Islamic Branding and Marketing

Creating A Global Islamic Business

Paul Temporal

• Publisher: Wiley
• Year: 2011
• ISBN:
  9780470828489
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Marketing internacional

Islamic Branding and Marketing: Creating A Global Islamic Business provides a complete guide to building brands in the largest consumer market in the world. The global Muslim market is now approximately 23 percent of the world's population, and is projected to grow by about 35 percent in the next 20 years. If current trends continue, there are expected to be 2.2 billion Muslims in 2030 that will make up 26.4 percent of the world's total projected population of 8.3 billion.

As companies currently compete for the markets of China and India, few have realized the global Muslim market represents potentially larger opportunities. Author Paul Temporal explains how to develop and manage brands and businesses for the fast-growing Muslim market through sophisticated strategies that will ensure sustainable value, and addresses issues such as:

• How is the global Muslim market structured?
• What opportunities are there in Islamic brand categories, including the digital world?
• What strategies should non-Muslim companies adopt in Muslim countries?

More than 30 case studies illustrate practical applications of the topics covered, including Brunei Halal Brand, Godiva Chocolatier, Johor Corporations, Nestle, Unilever, Fulla, Muxlim Inc, and more.

Whether you are in control of an established company, starting up a new one, or have responsibility for a brand within an Islamic country looking for growth, Islamic Branding and Marketing is an indispensable resource that will help build, improve and secure brand equity and value for your company.

Chapter 1

Introduction

Islam: The Religion and the Brand

Islam has a huge following, as befits a religion that is around 14 centuries old. Islam is based on a belief in one God, Allah. The primary sources of Islamic law that believers follow are the Qur’an, a book believed to have been given by Allah to the Prophet Muhammad, and the Sunnah, a body of Islamic law based on the Prophet Muhammad’s words and deeds. Followers of Islam are known as Muslims. The word “Muslim” means “those who accept and submit to the will of God.”

Islam, as with any other well-known name, has an image. It can be considered to be a brand in its own right, with its own brand image; and like any global brand, this image is viewed differently by different people in different places. However, Islam is a very complex brand, and the differences in religious affiliation to Islam enhance this complexity; for example, the Sunni and Shia sects interpret some of the principles of Islam in different ways. And Islam, like any brand, may be perceived either positively or negatively. When left uncontrolled or unmanaged, such positive and negative perceptions will affect attitudes toward the brand.

For instance, in the West, some negative connotations of the word “Islam” stem principally from associations with extremist forms of behavior. While the purpose of this book is not to look at this issue, the lack of education and understanding about the religion is one reason for such perceptual differences, and this affects the acceptability of Islamic businesses globally if they choose to use their religious affiliation as a part of their brand identity. But if we take a broader view, we can see another reason for concern about Islamic businesses: that in any areas of the world where poverty is rife, more extremes of behavior occur, and this is so in the Muslim world. The fact that the majority of Muslims come from poor backgrounds can and does impact the image of Islam.

From a marketing perspective, the fact that some Muslim markets are poorer than others needs to be borne in mind by Western companies keen to offer products and services to those markets. In the next chapter, we will look at how marketers can improve their understanding and decision making in this regard.

Adding to the complexity with respect to Islam and Muslim markets is the impact of the culture of each country, whether it contains a Muslim-majority or minority population, on the behavior of Muslim companies and consumers. Culture impacts how people view the religion, and how strongly they express their beliefs. For example, Turkey is Muslim but very secular, while Iran falls more toward the other end of the religious conformity scale. Governments, businesses, and consumers in these two countries act in very different ways.

Another misperception in many people’s minds is the strong association of Islam and Muslim markets with Arabian countries. In fact, the Middle East countries don’t make up the majority of the global Muslim population, as we shall see in Chapter 2 when we look at the latest figures available for Muslim populations.

All of the above facts mean that any marketer or brand manager, whether from a Muslim or a non-Muslim company, must try to understand the structure and behavior of these markets if they are to be successful in doing business in them. But before I move on to discuss Muslim markets in detail, I would like to address a question that is uppermost in many people’s minds.

Is Islamic Branding a Myth or a Reality?

This is an interesting question, and it is one that I was required to address in public at the 6th World Islamic Economic Forum, 2010, held in Kuala Lumpur.

My answer to the question is that Islamic branding is a reality and not a myth. My reason for stating this is that there are substantial markets that want products, services, brands, and communications that are Shariah compliant, or demonstrate that they understand Islamic values and principles and are prepared to become Shariah friendly. Muslims the world over look for what is “halal,” as opposed to what is “haram,” and so there is substantial demand for halal or Shariah-compliant products and services. The Muslim population represents around 23 percent of the world’s population and thus is a significant market. While this huge market is not homogeneous in behavior, it is—as we shall see later—bound by certain values that all Muslims share.

This fact raises related questions, such as: “Is it worthwhile or proper to carry out branding based on religion?” and “Is it a good thing to discriminate in branding on the basis of religion?” The most important thing that marketers need to bear in mind is that Islam is a way of life. The values and principles of Islam are taken much more seriously in terms of influencing the everyday way of life of Muslims than are the values and principles of other religions. In other words, from a marketing perspective, we are dealing with a huge number of people who have shared values, and therefore who share similar wants and needs, and branding is all about addressing consumers’ shared values, wants, and needs.

The major difference between other religions and Islam is that the practice of Islam influences all Muslims to a larger or lesser extent on an everyday basis, and this means that brand owners and marketers who wish to gain a strong foothold in a market of 1.57 billion people must cater to their needs—and with Islam, this means Islamic values, principles, and practices. This indisputable fact brings up the question of what information is available to assist marketers in understanding Islamic markets, because not all Muslims behave as one homogeneous group and there are many Muslim markets that vary in size and behavior.

Until very recently, there has been little data available to help with such understanding, but recent studies do give an insight into some of the questions marketers are asking, particularly about where Muslim populations are located and what size they are. A summary of some of this recent work will be provided in Chapter 3. However, having an understanding of the global spread of the Muslim population, and of the size of that population in various countries, doesn’t give marketers enough information, on its own, to enable them to create and manage their brands properly. Questions about how Muslim populations can be reached, and how their behavior differs or remains similar from place to place, remain largely unanswered, and much more work remain to be done to gain a proper understanding of consumer behavior in Muslim-majority and minority markets. Fortunately, some major research is now being carried out to elicit more information on these issues, as will be seen later in the book.

Despite the differences in Muslim markets around the world, we can safely say that Islam has certain principles and values upon which business is based, and these are briefly discussed below.

The Five Pillars of Islam

Islam is what is called a monotheistic faith; that is, it is based on the belief that there is only one God. As an Abrahamic-based religion, Islam—as opposed to, say, Christianity—makes no allowance for the plurality of God.

The most important Muslim practices are the Five Pillars of Islam, the five obligations that every Muslim must satisfy in order to live a good and responsible life, according to Islam. The Five Pillars of Islam consist of:

1. Shahadah: a declaration of faith that there is no god but God, and that the Prophet Muhammad is the messenger of God.

2. Salat: an obligation to perform ritual prayers five times every day in the proper way.

3. Zakat: a regular (usually annual) welfare contribution to the poor in society.

4. Sawm: the observation of fasting during the holy month of Ramadan.

5. Hajj: the undertaking of a pilgrimage journey to Mecca, at least once in a person’s lifetime (if that person has the means and is physically able to do so).

Carrying out these obligations provides the framework of a Muslim’s life, and weaves his or her everyday activities and beliefs into a single cloth of religious devotion. No matter how sincerely a person may believe, Islam regards it as pointless to live life without putting that faith into action and practice, and so it ensures that it is a way of life if practised properly. When duly carried out, the Five Pillars demonstrate that Muslims put their faith first, and do not just try to fit it in around their secular lives.1

This is an important fact for marketers to bear in mind: that, for most Muslims, Islam is not just a component or part of one’s life; it is a way of life.

The Principles of Islamic Trade and Commerce

Islamic Law

If Islam is a way of life, then it could be liberally described as a lifestyle as well as a religion. The Islamic system of governance is based on Shariah, or Islamic law. In Arabic, Shariah means “the clear, well-trodden path to water,” and is regarded by Muslims as God’s guide to human behavior. Life is a journey that presents to everyone many paths, but only one of those paths is clear and straight, and this path is called the Shariah. Shariah law comes from a combination of sources, including the Qur’an (the Muslim holy book), the Hadith (the sayings and conduct of the Prophet Muhammad), and fatwas (the rulings of Islamic scholars).

Shariah deals with legal aspects of day-to-day life, including politics, economics, banking, business, contracts, family law, sexuality, and social issues. Doing business professionally, and holding fast to the values of truth, honesty, and trustworthiness, is the Shariah way. As all forms of social, economic, and political activities are governed by Shariah law, thus branding and marketing activities should also fall under Shariah law.

However, world trade, including trade with and between Islamic countries and companies, has largely been conducted under globally accepted laws and customs, and it is only in the last 30 years or so that a notable increase has been seen in trade and commerce of a truly Islamic nature, such as Islamic finance. Islamic law has often been perceived in a negative light by those Western observers who associate Islam with negative attributes, but legally it is now a system of law that is recognized throughout the world.

Islamic Economics

The underlying economic concepts behind Islamic business are fairly straightforward. Islamic economics aims to achieve the state of human falah by organizing the resources of the earth based on cooperation and participation. The word “falah” means to thrive, be happy, and be successful; and in the Islamic economic sense, it refers to being successful in this world as well as the hereafter, and so has macro- and micro-level implications for spiritual, economic, cultural, and political issues.

In focusing on the economic conditions of falah, the following must be fulfilled in order to achieve it:

• Infaq: Spending on others and meeting the social needs of the community from only part of one’s total possessions.
  • Giving zakat (a financial levy on surplus wealth) to the poor and needy is compulsory, and is seen as an act of purifying one’s wealth.
  • However, there is no compulsion to spend all of one’s wealth.
• Prohibition of riba: Interest on capital is seen as perpetrating exploitation and inequity.
  • Islamic finance is a growing industry that is increasingly being seen as a viable alternative to the conventional financial system.
  • Some argue that the current Islamic finance system still has a strong profit motive and is a mere mirror-image of the conventional system.
• Fulfillment of covenants and trusts: Meeting all of one’s social and religious obligations, including to the environment.
  • When extended to corporations, this strongly correlates to corporate social responsibility, where they are answerable to the society at large, and not just to their shareholders.
  • Justice: Lawfully acquired wealth must be protected to avoid inequality, impaired incentives, and social waste.
  • Personal property rights of all people are safeguarded, irrespective of their race or religion.
• Enterprise: Productive economic activity contributes to the falah of society and the individual.
  • The Qur’an exhorts man to “seek the bounty of God.”
  • The Prophet’s statements urge people to work and earn their livelihood, and condemn idleness and beggary.
  • Overall, mankind’s spirit of endeavor is encouraged as long as it is for lawful and wholesome purposes.

Cultural conditi...