This excerpt taken from the LKI 10-K filed Aug 29, 2007.
Marketing, Sales and Distribution
The Companys sales strategy is directed primarily toward quality conscious consumers throughout the United States, South America, the Far East, the Middle East and Europe. The Company focuses its distribution efforts for Lazare Diamonds on selectivity with a view to helping retailers who carry the product maintain a competitive advantage. Lazare Diamonds can be found at some of the most prestigious jewelry stores around the world, including both those with international reputations and those recognized only in their local communities as being the highest quality retail jewelers. This strategy helps ensure that the Companys product is presented in an environment consistent with its superior quality and image.
The Company also sells to certain jewelry manufacturers and diamond wholesalers. The Company has developed a comprehensive grading system for its diamonds which, when coupled with the ideal cut standard, allows jewelers to order inventory by category rather than through the more cumbersome process of visual selection. In addition, the Company designs, manufactures (through independent contractors) and sells a line of high quality jewelry that features Lazare Diamonds.
A key element of the Companys strategy is the promotion of the Lazare Diamond brand name directly to consumers. The Company is able to market its diamonds under a brand name to retailers because (a) the ideal cut differentiates the Companys diamonds from commercial diamonds in the marketplace and (b) each Lazare Diamond is inscribed with the Companys logo and identification number using the Companys patented laser inscription process, thus authenticating the diamonds. The Company holds domestic and various international patents for this process. In addition, in March 2006 an additional U.S. patent was issued to the Company relating to microinscribed gemstones. The Company has additional domestic and international patents-pending.
The Companys decision to pursue the brand name strategy is reinforced by two factors - a rising trend among informed consumers to purchase quality, brand name products, and the need among upscale jewelers to set themselves apart in an increasingly competitive market by carrying and promoting a highly differentiated product.
Building awareness and acceptance of the Lazare Diamond brand name is accomplished through a comprehensive marketing program which includes sales training, cooperative advertising, sales promotion and public relations. A wide assortment of sales promotion materials has been designed to facilitate jewelers sales of the Companys diamonds and fine jewelry line to consumers. Public relations events are offered which help build traffic in retail stores. The Company has a program to build both free standing and in-counter boutiques in the stores of a select group of its retail clients. The Company believes these marketing programs have been and will continue to be instrumental in increasing sales. The Company intends to continue concentrating its Lazare Diamond® marketing efforts towards the quality retail jeweler.
The Lazare Diamond Registry program has been established by the Company to enable consumers to register their Lazare Diamonds with the Company using the laser inscribed identification number, thereby providing proof of ownership in case of loss or theft.
The Company markets high quality commercial cut diamonds and diamond jewelry through its worldwide distribution network to wholesalers, jewelry manufacturers, distributors and retailer jewelers.
In addition, Bellataire® diamonds and jewelry are marketed through upscale retailers and select distributors throughout the world. Bellataire diamonds are all-natural diamonds that have been restored to their intrinsic beauty through a patented high pressure, high temperature (HPHT) process that improves the color of a limited group of gem diamonds.
The Company has developed its own E-commerce site (www.lazarediamonds.com). This site directly links the Company to its retailers, which serves to further strengthen the ties with its retail client base.