Islamic branding alserhan

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Dr. Baker Ahmad AlserhanIslamic Branding:

A Conceptualization of Related Terms

Presented byDr. Mohammed Ibahrine, American University in Sharjah

@

Islamic Economics and Finance Reading ClubCoordinated by

Dr. Ashraf Khallaf

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Islamic Branding:A Conceptualizationof Related Terms

Dr. Baker Ahmad Alserhan

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A Word on the Reading Method

• Restructuring the structure

• Reframing the content

• Re-orienting the findings

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Organizational Pattern

• 1. Goal• 2. Objectives• 3. Significance• 4. Theses• 5. Methodologies• 6. Typologies• 7. Conceptual Distinction • 8. Halal Issues• 9. Practical Implications• 10 Research Implications

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Goal of the Study

• 2 provide an understanding of Islamic branding through a Conceptualizing Exercise

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5ive Objectives of the Study• (1) Emphasize the importance of Muslims as a distinct potential market

• (2) Highlight the lack of research about Islamic branding, despite the huge potential of the Islamic market

• (3) Define and differentiate between the concepts of Islamic brands and Islamic products

• (4) Conceptualize the major branding strategies a firm needs to take into account

• (5) Provide a valuable source of benchmarking insights for practitioners as well as future research

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The Significance of the Study

• In 1990, the Islamic Food/Nutrition Council of America had 23 clients pay for its halal

• In 2009, it certified products for 2000 clients

823 clients

(1990)

2000 clients(2009)

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Thesis 1/10

• Halal market is huge

• Halal industry grows in size as well as in sophistication

• Halal market will continue to grow substantially

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Thesis 2/10

• Non-Muslim multinationals like Tesco, McDonald and Nestlé have massively expanded their Islamic operations

• They control 90 per cent of the global halal market

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Thesis 3/10

• About 70 percent of the Muslims follow halal standards

• As Muslim populations grow in most countries in the world

• Consumption of halal products is increasing

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Thesis 4/10

• Like Kosher and organic industry, halal is mainstreaming

• “New Hispanics”

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Thesis 5/10

• The vast majority of the kosher customers are not of the Jewish faith and, likewise, many Shariah-compliant firms reveal that not all of their customers are Muslims

• e.g The Jawhara Hotels, an alcohol free Arabian Gulf chain (60 percent)

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Thesis 6/10

• There is no worldwide authority on halal

• There are more than 15 halal logos

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Thesis 7/10

• Doing business in Islamic countries is a challenge– Reason:

• Muslims have a different set of values and beliefs that guide their behavior in both business and non-business situations

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Thesis 8/10

• The limits of religion and the evocation of religious emotions as the driving appeal

• Muslim consumers will NOT buy halal simply because it is halal

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Thesis 9/10

• Halal industry no longer stops at the production process (Globalization)

• Dubai’s role as a hub for the region is growing

• Kuala Lumpur operates as a halal logistics hub

• Rotterdam as Europe’s biggest port

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Thesis 10/10• Firms willing to target Muslim consumers:

• Need a different understanding for the needs and wants of this segment (motives underlying its decisions)

• Need different marketing strategies as compared to targeting traditional consumers

• Need to align their strategies with the Islamic values, standards and guidelines

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Definition of Religious Brands

• Islamic religious brands, or halal brands, are created according to the Islamic principles that guide what is permitted not just in the food industry but also in clothing, cosmetics, hospitality, logistics, finance, and banking

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Definition of halal

• HalaI is an Arabic word that is equivalent to the English word lawful and wholesome

• Halal is a term encompassing not only food and drink

• It is an all-encompassing concept that encourages a Muslim to adopt products that promote goodness in all aspects of life, safe for consumption and produced in a clean and healthy environment

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Kosher and Halal

• Kosher applies only to food

• Halal is a term encompassing not only food and drink, but All other matters of daily life

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Kosher and Halal

Halal

Kosher

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Kosher and Halal• Halal is more than ethnic food

• Halal offers much greater opportunities for diverse mass businesses

• Halal means Money

• In the United States, the Kosher food industry is valued at $ 100 billion

90 000 Kosher products1000 certified halal products

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Non-Muslim multinationals and Halal

• The halal market remains unexplored by the majority of non-Muslim multinational corporations until very recently and the relatively small number of MNCsthat dared to engage halal at an earlier stage now enjoy the results of their timely intervention

• Non-Muslim multinationals dominate 90 per cent of the halal food market

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Commercialization of Islam

• Mecca Cola

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Commercialization of Islam

• The extreme commercialization of Islam is Mecca Cola

• It is positioned and branded as an alternative to Coca cola

• Consumers dispose of the bottles and cans in the garbage

• If it is a non-Muslim company, it might have been labeled as anti-Islamic for disgracing the name of the most holy place in Islam

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Prophet 4Profit

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MethodsTypologies= Brands

Islamic Brands by Compliance(IBSCO)

Islamic Brands by Customer(IBBCU)

Islamic Brands by Origin(IBBO)

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MethodsTypologies = Categories

Food:• Dominated by non-Muslim

companies• No Arab halal brands (Al

Mari)

ServicesHighly developed

LifestyleSlowly emerging

Halal extends beyond food

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84%Global Food

Industy

16%Global HalalFood

Industry

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Halal Certification

• Halal certifications and logos are used as a way to inform and assure their target Muslim consumers that their products are Shariah-compliant

• Halal certifications and logos are about TrusT

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Halal Certification

• A product must be certified to pass inspection by an Islamic certifying agency/authority

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Practical Implications

• There is still some confusion in differentiating between Islamic brands and Islamic products

• Turkey is an Islamic country• Turkey’s wine production is huge• There is no halal wine

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Practical Implications

• Egypt is an Islamic country• Egypt had 350 000 pigs before 2009 (swine

flu)

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Practical Implications

• Joke

• How to slaughter pigs in a halal way to make them Islamic?

• A product which is haram by nature cannot be made Islamic /halal by process or by country of origin

• From Farm to Fork

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MNCs Success

• 1. Shariah Compliance

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MNCs Success

• 2. Relocate to Muslim markets• Localisation• National subsidiaries • Employ nationals• Muslim Messages• Products produced by Muslims for Muslims

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MNCs Success

• 3. The product logistics being perceived as halal were not contaminated during storage and shipping

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MNCs Success

• 4. Improved image of these MNCs by sourcing ingredients locally

• Local suppliers can enhance trust

• Sourcing input locally further strengthens the company's image as Shariah-complaint as it is taken for stuffs produced in Muslim countries are halal

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MNCs Success

• “ encourages its national operations to adapt products locally, in order to respect the local, regional and national habits and the tastes, cultural and religious backgrounds of consumers as well as their purchasing power. While all products must correspond to our quality requirements, they vary extensively in composition, recipe, packaging and branding”

(Nestle, 2010) (P. 37)

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Research Implications

• To date, there has been little formal research into branding issues associated with serving these markets, which represent sizeable commercial opportunity for many brand owners and developers

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Research Implications• What are the factors that have impact on halal marketing,

branding and advertising?

• How 2 engage the halal market?

• How 2 identify and create a comprehensive catalogue of research questions

• How 2 obtain information from the Islamic market, including customers, competitors and the business environment (Islamisation of the research methods)

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Research Questions

Globalization and Communication Technologies

• Islamic Markets• Islamic Companies• Islamic Brands• Islamic Products• Islamic Consumers

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