The Halal Journal | Nov+Dec 2010 | 24
Words by
Joy AbdullahMARKETING TO GLOBAL MUSLIMS
Identifying and understanding brand...
The Halal Journal | Nov+Dec 2010 | 25
What lead to this
phenomenon?
In the past decade, Asia’s one
billion-strong Muslim p...
The Halal Journal | Nov+Dec 2010 | 26
compliant products. Making
inroads to this sector takes deep
understanding of the va...
The Halal Journal | Nov+Dec 2010 | 27
hj
About the Author:
With dual expertise in strategic business planning and brand ma...
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The halal journal nov dec ’10 marketing to global muslims-identifying & understanding brand risks

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Tackling the Brand Risk in marketing to the global Muslim community

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Transcript of "The halal journal nov dec ’10 marketing to global muslims-identifying & understanding brand risks"

  1. 1. The Halal Journal | Nov+Dec 2010 | 24 Words by Joy AbdullahMARKETING TO GLOBAL MUSLIMS Identifying and understanding brand risks Feature.indd 24 10/21/10 9:26:36 AM
  2. 2. The Halal Journal | Nov+Dec 2010 | 25 What lead to this phenomenon? In the past decade, Asia’s one billion-strong Muslim population has grown by 12 per cent. In Europe, the gain is closer to 140 per cent, rapidly outpacing the rest of the population. More than 30 million Muslims live in the Russian Federation. In Britain, Muslims are the quickest-growing segment of the middle class, chalking up an average of 3.4 children against the national average of 1.9. At current growth rate it is projected that 50 per cent of the world’s population will be Muslims by 2050; resulting in an already discernable shift in global economic power. In four years, the GDP (Gross Domestic Product) of BRIC (Brazil, Russia, India and China) plus Indonesia, Turkey and Mexico will be 11 per cent higher than that of the current G7 countries. With such critical mass, has come spending power. The Halal food category is estimated at USD560 billion, in which America’s eight million Muslims spend a reported USD170 billion annually while, those in the UK fork out USD31.5 billion, and those in France another USD7.1 billion a year. Other key categories like Islamic finance are estimated to be at USD400 billion and growing at about 15 per cent a year. The availability of new products and services and a rising demand for mainstream products and services is making the global Muslim market a very attractive segment for brand marketers. What does Halal mean today? Traditionally, the term “Halal” was associated with the dietary requirements of the Muslim community. It meant avoiding pork and alcohol and buying specially slaughtered meat. But now, young global Muslims, with strong purchasing powers are hungry for more mainstream products and services that fulfil their specific needs—giving rise to a host of categories under the umbrella of Halal category. Who are today’s Global Muslim Consumers? 70 per cent of the Arab world is under 25-years-old, while two- thirds of the Muslim community in Europe and North America is under 30. Given this “youth” of the global Muslim community, it is no wonder that categories like cosmetics and fashion is becoming more and more popular. Halal cosmetics are one of the fastest growing sectors of the Halal industry, worth around USD560 million annually (as per Epoc Messe Frankfurt). Identifying the risks For a brand entering this market, the planning requirements are not any different from entering any other market or segment-- identifying the key markets, researching the impact of the existing product portfolio on the Muslim community of that market, evaluating the competitions’ actions in order to benchmark and obtain best practices and finally doing an opportunity cost analysis to obtain earnings and brand sustainability—are all but a must in planning for establishing a successful brand. But the key is in understanding the psyche and emotional needs of the young Muslim consumer. Especially given that they are online and tech-savvy. Quoting the Marketing Week, “Muslim consumers are a growing, influential and extremely loyal group, making them a desirable market for mainstream brands. But reaching them requires more than launching Shariah- The global Muslim consumer market segment is intriguing marketers across product categories as the global Halal industry has exploded! Spanning from food, to fashion, to finance and pharmaceuticals, Halal today is big business, and multinationals and independent entrepreneurs are scrambling for a piece of the USD2 trillion market (as estimated by the global consulting group AT Kearney). Feature.indd 25 10/21/10 9:26:42 AM
  3. 3. The Halal Journal | Nov+Dec 2010 | 26 compliant products. Making inroads to this sector takes deep understanding of the values of this community and building the brand from there. They’re young, ambitious and worth at least USD2 trillion globally”. The key words above are “deep understanding of the values of this community and building the brand from there”. The foundation of which is in the concept of Halal itself that goes beyond just food and drink, and is a way of life. “Young Muslims are, for want of a better phrase, ‘more Muslim’ than their parents,” says Lisa Mabe of Hewar Communications-Washington DC. “They do feel as though wearing their religion on their sleeve is a way to say ‘Hey, this is who we are and this is what Islam stands for.’” This is the key point in developing a strong brand identity for the global Muslim segment where the differentiation from other consumer segments comes in. Understanding and applying this concept in developing the brand involves evaluating closely the risks and organisational demands that are involved in the process. The risks should not be underestimated. They should be thoroughly studied and evaluated on two levels: 1. Product/ Brand level A product and brand risk analysis considers the impact that targeting the Muslim consumers might have on the organisation’s core global brand if the product is sold in the western markets of UK, Europe and USA. Why such product and brand risk analysis is necessary: (a) In Europe, the popular French burger chain, Quick, announced its intention recently to boost its Halal- only outlets from eight to 22 to meet demand; it was hit from all sides. Right-wing politicians accused it of selling out its mainstream clientele, while Islamic groups branded the gesture pointless, unless its restaurants become Halal through-and-through. (b) In Birmingham UK, Domino’s Pizza chain ditched its Halal-only menu after just eighteen months, when sales of the pork- free pizzas plummeted. (c) Nike failed miserably with the launch of its 1996 line of Air basketball shoes. The brand logo, a flame-like graphic of the word ‘air’, was deemed by the Council on American-Islamic Relations to look too similar to the Arabic script of ‘Allah’. Nike was forced to recall 38,000 shoes, scrap the logo and make its apologies in the form of sports facilities for Islamic schools and free Nike products to Muslim charities. 2. Corporate level A corporate level risk analysis takes into account a wider view of potential transnational consumer activism thereby enabling the organisation to be prepared to deal with at least three potential threats— social, political and financial. (A) Social Risk: by virtue of their numerical strength and purchasing power, the Muslim consumer can choose “not to buy”. Such “not to buy” acts are not uncommon. Recall the indignation and, subsequently, the impact the global Muslim community had over the publication of cartoons of our beloved Prophet (p.b.u.h.) in a Danish newspaper. The Feature.indd 26 10/21/10 9:26:47 AM
  4. 4. The Halal Journal | Nov+Dec 2010 | 27 hj About the Author: With dual expertise in strategic business planning and brand marketing, Joy Abdullah is a Brand Enabler and is one of the directors at Daily Baraka Ltd – a business and brand marketing consultancy based in the UK with the objective of enabling organisations to deliver quality products and services to the global Muslim community. Such synthesis of strategic planning enables Joy to aid brands in having a strong reputation, clear image and efficient delivery. By using ethics, values, governance requirements and desired brand objectives in corporate planning, Joy minimises potential risks a brand may face, in developing the brand’s experience (to its stakeholders). He has strong knowledge of ASEAN & Indian markets. He has written many articles on the importance of ethical brand marketing encompassing brand reputation management, employee-brand relationship and CSR. His articles can be viewed at www.dailybaraka.eu and at www.opalesque.com/index.php/ archiveOIFI. Daily Baraka: “We enable brands, whether they are our own brands or ones for which we consult, that are Halal and specifically target to fulfil the needs of the global Muslim community.” subsequent lack of political and cultural empathy led to a widespread boycott of Danish products to the extent that even western retailers removed Danish products from their shelves due to fear of negative repercussions. Such risk of “backlash” exists if the organisations are seen to be “exploiting” the Muslim consumer. With the rise of social media, and “interest communities” being online 24/7 blurring geographical and cultural distinctions, a backlash (on a brand) can spread like bushfire through the global Muslim community in a matter of hours, thus affecting the brand not in just one specific region but globally across the markets it is present in. (B) Political Risk: Given the rising awareness of Islam, and a new found resurgence of the Muslim identity, governments across Muslim countries have responded with regulatory changes. Malaysia, for example, has created its competitive advantage by promoting Halal foods, Islamic Finance and Halal tourism. Kuwait had its first women ministers a year ago (ref: www.guardian.co.uk). (C) Financial Risk: An existing organisation has to evaluate the potential ‘fallout’ that may occur through alienating the existing consumer base by entering the Muslim consumer segment AND also has to evaluate potential revenue loss from not correctly serving the Muslim consumer. This needs to be balanced out versus the projected revenue growth expected from serving the Muslim segment. Given that, today, Muslim consumers are radically reshaping the face of mass consumerism and that the umbrella category of Halal will grow far beyond its anchor product of food and finance to include housing, cars, furniture, holidays, and so on, all developed in accordance with Shariah principles. Marketing to the global Muslim community would have to ensure, re-assuring the Muslim consumers, that the brand offered is not just a “marketing ploy” but a genuine approach, in sync with Islamic values and principles in all aspects of the brand’s operations. Towards this, communicating transparently, acknowledging Muslims in the brand communication, providing a beneficial, relevant and meaningful brand experience will enable a brand to reduce and control risk to a great extent. “Young Muslims are ‘more Muslim’ than their parents,” says Lisa Mabe of Hewar Communications-Washington DC. “They do feel as though wearing their religion on their sleeve is a way to say ‘Hey, this is who we are and this is what Islam stands for.’” Feature.indd 27 10/21/10 9:26:52 AM

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