Marketing in the Emerging Markets of Islamic Countries

Citation

Marinov, M. (2010), "Marketing in the Emerging Markets of Islamic Countries", Journal of Islamic Marketing, Vol. 1 No. 1, pp. 81-83. https://doi.org/10.1108/jima.2010.1.1.81.1

The title of the book suggests that this publication is dedicated to the investigation of the markets in Islamic countries. This decidedly academic book covers important and timely issues. The book consists of ten chapters. The first chapter is devoted to the marketing challenges in Islamic countries. By considering the specifics of the Islamic context, the chapter provides an overall evaluation of the business and marketing uniqueness of the Islamic world as determined by diverse factors. Various regions of the Islamic environment are considered separately. An individual chapter explores the marketing particulars in the region of Central Asia and another chapter draws attention to marketing in Kazakhstan. Further on, there are chapters in the book discussing and reflecting upon the features of marketing in the Maghreb Region in general and Morocco in particular. These are followed by a chapter on marketing in the Middle East, including the markets of Iran, Kuwait and Saudi Arabia. Finally, light is shed on marketing in the Islamic countries of Southeast Asia with the states of Brunei, Indonesia and Malaysia being under the lens.

The book is extremely valuable at presenting a detailed analysis of the markets in the Islamic world and addressing their idiosyncrasies in detail. It becomes clear that some of these markets have not attracted the attention they deserve, while other markets have become rather isolated from the mainstream development of marketing strategies and approaches. Thus, some Islamic countries, such as Somalia and Mauritania, could be described as a forgotten part of the world, whereas others, mostly rich in natural endowments, have attracted the attention of marketers from all over the world.

Currently, Islam has far more than one billion followers and most of them live in compact masses in emerging markets. Predictions suggest that by 2020 about a third of the world population will be Muslim. An increasing number of countries with predominately Islamic population have adopted Shari'ah law that strives to implement Islamic principles and ideals in the everyday personal and business life. Islamic law and ethics have a major impact on international business in general and its functional areas in particular, such as finance, banking and marketing. These specifics can determine firms' profit, operational specifics, customer behaviour and relationships between businesses and consumers, business‐to‐business practices, just to mention a few. Shari'ah law impacts the economic activities in many Islamic countries and has far‐reaching implications for marketing. For example, this law commands that earning profits for shareholders is subordinate to serving the society and contributing to it. Thus, pricing policies of companies adhering to Islamic law are affected. Moreover, such businesses cannot pass distribution cost onto consumers as the law forbids charging customers with expenses unrelated to product quality. Very significant religious and cultural differences pose serious challenges to none‐Muslim multinationals operating in the Islamic countries.

Recent's nations in the Middle East emerged from a range of nomadic tribes and colonial interests shaped their boundaries. Nevertheless, many of the boundaries between the countries in the region are not specified yet. The most diversified regional economy is the one of the United Arab Emirates, which acts as a business hub of world importance. Iran and Saudi Arabia are the most populous countries in the region and they represent the largest economies of the Middle East. Part of the region is characterised with high political risk. Thus, investor's interest has almost vanished from Afghanistan, Iraq, and the Palestine areas. The oil‐rich nations of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates are stable and they boast around 12 million middle and high‐end of the market consumers. Firms are lured to these attractive markets by the high average purchasing power of consumers. The consumers with high buying power tend to scrutinise every detail of the products they buy and make a detailed price‐quality analysis prior to any purchase. Society is gender separated and so is marketing. This fact is clearly evident in such industries as banking, retailing, education and hospitality although differences may vary from country to country. Throughout the region, marketers need a strategy that takes into account the Islamic values, that stresses the quality issue, and emphasises on building a strong reputation and reliable relationships.

Now, one of the world's richest nations, i.e. Kuwait, relies strongly on oil revenues and imports most of its consumer goods. The consumer demographics of Kuwait are very diverse and the population is divided into Kuwaiti (38 per cent of the country's population) and non‐Kuwaiti consumers.

Iran, the most populous nation in the Middle East, is mostly with Persian population, and due to this it is culturally dissimilar from its Arab neighbours. The young population of the country (three‐quarters of the Iranians are below 30 years of age) and the industrialisation of the country have caused large recent urbanisation. Rich in national endowments, the country depends on revenues generated by their exploitation. Culturally, the population adheres to Islam, traditional family values and conventionality. Strict governmental intervention and regulations limit foreign trade opportunities. Foreign firms doing business in Iran generally form partnerships with local businesses to soften the severe restrictions for business activities inflicted on non‐Iranian business.

The most educated and affluent consumers from Islamic countries are found in Bahrain, Kuwait, Qatar and the United Arab Emirates, where buyers are most sophisticated and demand high‐end of the market and iconic brands. Thus, customers from these countries resemble the US and European consumers in their brand preferences. Overall, emerging Islamic country markets offer a growing number of better‐off consumers that can be successfully targeted with gender‐specific approaches, relevant and appropriate use of religious words and phrases, emphasis on modesty and simplicity, and application of appropriate price policy. For foreign companies, franchising is the best approach and the fastest growing business mode of market serving accounting for about 75 per cent of the new businesses in the Gulf Region.

The Central Asian Islamic countries are break up former republics of the ex‐USSR. The area is rather diverse in cultural and political aspects. The largest segment in the region, which comprises Sunni Muslims, co‐exists peacefully with a variety of Christian followers. The rather secular oil‐rich Kazakhstan is the wealthiest Central Asian country. Still, the average income is small compared with the one in developed countries. The consumers from Central Asia are price‐sensitive, highly suspicious of promotional activities and branded products. Local retailing is dominated by bazaars where a huge variety of goods produced mainly in China and Turkey are sold together with domestic produce. State‐owned stores sell basic commodities, whereas some high‐end outlets offer well‐established brands.

The Maghreb region covers most of Northern Africa. Because of the geographic proximity to Europe and the colonial past, consumers from this part of the world are frequently referred to as “European Arabs”. Economic structure, although varying across the region, shares certain similarity. Moreover, culture and language are very close, almost identical, allowing marketers to adopt unified or Pan‐Maghreb marketing strategy. The economies of Algeria and Tunisia seem healthy and have undergone some liberalisation after being under central state control.

Morocco offers good opportunities to marketers due to strong European influence and a more open society. As a result of heavy advertising and high brand recognition among the majority of the Moroccan consumers, foreign multinationals have dominant market share in the country.

Three of the Southeast Asian countries, Brunei, Indonesia and Malaysia are with predominantly Muslim population. Brunei, the richest economy in the region, allows relatively free access of foreign firms and media to its consumers. Relying heavily on consumer imports, Brunei retailing offers a huge variety of goods in the high‐end segment of the market. Experiencing economic, ethnic and social instability, Indonesian consumers are highly stratified. Multinationals in Indonesia adopt pricing strategies that secure high profits despite the constant slump in demand in the last ten years. Although brand recognition among Indonesian consumers is low, they value highly all type of imported goods. The Malaysia economy has experienced the introduction of significant marketing restrictions. The country offers many opportunities for foreign food firms and franchised businesses.

The book provides an in‐depth encounter with the Islamic countries, the variety of their contexts and the specifics of Islamic markets and marketing. It is an extremely useful reading for both academics and professionals giving a holistic understanding of markets and marketing specifics in the Islamic world.