1. www.gold.org Why Gold Jewellery Needs Marketing Dubai City Of Gold Conference February 2005 Private and Confidential: © WGC 2005

2. 2 The mainstay of gold demand has been under pressure Source: GFMS, WGC

3. 3 * Value definitions vary across sectors Source: WGC, JM, Company reports, analyst estimates The gold jewellery market is significant in value

4. 4 Marketing investment in gold has been weak and volatile  Under-supported compared to competition  Gold spends 0.1% of sales, luxury goods spend 11%  Supported as a category by WGC members and retailers  Marketing was not fact-based  Lack of integrated message and category leadership  Marketing focused on product rather than “why buy gold?”

5. 5 Source:WGC Gold was losing share of wallet in most markets

6. 6 Understanding the reasons can make a difference In depth consumer research and segmentation analysis in all gold’s main markets showed….  Reduced contemporary relevance to consumers  Relatively low consumer marketing investment  Increased competitive activity and choice  Lack of “why buy gold?” proposition  Inconsistent consumer messages  Poor quality retail environments  Lack of reasons and occasions to purchase  Lack of innovative product The main drivers of consumer attitudes and purchasing of gold jewellery are consistent worldwide

7. 7 Major reason for wearing gold jewellery is “feel good” factor Source: WGC Research

8. 8 Saudi Arabia Main discretionary reasons for not buying gold jewellery are lack of relative desirability and occasions to purchase Source: WGC Research

9. 9 Main competitors to gold are not other jewellery categories How would you spend $500 (or equivalent)? Source: WGC Research 53 34 15 12 8 5 5 5 5 4 4 3 2 1 5 Gold jewellery Fine fragrances Weekend away Eating out in a good restaurant Personal electronic items Designer fashion accessories Consumer durables Fine Leather goods Education Imitation jewellery Diamond jewellery Investment Silver jewellery Beauty/Spa treatments Other Platinum jewellery Land None, I would save it Saudi Arabia %

10. 10 Value Relevance Aspiration Emotional Negatives Usage Occasions INDIA BRAND EQUITY RESULTS 2004: Gold sees a significant increase on nearly every statement: WGC advertising has had a positive effect on rejuvenating the brand image. Here are some some statements people have made about luxury goods. For each one please indicate to which product or products the statement applies. Source: IPSOS Brand Equity tracking survey Marketing can have an effect even in mature markets

11. 11 Gold competitors…….leisure, indulgence

12. 12 Gold competitors…….electronics and accessories

13. 13 Gold competitors…….lifestyle brands

14. 14 New interest in gold by luxury brands

15. 15 Why does gold jewellery need marketing?  Without action, share and volume erosion  No other source of demand will fill the gap  Potential loss of consumer confidence  Additional jewellery demand will not compensate for any possible price reduction  Weaker investment demand  Further share loss to more desirable competition in both jewellery and investment  Basic rule of premium marketing = demand (even if latent) must exceed supply

16. 16 Driving gold jewellery demand is the only solution  Jewellery = 80% of the gold market - we can influence it  Address the loss of share in our primary markets  We must improve gold’s desirability c.f. competition  WGC can and will drive this: initial results are very positive  Positive jewellery demand supports investment demand  We must be more consumer focused  Industry needs to collaborate more and drive consumer demand for gold jewellery  Requires longer-term strategic and financial commitment

17. 17 What’s the WGC doing about it?  Fact-based, consumer-focused marketing  Driving consumer desirability of the gold jewellery category  Consumer marketing programs under common “umbrella”  Focus on main markets  Marketing tie-ups with key strategic partners (esp. retailers)  Links into partner operations (product, POS, training) as well as advertising  Clearly defined measures of success  Proven commercial success with key partners  Roll-out to additional partners and markets

18. 18 The Marketing Platform for Gold: what’s new?  “Speak gold”..a unique proposition for gold: a universal truth based on gold’s role in life, supported by consumer research  Integrates at multiple levels with partners across all media  Flexible and has longevity  Highly measurable  Desirable, contemporary, relevant and aspirational  Provides strong emotional “hook” to balance gold’s role as store of value  Call to action to specific consumers: drives reasons and occasions to purchase

23. 23 Is it working?

24. 24 Middle East region as priority market for gold  World’s highest per capita sales (6.5 x world average)  2004 demand = 535 tonnes, +10% in volume, +24% in value  Strong affinity for high carat gold jewellery  Purchase motivations similar across region  Large emerging youth market (50% < 18yrs)  Strong, high quality regional jewellery trade  Dubai City of Gold: hub for region  WGC plan 75% increase in marketing spend for 2005

25. 25 Worldwide results have been encouraging  2004 jewellery demand + 6% in tonnes, +19% in $ value  Demand up in all key markets (despite price increase)  Positive results from WGC marketing programmes, e.g.  Retail transformation in USA  K-Gold in China  Gold brand image improvements in India  Dubai City of Gold  Product innovation in Italy  Marketing support for gold remains under-funded  Gold sales still need to recover to former levels We are making progress, but gold marketing still requires more support from the industry

26. www.gold.org Why Gold Jewellery Needs Marketing Dubai Gold Conference February 2005 Private and Confidential: © WGC 2005