A Guideline to Islamic Marketing Mix

Qader Vazifeh Damirchi, Faculty Member Of Islamic Azad University – Parsabad BranchBarat Vazifeh Damirchi, Project manager Of Pars Sitting Systems

vazifehqader@gmail.com

Abstract:

Islamic values have largely shaped the social structures, culture and legal norms that influence consumer preferences and behavior. Its rules, matters of give and take, sales and purchase dealings issues which are define in Holy Quran make the unique concepts of Marketing. Islamic marketing related to directly with customer's satisfaction and commitment. Even business getting benefit or not, give the total awareness to the customers about the product and services. Don't hide anything from customers. Although the purpose of Islamic marketing is this "business for profit ", but the importance is given to the satisfaction of customer. Islamic business rules can not be changed and not amendable by individual or company. Unique rules are for ever and for everyone.

In this Paper, We have analyzed the Islamic Marketing definition and its importance as an economic institution, its effective tools that affect customers and success in business. We have considered Marketing mix (Product, Price, Place, Promotion and People) in company systems according to Holy Quran and Islamic Laws. Then, have emphasized on strategic outlook of business's competitive advantage and given some examples from economic institutions marketing mix differences.

Finally, we have tried to show a guideline to Islamic marketing mix, adapting with Muslims needs, compromising the quality of services or products offered to customers, and surrendering the profit margins of business, elevating the standards of behavior and also living of traders and costumers, reflecting the correct organization's sources; mixed well, and making the advantage and standards of business worldwide one.

Key words: Holy Quran, Islamic marketing, marketing mix, Islamic laws, costumer, business.

Introduction

International marketing practices, embedded in a strong ethical doctrine, can play a vital role in raising the standards of business conduct worldwide, while in no way compromising the quality of services or products offered to customers, or surrendering the profit margins of businesses. Adherence to such ethical practices can help to elevate the standards of behavior and thus of living, of traders and consumers alike. Against this background, this paper endeavors to identify the salient features of the Islamic framework of International Marketing Ethics. In particular, it highlights the capabilities and strengths of this framework in creating and sustaining a strong ethical international marketing culture. At the heart of Islamic marketing is the principle of value-maximization based on equity and justice (constituting just dealing and fair play) for the wider welfare of the society. Selected key international marketing issues are examined from an Islamic perspective which, it is argued, if adhered to, can help to create a value loaded global ethical marketing framework for MNCs in general,

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and establish harmony and meaningful cooperation between international marketers and Muslim target markets in particular.

The Islamic religious perspective warrants considerable importance in the field of global business ethics for five reasons. First, Islam provides a framework that shapes the moral and ethical behavior of a growing number of Muslim consumers around the world. These consumers constitute about one quarter of the total world population and represent a majority in more than 50 countries. Second, an increasing number of Muslim countries represent some of the most affluent consumers in the world. Islamic financial institutions, for example, manage or control funds worth around $60 billion (Rodney, 2004). Third, there has been an increasing level of foreign investment in Muslim countries over recent years. Fourth, there is a growing momentum towards the formation of a Muslim trading block. And fifth, the current political mood indicates that there appears to be a definitive push towards greater Islamisation of countries where Muslims are in the majority (e.g. Iran, Malaysia, Egypt, Algeria, Pakistan, Sudan, Afghanistan, to name but a few) in the form of a return to the application of the Islamic law (Shari’ah) to all facets of life and thought.

The Islamic financial system broadly refers to financial market transactions, operations and services that comply with Islamic rules, principles and codes of practices. The laws and rules of the religion require certain types of activities, risks or rewards to be either prohibited or promoted. While Muslims undertaking financial transactions are encouraged to use financial instruments that comply with these rules, other investors may find the appeal of these instruments from an ethical standpoint.

Islamic laws and rules are known as Shariah and are also referred to as Islamic jurisprudence. Shariah governs all aspects of Islamic matters including faith, worship, economic, social, political and cultural aspects of Islamic societies. The rules and laws are derived from three important sources, namely the Holy Quran (the holy book of the religion of Islam), Sunnah (the practice and tradition of the Prophet Muhammad s.a.w.) and ijtihad (the reasoning of qualified scholars). Further elaboration and interpretation of the rules dictated by the Holy Quran and Sunnah are provided by qualified scholars in Islamic jurisprudence via ijtihad or an interpretative process which is carried out within the framework of Quran and Sunnah.

Modern Islamic financial products and services are developed using two different approaches. The first approach is by identifying existing conventional products and services that are generally acceptable to Islam, and modifying as well as removing any prohibited elements so that they are able to comply with Shariah principles. The second approach involves the application of various Shariah principles to facilitate the origination and innovation of new products and services.

The Islamic marketing principles combine a value-maximization concept with the principle of ‘justice’ for the wider welfare of the society. These principles offer a means to create value and elevate the standard of living of people in general through commercial pursuits. The Islamic ethical guidelines ensure respect for, and the individual freedom of, both bankers and customers. Islamic ethics dictate that under no circumstances should marketers exploit their customers or in any way involve themselves in dishonesty, fraud or deceit. Any unethical marketing practice does an injustice, which, by definition, negates the concepts of brotherhood and equality of humanity that form the core of the Islamic vision (Saeed, Ahmad and Mukhtar, 2001). Thus, adopting the Islamic marketing ethics ensures that the seeds of harmony are planted and a proper order in society is provided, thereby enhancing the dignity of, and upholding the rights of human beings.

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The “4 Cs” Customer PerspectiveTo define Islamic Marketing Mix in terms of the traditional “4Ps” of Marketing is a fall back to the old days of marketing. As with many aspects of traditional business, today's market demands an adjustment to see things from your customer's perspective.The “4 C” approach to marketing is described below and follows the ”You” Marketing philosophy of putting the customer - “you” - first. The “4Cs” changes marketing mix definition from Product, Price, Place and Promotion to Customer Value, Cost, Convenience and Communication.The “4 Cs” marketing mix definition seeks to turn traditional marketing thinking on it's head by looking sales and marketing in a customer-centric way. Instead of looking at how each aspect of marketing is seen by the business, you look at these from the customer's perspective.The point in using “4 Cs” instead of “4 Ps” is not an exercise in semantics. Rather, key into the thinking behind the exercise which is to get you to see thing from your customers' point of view.

Customer Value (Not Product!)A product is something you make which people come and buy. However, today, you can no longer succeed by making what you want and must instead find out what customer's want.Focusing on Customer Value allows you to reset your perceptions around what it is you are creating and bringing to the market, be it a product, service or some other value. Everything begins and ends with your customer and you exist to serve their needs.Value is what your customer is concerned about, not you, your fabulous product or anything else you do. Value is how you define marketing mix “products” and what you should seek to engage your customer with. It is the value you provide that defines you in the marketplace.

Cost (Not Price!)Instead of thinking of price as something you charge, think of cost as something customers pay. This simple adjustment once again opens up a whole new way of thinking about sales and marketing.When you define marketing mix cost you tune into the customer dilemma of deciding how to spend limited money to satisfy unlimited wants. Are you providing enough capital to compete effectively?Your motivation in going to market should not be to maximize your gain but to maximize customer value. Therefore, you should ask how you can provide more for the same cost to the customer instead of asking to make more profit from a product.

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Convenience (Not Place!)The day is not far off when the majority of shopping will not take place in shops or through the traditional distribution channels of business. Your customers today are governed by purchase when, where and how it is convenient to them.Thinking about convenience not only allows you to open up to newer ways of connecting with customers and distributing products, but helps you shift into the mindset of providing an optimum overall experience for customers.To define marketing mix in terms of convenience reminds you that customers today are very busy and have many choices. It is no longer your right as a business owner but a privilege when customers choose you. Make it as easy as possible for them to do so.

Communication (Not Promotion!)The final new market mix definition replaces the traditional notion of “Promotion” with Communication. This final concept of how you define marketing mix from the customer's perspective ties into creating Interactive Marketing Communication.“Promotion” hearkens back to the day's of mass marketing which does not work anymore. Just like you cannot simply build a “good product” and expect people to buy it, so customers no longer believe everything you say at face value.Instead of virtuous pronouncement about how good your product or service is, customers today seek to be engaged and have meaningful interactions with you. You must therefore strive for two-way communication and building relationships

Islamic Marketing Mix

In defining Islamic Marketing ethics, Saeed, Ahmad and Mukhtar, (2001) state that Islamic marketing ethics based on the principles of justice and equity in Islam differs from secular ethics in many ways. They discussed the three characteristics of market ethics from the Islamic perspective. Firstly, Islamic ethics are based on Qur’anic commandments and leave no room for ambiguous interpretation by marketing executives to suit their individual whims and desires. Secondly, the main difference is their transcendental aspect of absoluteness and non-malleable nature.

Thirdly, the Islamic approach emphasizes value-maximization in view of the greater good of the society rather than the selfish pursuit of profit maximization. Such properties grant Islamic ethics a tremendous capacity to penetrate human conscience and are capable of influencing the behavior of marketing executives from within.

Commercial activity from an Islamic perspective is governed by two principles:

(i) Submission to the moral order of God,(ii) Empathy and mercy to God’s creations which implies refraining from doing harm

to others and thus preventing the spread of unethical practices.

In this paper, an attempt is made to analyze the five Ps of marketing mix within the context of ‘marketing’ as determined by Islamic ethics. The five Ps are: product, price, promotion, place and people.

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PeoplePeople

Product Product

PromotionPromotionPlacePlace

PricePrice Islamic Marketing

Mix

Islamic Marketing

Mix

1. Product/ Production Process

The development of Islamic products should be visualized quite differently as compared to Western thinking. The Islamic perspective incorporates moral and transcendental elements within the production decision-making process in product development and is guided by the principles of Islamic business ethics. These principles dictate, as Ibn al-Ukhuwwah (1938) remarked, that firstly, the product should be lawful and not to cause dullness of mind in any form. Secondly, the product must be asset backed. Thirdly, the product must be deliverable since the sale of a product is not valid if it cannot be delivered. Fourthly, there is a need of identification of extra cost-added features that might materially change the product or impact on the buyer’s purchase decisions. Fifthly, all parties intend to discharge their obligations, financial and otherwise, in good faith; and should be based on principle of the justice, fairness and equity.

Under the Islamic approach, the production process has to be guided by the criteria of the value and the impact of the product upon the whole society. This is due to the highest importance given to the actualization of the optimum welfare of a human being and society. The primary objective of the development of suitable product is to deliver, elevate and satisfy basic human needs. Miller (1996) suggest that the main thrust behind unethical decision-making on the part of business persons to produce sub-optimal products is usually some form of cost-conscious strategy. The Islamic perspective, on the other hand, encourages a societal and welfare approach rather than decisions based on the profit maximization.

2. Product Pricing

Pricing policies are, in the main, formulated to exploit and manipulate human psychology as witnessed by common practice whereby the recommended retail price printed on a product is often substantially higher than what retailers actually charge. The aim of such pricing policies is to give customers a false impression that they are in fact getting a bargain.This type of practice is banned under Islamic law. Islam prohibits getting something too easily without hard labor, or receiving a profit without working for it.

Furthermore, it is not allowed to change a price without altering the quality or quantity of the product because this is cheating the easy-going customer for illicit. Islam also prohibits false propaganda or publicity on the part of marketers regarding the position of demand and supply through the media. It should be pointed out that Islam does not prohibit price controls and manipulations to meet the needs of the market. It means that the Islamic ethics allows some time in which to charge higher prices as a result of natural scarcity of supply of a given commodity or setting price ceilings to curb opportunistic tendencies among merchants. Islamically, self-operating mechanism of price adjustments and healthy competition are to be encouraged (al-Qur’an, 83:26). However, the essential conditions for the successful operation of such a mechanism dictate that there should be no corner market, no hoarding, no unjustified price manipulation, and no restriction on trade. Once the second Caliph Umar Ibn al-Khattab passed by Hatib ibn Abi Balta'ah and found him selling raisins at a much lower price with the intention of putting his competitors to loss. Caliph Umar Ibn al-Khattab told him: “Either enhance your rate or get away from our market” .

The hoarding of any product is strictly prohibited in Islam. But the system offers flexibility if competing marketers sell at one price amounts to coercion and distortion of the free market or

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if it means very high product prices. Under these circumstances, officials of the Islamic government can bring together market leaders representing a particular region or a particular commodity, in the presence of others. The purpose is to reach a consensus on price level that would not be unjust to the consumer and at the same time reap reasonable profits to the marketers. The key impetus to intervene on such an ad-hoc basis is to prevent “black-marketing” and “concealment of essential foodstuffs”.

Ibn al-Ukhuwwah (1938) discusses many types of contemporary “ethical lapses” in pricing. Examples given by him include when real owners of the products pretend that they are not the owners in order to hike up the price by making consumers believe that an even higher price would be charged by the real traders, or when there are collusive agreements. He, therefore, emphasizes the role of a public welfare official to ensure that prices remain fair and just by curbing any ethical lapses in price setting. He observes that “the public welfare official must see that a broker receives his commission only from the seller and must not cause the price to be abated in collusion with the buyer’ (Ibn al-Ukhuwwah, 1938:4). All unethical lapses in pricing are tantamount to ‘injustice’ and are sinful. Hence, all profits earned through such unjustified prices are not only unethical, but they infringe upon the unique status of man/woman and his/her role and responsibilities as viewed under the Islamic framework. The Prophet Muhammad (Peace be upon him) remarked, “Do not raise prices in competition” (al-Nawawi, 2:270). In order to eliminate this type of ‘injustice’, the marketer and customer must acknowledge that they have higher moral responsibilities on earth rather than be preoccupied with profit maximization alone.

3. Product Promotion Rules

There is no room in Islam to justify any cover up of deceptive promotional behavior. Al-Qur’an condemns all forms and shapes of false assertion, unfounded accusation, concoction and false testimony (al- Qur’an, 43:19). In terms of Islamic marketing ethics, it is unethical for the salesman or customer relation advisor (CRA) to over-praise his products and attribute to them qualities which they do not possess (Ibn al-Ukhuwwah, 1938). Furthermore, giving a false impression of any kind to promote or sell a product is strictly prohibited within the Islamic ethical framework of international marketing practices. Therefore, in the area of product promotions, Islamic marketing ethics will follow the following rules:

avoidance of false and misleading advertising; rejection of high pressure manipulations, or misleading sales tactics; avoidance of sales promotions that use deception or manipulation.

According to Islamic ethics, a seller is a person who feels accountable to God. He should be honest and fair in his marketing activities. Only true documents which reveal accurate specifications in terms of quality, contents, etc. will exchange hands. To practice otherwise constitutes disgraceful, dishonourable and shameful gain through pandering, deceit, treachery, theft or injustice. According to Islamic principles, marketers are required to “disclose all faults in their goods, whether obvious or hidden; to do otherwise is to act… fraudulently”. It is obligatory for the seller to reveal all known defects which cannot be seen “on the surface” and cannot be found out by the “cursory glance” to the purchaser. In addition, it is dictated that – “A sale without any stipulation makes it necessary that the thing sold should be free from defect”. Marketing disclosure is manifested either by assurance which will be given by word of mouth or in writing, or in some cases silence will mean assurance. The Prophet Muhammad (Peace be upon him) expressly condemned all manipulative promotional behaviour stating that, “One who cheats us is not one of us” .

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In Islamic ethics, promotional techniques must not use sexual appeal, emotional appeal, fear appeal, false testimonies and pseudo research appeal, or contribute to the dullness of the mind or encourage extravagance. Within the Islamic framework, these methods are unethical since they are utilized purely to exploit the basic instinct of consumers worldwide with a view to gain profits and greater market share. Furthermore, Islamic ethics strictly prohibits stereotyping of women in advertising, and excessive use of fantasy. The use of suggestive language and behaviour, and the use of women as objects to lure and attract customers are also not allowed.

4. Place: Distribution Channels

The ethical dimensions of decision-making pertaining to distribution are of great significance in the area of marketing. Physical distribution can be viewed as an integrated collection of information, people, equipment, and organization. In respect of distribution of product, therefore, Islamic financial institutions will follow the following principles:

Not manipulating the availability of a product for purpose of exploitation; Not using coercion in the marketing channel; Not exerting undue influence over the re-sellers choice to handle a product.

It is not surprising to note that decisions made on the profit maximization principle are not necessarily the most appropriate for a society’s welfare. Other cases of unethical practices in distribution include the usage of packaging designs without adequate security and protection for the product, inappropriate packaging, and dangerous and toxic products transported through public highways. From an Islamic perspective, such treatment of customers is unforgivable and equates to unjust marketing practices.

According to Islamic principles, distribution channels are not supposed to create a burden for the final customer, in terms of higher prices and delays. for example, identifies, in particular, ethical lapses in distribution channels as those which cause unnecessary delays in their delivery, compelling customers to return repeatedly and thus causing them unnecessary inconveniences . Islam does not prohibit agency representation as a link in the market to facilitate the movement and acquisition functions. Within the Islamic ethical framework, however, the main aim of distribution channels should be to create value and uplift the standard of living by providing ethically satisfactory services.

5. People

Islam emphasises the importance of “free” and “independent judgment” on the part of the customer. The ability to think rationally while making any decision relating to global marketing activities is a prerequisite in Islamic law . The society at large should not be deprived of honest, free from coercion marketing information. A customer’s right to acquire such information is his right and is indicative of the status given to him by Islam, as well as of the ingrained rights of his wealth which he spends in purchasing products and services. It is the responsibility of the marketers not to resort to any form of coercion and they must, under all circumstances, have a regard for the intellectual integrity and a higher degree of consciousness of the consumers to ensure that the hard earned money of customers is not wasted. Coercion or ‘ikrah’ (Al-Qur’an 23:7), as defined by Tyler et al., (1967:149–150), is to compel a person to do a thing without his consent. It follows therefore, that whenever some coercive force is applied for the purposes of concluding a global marketing deal, the fundamental and vital condition of mutual consent remains unfulfilled and the resultant

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transaction is unethical and unlawful. The Prophet Muhammad (Peace be upon him) prohibited a transaction concluded under constraints or bay' al-Mudtarr (Ahmad, 1995:126). According to Islamic principles, sexual appeal, emotional appeal, fear appeal, subliminal advertising and pseudo scientific claims all have elements of coercion which cause them to be categorized as unethical as a means of marketing. An ethically sound marketing-mix, therefore, dictates that customers’ decision-making freedom must be protected from all elements of coercion.

ConclusionThe Islamic financial system broadly refers to financial market transactions, operations and services that comply with Islamic rules, principles and codes of practices. The laws and rules of the religion require certain types of activities, risks or rewards to be either prohibited or promoted. While Muslims undertaking financial transactions are encouraged to use financial instruments that comply with these rules, other investors may find the appeal of these instruments from an ethical standpoint.So, the way to reach customers better and more effective than competitors must have the appropriate tools and tactics, because the markets are different and the differences are very much together. No longer possible for all enterprises unit complex version, the period of Shah Key has finished, Companies for market success in any appropriate type of industry and enterprise capabilities and economic power must be a specific marketing mix tactics or it can be designed and implemented. Our suggestions are the Islamic five Ps (product, price, promotion, place and people) to countries economic and industrial growth.

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