Singapore is currently hosting the 5th Annual World Islamic Banking Conference – Asia Summit. At the end of day 1, I was reflecting on the inputs of some of the distinguished speakers on what they have learnt thus far from the growth of Islamic Finance to what it is today, and what I think Islamic Marketing can learn following Islamic Finance’s footsteps.
Here are my takeaways:
1. Need for More Vehicles: The industry that is Islamic Finance has grown somewhat because of the many banks and institutions which have embraced this concept and practice, and thus develop their own Islamic Financial instruments. Academic institutions too have started to teach subjects on Islamic Finance. While the debate of demand versus supply and which is more imperative may continue, the fact of the matter is that the supply side has responded well, which in turn keeps the demand fueling. Compare that with the number of vehicles that Islamic Marketing can ride on today. Yes, we have the companies such as Ogilvy Noor taking the lead in implementation and research. We also have academic institutions such as Oxford University and its Global Islamic Branding and Marketing Forum also generating interesting discussions. Then there are the scholars in this field such as Dr Alserhan, with conferences such as the Global Islamic Marketing Conference and its supporting academic journals such as the Journal of Islamic Marketing. But beyond these, Islamic Marketing needs more vehicles to ride on in order to grow. It needs more companies, more research, more literature, more champions in academic and industry via practitioners. And yes, institutions too also need to start proposing serious modules on Islamic Marketing, and be bold enough to teach it.
2. Ignore The Naysayers: Islamic Finance is slowly becoming a mainstream form of finance and no longer just a niche subject. Once viewed as a short term window of halal in a sea of haram, it is now taken seriously as a real alternative to finance which addresses some of the risks associated with current mainstream finance. Islamic Marketing is real because of the sheer size of the industry and its rate of expansion. Yet, it too will have its critics who, more often than not, have not really been involved in the production or consumption of Islamic products and services. The point here is for those involved in Islamic Marketing to listen to these critics objectively at best, or to ignore and focus on developing this new social science. The support and motivation comes from working together.
3. Need for Differentiation: Islamic Finance is different beyond its emphasis on removing uncertainty, interest and fairness with fruits shared to all. It has its own innovative instruments developed to address these challenges: Takaful, Sukuk, Mudarabah, Musyarakah… the list goes on. This is where Islamic Marketing is sorely lacking and needs to prove itself. While there have been efforts to address Islamic Marketing at its roots or Maqasid Al-Shariah, more scholarly research and opinion have to be channeled to address areas in marketing which Islamic Marketing can be the force for improvement. What is an alternative to impulse buying and advertising? What is the value proposition of being transparent in trade, beyond the feel good factor and ethics? What is THE model that truly defines Islamic Marketing? Until Islamic Marketing develops its own clear models and frameworks which are better alternatives than conventional marketing, Islamic Marketing in itself will be a weak brand with no real unique point of differentiation.
4. Profitable: One reason why Islamic Finance has grown is because of the proof on the bottom line and its emphasis on managing risk. With this, Islamic Marketing too must prove itself to be a profitable endeavor. This should not be such a challenge, given that the Muslim market is huge and heterogeneous in nature, representing tremendous opportunities for companies to serve untapped markets.
5. Respecting Culture: In doing banking and financial transactions with Islamic markets in the middle east, knowing the culture is an asset, and being able to adopt and embrace it when necessary is half the deal signed. This is certainly an area where Islamic Marketing can contribute in developing localized specialists in regions who understand the complexities and nuances of how Islam is viewed and practiced in different parts of the world. Why is this important? Because understanding this allows research to understand how the consumer thinks and his worldview on matters, which will then shape his consumption and buying behaviors.
These were the five learning points of what Islamic Marketing can learn from Islamic Finance. I’m sure there are more. Share your insights in the comments below.