Challenges face “Made in Italy” branding


Challenges face “Made in Italy” branding

By Coleby Nicholson

VICENZA, Italy, May 2010 – There is no doubt that when it comes to inspirational and innovative jewellery design it’s hard to surpass the Italians. With an industry that goes back centuries, the craftsmanship of Italian jewellery, particularly gold jewellery, has always led the world.
Vicenza Charm 2010
Picture: Fiera di Vicenza
But over recent years the Italians have had to deal with the ever-increasing competition from China and the rising price of gold. Just as they were starting to get a clear picture on what the future might hold, along came the global financial crisis (GFC).
The GFC’s impact on Italy has been particularly ravaging and for the Italian artisans the question remains: How do we recapture the market?

The Italians believe a ‘Made in Italy’ brand will be a way forward to differentiate quality-made product from the cheaper, imported product from Asia, particularly China.
Luciano Bigazzi, co-ordinator of Europe’s national jewellery consultation office, believes that all European product needs to be defended.

“We need to promote the quality of European design and explain that quality has a certain cost and price. We aim to stress the fact that imported product from third countries (Asian) has different costs,” Bigazzi said.
Speaking at a press conference on the first day of Vicenzaoro, the Vicenza jewellery fair, Bigazzi said, “It is our commitment to therefore develop a quality brand called Made In … ,” he explained.
Vicenza Charm 2010
Picture: Fiera di Vicenza
Bigazzi does not finish the “Made In” statement with “Italy” because his role encompasses all of the European Union, and therein lies the complexities of developing an overarching strategy to fend off imported products in one particular category for one particular country.
Bigazzi is quick to explain that he and his organisation are not against imports. It’s just that he wants a more level playing field.

“We are keen to honour, improve and develop exchange (trade) between the European Union and the U.S., China and India.
“We are certainly not against imported product,” Bigazzi said, adding, “We believe (international) trade is a very important resource.”

In reality, downturns like the GFC come and go. They are short-term and although there are signs of a recovery, there is still a long way to go.
The Vicenza fair organisers issued an Economic Outlook Report which stated, “The first months of 2010 manifested faint signals of change, but still too weak and, above all, too intermittent, to be defined as a recovery.”
Vicenza Charm 2010
Picture: Fiera di Vicenza
And although sales had risen, the industry easily explains this away as being affected by the rising gold price.
Regardless of these issues, deep down the Italians know that the GFC will eventually end. History will show, as it always does with economic downturns, that it was a mere blip on the radar.
Likewise, the gold price will retreat, one day!

However, the more important issue, in fact the only issue, for the Italian jewellery industry is how to reinvigorate a once great brand. Whilst history shows economic blips come and go, it also shows that some brands come and go, and never come back again!
During periods of enormous cultural and economic shift, things slip through the cracks, and Italy wants, or needs, to ensure that Italian-made jewellery is not one such casualty.
Enter ‘Made In Italy’ jewellery – a strategy that is simple and effective, but implementing it is far from simple.

In fact, Bigazzi describes his task as complex and he’s correct when he says, “There are millions of people all over the world who are interested in quality European jewellery. It’s our duty to promote this development so that more markets can be opened for our quality European product.”
But Italy is caught between a rock and hard place: it has to deal with the competitive Chinese juggernaut and, when Italy shows it can compete, its export product is often hit with restrictive trade duties.
Vicenza Charm 2010
Picture: Fiera di Vicenza

On the one hand duties are imposed on Italian-made jewellery and when the price of gold increases, the duty increases, making the product even more uncompetitive when compared to the locally made product.
How can a country deal with such an issue? It is expected to compete in a globalised world and yet it is punished with import duties when it does!

This is another issue that can, over time, be negotiated away between governments, and in a few years’ time that problem may also be viewed as another small blip on a chart.
But the overriding issue is the brand. Italian-made jewellery must, once again, be a definitive statement, one that cannot be surpassed.
Bigazzi’s model for this is to have two “Made In …” brands; “Made in European Union” and a “Made In …” brand that is attributed to one EU country, such as Italy.

Many countries have attempted a “Made In” strategy only to discover that is not as easy as it sounds. What about all the raw material and the parts of the whole for example? And how do you deal with a product that is made-up of many parts not manufactured in the country but the final product is?
These issues are just the beginning.

Once these issues are overcome, and once there is an agreement across many countries in the EU, then there is the not-insignificant matter of deciding what companies can use the “Made In Italy” brand.
It should become an instrument for Intellectual Property that must be jealously guarded – afterall, not every Tom, Dick or Harry (or Tommaso, Dario or Enrico) should be able to use the brand!
Vicenza Charm 2010
Picture: Fiera di Vicenza
The Economic Outlook Report identifies a number of issues if Brand Italy is to be reinvigorated.
Companies must make a qualitative leap in terms of their own brand strategy, for example.
“The companies that were able to pass from unbranded production to a brand name identity – within which they successfully inserted values, positioning, image, communications and consistent commercial distribution policies – were better-prepared to deal with market difficulties …” the report explained.

Therein lies another level of complexity; already struggling jewellery manufactures must have the financial wherewithal to make the necessary (large) investment to build a brand before they can make effective use of an upcoming “Made In Italy” brand that, in turn, fits within a much larger “Made in European Union” brand.

Many manufacturers still confuse a “label” with a “brand”, the latter requiring a large investment in marketing and advertising, something struggling jewellers can ill afford.
Bigazzi was correct again when he stated, “It’s not simple at all, it’s very complex.”
But he is also adamant that consumers want to know where their products come from so they can be assured of the quality, and therefore, jewellery with the imprimatur “Made In Italy”, will be successful.

There’s a long way to go on this journey, but given that Italian jewellery is said to date back 3,000 years, perhaps the time it takes to reinvigorate the jewellery industry by developing and implementing “Brand Italy”, may also prove to be a small blip on a long and inspiring history chart.
If the economics are not necessarily on the side of the Italians right now, time is. After all, they’re a resourceful lot.


Coleby Nicholson is publisher of Jeweller magazine. He has covered the jewelley industry for more than a decade and specialises in business to business aspects of the industry.
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