entire output.

Supply was limited by ‘mother nature’ and international demand was very strong.

Now the industry has to contend with weak demand and increasing hatchery-based production from competitors in Asia.

The marketing effort is designed to highlight the quality premium that still applies to Australian pearls.

“Australia still has the best pearls by far,” said Mr Autore.

Pearlautore is one of three companies that dominates the marketing of Australia’s prized south sea pearls.

The biggest marketer is Darwin-based Paspaley Pearling Company, which has established the south sea pearl consortium.

It markets about 60 per cent of Australia’s annual output, through its own production and through alliances with other producers.

The second big marketer is Perth’s MG Kailis Group which, like Paspaley, is also a big producer.

A major initiative was the launch of the Kailis Australian Pearls brand in Spain in 2002.

The branding is designed to reassure customers that they are buying only Australian south sea pearls from the Kailis’s farms in north-west Australia.

Pearlautore represents the ‘independent’ Australian producers, including Arrow, Arafura, Blue Sea, Cygnet Bay and Clipper Pearls.

It also represents two Indonesian producers, including Australian listed company Atlas Pacific.

As part of the upgraded marketing focus, the industry has also reduced its use of auctions.

Mr Autore said producers were virtually dumping stock two to three years ago, but were now taking a more “orderly” approach.

Mr Autore said his company had also established retail outlets in Japan, Spain, the UK and Sydney, and was in negotiations to open a further five outlets.

He said the new outlets were joint ventures established in partnership with existing wholesale clients.

“Long term we felt we needed a much better knowledge of the market in different countries,” he said.

Pearl Producers Association executive officer Brett McCallum said the industry was also reviewing the lack of a standard grading and certification systems, which could help to establish the quality premium on Australian pearls.