Is there actually such a thing as an "Islamic Brand"? If yes, is it an opportunity for marketers or is it just another fad? On the other hand is it just a misnomer? I answer these from a marketer's perspective in the July 2014 issue of Islamic Banker Asia.

1. CHANGING PERSPECTIVE
48 / Islamic Banker ASIA / Issue 07 2014
ISLAMICBRANDING
–MISNOMEROR
EARNEST
OPPORTUNITY?
BY JOY ABDULLAH
“Islamic Branding is “branding” that’s empathetic to
Shari’a values, ranging from basic Shari’a friendliness
to full Shari’a compliance in all aspects of a brand’s
identity, behaviour and communications, in order to
appeal to the Muslim consumer.”
– Ogilvy Noor
THE TERM “ISLAMIC BRANDING” stems from
the tendency of the marketing and advertising
industry’s practice of consumer segmentation
based on certain ‘ethnic’ parameters. On the
other hand, does the ‘Halal’ stamp signify
Islamic branding? The term Halal is recognised
as a brand component as well as the platform
for a brand’s identity. As a brand component,
it communicates adherence to supply and
production parameters for example in food
- flagging the hygiene factor by re-assuring
adherence to the slaughter process. As a platform,
the term ‘Halal’ is used to ‘flag’ that the brand
is for the Muslim community. Halal branding
is used as part of an offensive (penetrating) or
defensive (adhering to) strategy in order to satisfy
the community’s standardisation requirement. In
a nutshell, an Islamic Brand is one that:
i. Is empathetic to the values of Islam and adheres
to all aspects of Shari’a in its identity.
ii. A brand that has the required ‘Halal’
credentials.
iii. Probably a brand who’s primary market is the
global Muslim community.
Islamic BankerASIA
Islamic BankerASIA
Islamic BankerASIA
Islamic BankerASIA
Islamic BankerASIA
Islamic BankerASIA
Islamic BankerASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA

2. PHOTOCOURTESYOFAL-BARAKAH
Issue 07 2014 / Islamic Banker ASIA / 49
So is it a misnomer or serious
opportunity?
To a certain extent this labelling is a bit of a
misnomer. The global Muslim community has
been using mainstream brands in the past and
still use it now. So a segmental approach with
this kind of labelling will put a brand into a
fixed spot. It is, however, a serious opportunity
for a brand interested in developing business
within the global Muslim community. The sheer
numbers and growth of this segment make it an
opportunity for all industries.
What does it means by
Muslim markets?
Outside of the OIC countries, the reference
to Muslim markets predominantly means
geographical locations with concentrated Muslim
populations. Thus there is a need to understand
the ‘Global Muslim Population’. Some of the
highlights are:
l 80% of Global Muslims live in Asia & MENA
l Largest Muslims populations living as
minorities are in Russia (16 million) &
Germany (4 million)
l 2/3rd of the population lives in 10 countries of
By 2050, it is predicted
that more than 50% of
the world’s population
will be Muslim.
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
er

3. CHANGING PERSPECTIVE I ISLAMIC BRANDING - MISNOMER OR EARNEST OPPORTUNITY?
50 / Islamic Banker ASIA / Issue 07 2014
which, 6 are in Asia: Indonesia, Pakistan,
India, Bangladesh, Iran and Turkey.
l By 2050, it is predicted that more than 50%
of the world’s population will be Muslim.
l 52% of the Muslim community are under
24 years old and part of the “Gen C”–
Connected Generation”.
l Exerting enormous socio-cultural influence
from being digitally connected. This cultural
influence will increase in years to come.
l Young Muslims are already starting to stamp
their influence on the consumption habits of
the wider global Muslim community.
l Muslims are undergoing a major re-assessment
of their relationships with religious structures,
cultural assumptions, authority,
and the emerging, young Muslim consumer
is fundamentally different because of a strong
reliance on the ethical values of Islam.
Though the global Muslim population is often
cited as a ‘global community’, it actually is not
a homogenous market segment that can be
qualified by one primary differentiator - age,
language or skin colour, or through attitudes
and behaviour that are in accordance to that
differentiator. Unlike other cultural consumer
segments the global Muslim consumer segment
is made up of a myriad of socio cultural sets
that have been influenced by emigration and
adaptation to social and environmental norms
of current place of residence and livelihood. This
‘adaptation’ has brought about today’s Muslim
consumer who has a strong, unique, individual
value system and identity that is based and
governed by the values of Islam. Muslims’ own
belief in the significance of Islam in their lives is
pervasive.
What are the challenges of engaging
Muslims in a multicultural global world?
How can these challenges be overcome
and how banks are able build customer
loyalty?
At a macro level, in Islamic Banking and Finance,
there is an acute need of understanding and
engaging with the consumer:
1. Need for change in the business
model Business methodology has a changed a
lot today. Earlier we had B2B and B2C, models
where business strategy was based on profitability
only and people doing the business were not
taken into account for example; two people
interacting for business was either taken as two
business entities or it was a organisation pushing
products to a consumer. The socio-economic
conditions coupled with the rise of social media
in the past five years have brought about changes
in consumer behaviour.
2. Understand the consumer The person
representing the organisation and the consumer
are human beings. This brings into play a
very important aspect—emotions! Human
beings, psychologically, are emotional beings.
Thus when two people are interacting, be it
for two organisations, or from an organisation
to a consumer or the other way around, their
perceptions, behaviour, cultural background
all play a very significant role in the way they
approach the buying decision, the way they
interact with the brand and the way the brand is
able to engage them.
Today the consumer is:
i. Wary of Token-ism: The Muslim consumer is
particularly wary of token-ism that still continues
to masquerade in markets by brands as the
engagement strategy. Stamping products as Halal
or Shari’a compliant is not enough.
Young Muslims are
already starting to stamp
their influence on the
consumption habits
of the wider global
Muslim community.
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA

4. PHOTOCOURTESYOFAL-BARAKAH
Issue 07 2014 / Islamic Banker ASIA / 51
ii. This consumer is very interested in the
authority and provenance of brands and the
companies behind them.
So, how can we overcome these
challenges and how are banks able to
build customer loyalty?
To overcome these challenges is not an easy task.
Banking business, the way it is operating, has
been in operation historically. Banking models
are all risk-shifting and early profit oriented
for example, in the initial years of a loan the
interest or cost of money is recovered first and the
principle is recovered in the later years. Within
this model and by adding shari’a compliance,
you will have the base framework within which
Islamic Banking operates. However, nowhere in
this model there is a focus on:
1. Values (of the organisation) and value
proposition (to the community it operates in)
2. Purpose (to the community it operates in)
3. People (both the employees and the community)
Consumer behaviour has changed significantly.
With rising education, disposable income, social
media connectivity, the clamour for transparency
(of organisations’ operations) has been on the
rise. There is now a clear need of developing
trust through delivery of perceived value, coming
through loud and clear. In order to overcome the
challenges, the Islamic banking industry has to
review its business model and evaluate if the same
model is still viable. Undeniably, it’s prudent to
keep in mind that over 80% of Islamic finance
and banking is in corporate finance and retail
globally has really not made a dent in comparison
to what their counterparts as conventional
banking has.
At the same time, within the overall Islamic
finance industry, the Takaful industry is still
languishing in comparison to its conventional
counterpart. From a sustainability perspective,
this business model needs to be reviewed
as without a primary focus on the 3 points
mentioned earlier and a clearly identified value
proposition, engaging the community i.(the people with
which the banks do business) (be it corporate or retail) would
be tough. From the consumers perspective, the choices
available are all the same and therefore selecting a bank brand
to do business are governed by factors like ease of access,
online facilities and to some extent for some product sub-
categories the terms of loans.
So, what can we learn from the development
of the Islamic finance industry, and where
next for this sector - what trends will shape
the industry?
Islamic Finance has come a long way. Today the conventional
finance industry is extremely interested in Islamic Finance,
given the systemic and continuous shocks that the financial
system has been having. With more and more discussion on
Islamic finance, coupled with the growth of the industry in
Malaysia, the overall framework is one that is being looked
about and discussed.
Highly developed and matured markets such as London are
in the process of implementing regulatory, educational and
processes that would help them gain a piece of the action.
Simultaneously there are emerging markets across Asia
and Africa that are actively looking at the Islamic finance
framework all the way from an economic monetary policy
downwards.
The hot brick at the moment is the focus of UAE
in getting Dubai to be accepted as a ‘centre’ for Islamic
economy. In terms of trends, we can clearly see the push from
consumers asking for more transparency from the banking
industry in terms of the products being offered, cost of those
products, and clarifications on how funds are utilised.IBA
With rising education,
disposable income, social
media connectivity, the
clamour for transparency
(of organisations’ operations)
has been on the rise.
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA
IslamicBanker
ASIA