Islamic Marketing: More Than a Buzzword?

By: David Tiltman

Islamic branding has become one of the marketing industry’s favourite subjects in 2010. So the Saïd Business School’s Oxford Global Islamic Branding and Marketing Forum was certainly well-timed.

The two-day conference had to deal with some weighty themes. What is a ‘Muslim consumer’? Do common ambitions and desires exist across the Muslim world? In what way do religious requirements and consumer desires overlap, and how should companies respond?

In response, several themes cropped up consistently. The first was the size of the prize. Although data on the global Muslim market is scarce, there are certain figures that are regularly repeated. There are 1.57 billion Muslims globally; 62% live in Asia, and 20% in the Middle East and North Africa. By 2050 there will be 2.6 billion Muslims globally, and over 60% of the global population under 18 will be Muslim.

KEY TO ‘NEXT 11’ GROWTH

As Miles Young, worldwide ceo of Ogilvy & Mather, pointed out, these consumers sit at the heart of most multinational companies’ expansion plans. Multinationals have spent several years focusing on the BRIC markets, none of which has a Muslim majority (though India has a very large minority). Their attention is now shifting to what is known as the ‘next 11’, the economies tipped for rapid growth, and in these Islam is much more widespread (they include Muslim-majority markets such as Turkey, Iran, Egypt, Indonesia, Pakistan and Bangladesh). At the same time, as those economies grow, there are opportunities for local brands to expand into overseas markets.

Miles Young

Young’s keynote speech followed the release of a survey by his agency’s new Islamic branding practice, Ogilvy Noor, into Muslim consumers and the appeal of big brands to them. He insisted that the role Islam plays in the everyday lives of its followers makes Islamic marketing “qualitatively different” to grey marketing or pink marketing.

Ogilvy’s study segmented Muslim consumers into six groups, based on the role Islam plays in the way they conduct their lives. Three of these segments were combined to form what Ogilvy terms ‘futurists’. Accounting for about 40% of the total, these are younger than average and want to be part of global consumer culture but not so it compromises Islamic identity. This group is key for multinational brands.

OVERLAP WITH GREEN MARKETING

The key trait brands need to display in targeting these consumers is sincerity of intention. That means a company has to be able to demonstrate it is committed across the organisation to meeting the needs of Muslim consumers. And here it is important to note that there is a difference between Shariah-compliance (ticking the legal and procedural boxes that makes a product suitable for Muslims to buy) and being inspired by the values of Shariah.

The latter approach embraces themes such as nutrition, fair-trade, CSR and green credentials. Indeed, another recurring theme of the conference was the potential overlap between Islamic branding and more mainstream green or ethical marketing. Tan Sri Nor Mohamed Yakcop, a minister in the Malaysian prime minister’s department, cited McDonald’s as a company that had moved beyond following only the legal requirements of halal in Malaysia to investing in healthy alternatives and publishing nutritional details about items on its menu. He added: “Focusing on developing a value proposition for non-Muslims could help serve Muslim consumers.”

A further theme of the conference was that brands targeting Muslim consumers cannot compromise on quality. They need to be as good as other brands in the market, otherwise they will fail.

This has certainly been the lesson of the Islamic finance industry, which now holds $750 billion of assets worldwide and has been growing quickly. Nor Mohamed said that one of the lessons of Islamic finance is that it is “not enough to supply Shariah-compliant alternatives”. Those alternatives must not come at a prohibitive cost and should be competitive to non-compliant products.

BUILDING HALAL BRANDS

Halal food and drink is an industry tipped for rapid growth. Nestlé, widely cited as a case study in adapting its products and corporate strategy to become Shariah-friendly, made $5.2 billion in 2008 out of halal products. However, the halal industry remains hugely fragmented, following different standards around the world.

In a conference heavy on theory but light on real-life case studies, a talk on the creation of a halal brand provided a rare example. In 2004 the government of Brunei set up a joint venture called Ghanim Food Corporation to develop a halal food brand. The Corporation works with local companies to meet global standards, and has developed a consumer brand, bruneihalal, for these products. The bruneihalal brand has been promoted via TV advertising and is displayed prominently on packaging.

Ghanim has two opportunities moving forward. The first is to work with overseas food manufacturers to develop halal goods under the bruneihalal brand. The second is to begin supplying retail outlets in other markets with bruneihalal products. The brand’s strength is that it is backed by a Muslim government and tested strictly to standards that should be acceptable to Muslims worldwide. The company has begun looking at exporting goods to lucrative markets such as the UK as it expands.

WHAT IS A MUSLIM BRAND?

The conference was not without its flashpoints, and one of these came during a panel featuring, among others, Roy Haddad, chairman and ceo of JWT Middle East and North Africa. He presented research into Muslim consumers in key Middle East markets that identified five different groups of Muslims that advertisers could target, and showed that many assumptions about consumers in the Middle East were flawed (for example, the data showed how important respect for individual opinions and expression was across the region).

Haddad agreed that there was huge scope for “brands that connect with our values”, and criticised brands that address Muslims only during Ramadan.

However, he also argued that local brands in Muslim markets would find it difficult to build scale in the manner of a company like Procter & Gamble without being led by consumer insight. Simply developing a ‘brand for Muslims’ was not enough without following consumer trends. Some of his fellow speakers had a different view, arguing that an Islamic brand should begin from Islamic principles.

Some of these tensions resurfaced during a panel featuring Shaukat Aziz, former president of Pakistan. He praised what he referred to as “mainstreaming” – brands built with an Islamic audience in mind that have mainstream appeal. He cited UK fast-food chain Chicken Cottage, which serves halal food, and airline Emirates.

However, the example of Emirates offered a final point of controversy, as it serves alcohol on-board. Some audience members felt that, although the progress of Emirates was to be welcomed, a Muslim brand should not be engaged in the selling of alcohol.

If these debates showed anything, it is that trying to package up ‘Islamic marketing’ into a single set of rules or assumptions is flawed. The subject covers such varied topics as the role of multinationals in the developing world, the rise of a consumer class in those markets and the opportunities for local brands to build scale overseas, as well as the changing needs and desires of Muslim minorities in Western nations. As such, there is still plenty of debate to be had.

 

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About Amr Badran

An Egyptian Business Consultant and Corporate Trainer since 1997. I've trained on Management, Leadership and Soft Skills to thousands of people from many nationalities, backgrounds and professions in more than 10 countries across the Middle and Far East. Holder of an MBA and a Candidate for Doctorate in Business. Find more about my Management and Personal Skills Courses at AmrBadran.com and feel free contacting me at Amr@AmrBadran.com
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