Why Islamic Marketing is about Principles and not Profits

WHY ISLAMIC MARKETING IS ABOUT PRINCIPLES AND NOT PROFITS?

A PRACTITIONER’S PERSPECTIVE

By

KASHIF SHAHZADA

Presentation for Special Session of 4th Global Islamic Marketing Conference, Istanbul, Turkey 29-30 May, 2013

 

THE BURDEN OF BUSINESS

Business has left a heavy burden on society. Nowhere is this true but in the times we live in. Business was meant to create wealth, trade in goods and services, provide employment and contribute to the betterment of society, but is this truly so? Just look around yourself and ask this question. Businesses, whether small or large engage in activities that harm people as well as the planet. There is a stark difference in what they claim to be and what they really are. What you read or see about business in advertisements, or PR releases and what they actually do behind the scenes is not the same. As outside observers, academics and students merely skim the surface of the business world, but if you are practically in business, it is then that the harsh reality of the business world will be dawned on you. Step into the business world practically, and it is then you will see what it is all about. Don’t just see the glossy advertisements!

WHEN MARKETING IS ALL ABOUT PROFIT?

Marketing is basic to business. It is not the domain of Marketing departments, but in fact is what business is there to do. From knowing customer needs, to making goods and services to fulfilling demand. From financing and pricing to distribution and delivery. From employing people, to running the shops where customers interact. Managing the supply chain from A to Z. Each and everything that a business does falls within the domain of marketing. It does all this to pursue its main goal of profit. This is the crux of the matter and the line of thinking among most business owners out there. They do whatever they do in order to make profit. And this mind set is also officially documented. According to the Chartered Institute of Marketing, Marketing is defined as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably.” It follows from this definition that satisfying customers needs for profit is central to marketing and thus will be the entire focus of a business.

To pursue profit, businesses will often resort to all possible means. Tax evasion, forming cartels, environmental pollution, even racism and slavery. The list is endless. Some are even formed for the very purposes of colonizing other countries, and engage in warfare. In fact there are businesses, very large in size, that would go bust if there were peace on earth! Imagine what they wouldn’t do to ensure that the fire of conflict is always kept kindled!

But times, they are changing. Today’s customers are now a complex phenomenon. Customer needs come in a wide variety of choices and are as diverse as customers themselves. What type of customer requirements should a business fulfill is determined by a business often in conjunction with the legal or ethical framework governing it. With new technologies like social media and Internet, business conduct is within the knowledge of consumers within seconds, and news of misdeeds can spread all over the globe like wildfire. Now businesses also need to convince customers that they are ethical entities. Their offerings are healthy, beneficial and non exploitative. There is a movement for fair trade and green business in the world. This is good news, specially for Muslim owned businesses, because the values that such customers require are pre-existing in the Islamic revelation.

DIFFERENCE BETWEEN CONVENTIONAL AND ISLAMIC MARKETING

While customer needs are the centre-point of conventional marketing, it is argued that in Islamic marketing it is not the customer, but the Creator whose good pleasure is sought by the marketer first and foremost. Thus profit maximization is not the ultimate goal of trade in Islam (Al Serhan, 2011). Islamic marketers are those marketers that apply the principles of Islam to the marketing function rather than pursue profit maximization by any means possible.

Islam is called Ad-Deen in the Qur’an (3:19), a term which is loosely translated as religion or faith. However these English counterparts do not convey the full essence of the word. Deen encompasses every sphere of human activity, whereas some may argue that religion is concerned mostly with matters like dogma, creed, ceremony, worship and festivals and may think that going to one’s place of work is a non-religious act and going to a place of worship for an observance, a religious one, in Islam there is no distinction between the two. When a believer conducts his business or profession under the guidelines revealed by God, then his economic affairs are an act of Ibadah (Servitude, worship). Deen Al Islam is concerned with not only the spiritual life and salvation of its adherents but also their worldly and economic affairs. It has a finely tuned set of rules governing all aspects of life (Al Serhan 2011) How a believer buys and sells goods and services is also within the domain of Deen Al Islam. How wealth is managed, and acquired and shared with others, the Qur’an is not silent about such matters, but discusses them at great length. Thus all actions undertaken by Muslims are acts of worship (AlSerhan, 2011).

MANAGING THE MARKETING PROCESS IN THE LIGHT OF ISLAMIC VALUES

If marketing involves the management of 7 Ps, namely product, price, promotion, place, people, processes and physical evidence. (Wilson & Gilligan, 2005) and Islam applies to all spheres of human life, including economics, then it should be made clear what type of products are within the remit of Islamic marketing? How are they to be priced? What type of promotion is to be pursued? How are goods and services to be distributed? Are there any rules governing the role of people involved in the marketing function by what processes and in the acceptable physical environments? Let us explore some orders revealed in the Quran and then see their application on the marketing process:

INNOVATE

The Quran orders believers to study the workings of the physical word around them. Not only the physical world, but also the cosmos, as all have been created for a purpose. Forces of nature are to be harnessed and for this their constant study is required.

“And He has subjected to you, as from Him, all that is in the heavens and on earth: Behold, in that are Signs indeed for those who reflect.” 45:13

Thus the believers are described as those who do not sit idle but:

“.. reflect on the creation of the heavens and the earth..” 3:191

This shows that believers are supposed to be scientists and innovators. They are not to be content on the status quo of knowledge, but strive to make new discoveries and inventions which have benefit and utility for mankind.

TRADE BY MUTUAL CONSENT

“O you who believe! Eat not up your property among yourselves unjustly except it be a trade amongst you, by mutual consent. And do not kill yourselves. Surely, Allah is Most Merciful to you. “ 4:29

Trade should be by mutual consent. Situations where the consent of either party is not gained or is manipulated by some manner would not constitute a permissible transaction. Consumption of property without other people’s consent is prohibited. This is a widely encompassing rule and covers a lot of areas like theft, fraud, deception, robbery etc.

FULFILL CONTRACTUAL OBLIGATIONS

“And fulfill [every] covenant. Indeed, the covenant is ever [that about which one will be] questioned.” 17:34

It is absolutely vital that contractual obligations made by a Muslim business are met, whether such contracts are made with customers or suppliers. As the verse points out, meeting one’s contracts is a matter inquired about in the here after.

DEAL JUSTLY

“Indeed, Allah commands you to render trusts to whom they are due and when you judge between people to judge with justice. Excellent is that which Allah instructs you. Indeed, Allah is ever Hearing and Seeing.” 4:58

Justice and fairness has to be in each and every sphere of business activity. A Muslim business has to deal justly with suppliers, with employees, with customers and with shareholders as well as the public at large.

SUPPLY HALAL AND TAYYAB

A business operated on Islamic principles supplies what is Halaal (lawful) to consume and not Haraam (Unlawful). Obviously an Islamic business cannot run a pub or a casino, as such is prohibited in God’s revelation. The utility and benefit of products and services that are supplied also needs to be considered. Products have to be Tayyab. This is an important point to understand. The Qur’an requires of believers to consume that which is not only Halal but also Tayyab. The Arabic word Tayyab is contrasted in the Qur’an with Khabees:

“As for the good (TAYYAB) land, its vegetation cometh forth by permission of its Lord; while as for that which is bad (KHABEES), only the useless cometh forth (from it). Thus do We recount the Signs for people who give thanks.” 7:58

Thus in above, Tayyab is something productive and beneficial, while Khabees is what is useless. This explains that Muslims should market those products and services that fall in the category of being Tayyab and have utility and benefit for the consumer, without being futile or harmful.

We must note that in certain religious circles a lot of emphasis is laid on a product being Halal, but not on whether it is Tayyab. But to be kept in mind that Quranic order is for consuming Tayyab, and not just Halal. We may ask, is meat of inferior quality, though prepared through Halal slaughter method qualifies itself as being Tayyab?

DO NOT REDUCE WEIGHTS AND MEASURES

A business should provide its customers what it has paid for and not deprive them in any manner:

“And O my people, give full measure and weight in justice and do not deprive the people of their due and do not commit abuse on the earth, spreading corruption.” 11:85

“Give just measure, and cause no loss (to others by fraud). “ 26:181

Thus honest and transparent transactions should be the hallmark of Islamic marketers

DO NOT COMMIT FRAUD

“Woe unto the defrauders: Those who when they take the measure from mankind demand it full, But if they measure unto them or weight for them, they cause them loss.” 83:1-3

In an Islamic business, fraud should not exist in any stage in the business processes. Whether dealing with suppliers, internal customers (employees), external customers, shareholders or the public.

DO NOT BRIBE

“And do not consume one another’s wealth unjustly or send it [in bribery] to the rulers in order that [they might aid] you [to] consume a portion of the wealth of the people in sin, while you know [it is unlawful].” 2:188

An Islamic marketer will not engage in bribery.

DO NOT STEAL

“..that they will not steal..” 60:12

Theft is a broad term. It involves taking away what belongs to others without their knowledge. All forms of theft are thus prohibited.

DO NOT WASTE

“..But waste not by excess: for Allah loveth not the wasters.” 6:141

Waste is not just of inventory. Waste of space and time along with materials is also what clogs up supply chains, reduces profit margins and causes inconvenience to stakeholders. Quranic rules require that waste be eliminated from business operations.

DELIVER WHAT YOU CLAIM

“O you who believe! why do you say that which you do not do?” 61:2

A business making tall claims but not delivering on them can never be called an Islamic business, as believers only promise what they can deliver and never more.

HIRE STAFF THAT IS CAPABLE, TRUSTWORTHY AND DIVERSE

“Indeed, the best one you can hire is the strong and the trustworthy.” 28:26

The word “Qavi” and “Ameen” occur in the above verse. “Ameen” is trustworthy, while “Qavi” is having strength and capability. It is not enough to hire staff that is honest, it should also be capable of doing the job. Diversity is a key theme in the Quran, which does not favour any racial or ethnic group but considers all mankind as a single community.

“And among His Signs is the creation of the heavens and the earth, and the variations in your languages and your colours: verily in that are Signs for those who know.” 30:22

Thus a Islamic business should also employ a diverse workforce. The above principles are applicable on business processes as follows:

1. PRODUCT

A product is anything that can be offered to customers to satisfy a want or need. Hence products are what customers receive in return for a payment. Applying Islamic principles on products, we realise that they need to be innovative, Halaal (permissible), and Tayyab (beneficial, healthy, useful). As waste and environmental harm is prohibited. They should be beneficial and useful for for all mankind and not cater to the needs or lavishness of a few only. It is vital that products are genuine and original and not fake.

Scientific innovation has to be at the heart of any Islamic business organisation. scientific research and innovation used to be a regular feature in the Islamic world, and we have record of quite a few inventions attributed to Muslims. This also shows that Islamic marketing is not about Muslims consuming what others have produced, but for them to be at the forefront of latest innovative production methods.

2. PRICE

Price is the amount that a customer has to pay in order to receive a product or service. A central theme in the Quran is that the resources of the world are meant for all mankind. No group is to be deprived of the earth’s resources as God has created it for all.

“O mankind! worship your Lord, Who hath created you and those before you, so that ye may ward off (evil).” 2:21

“Who hath appointed the earth a resting-place for you, and the sky a canopy; and causeth water to pour down from the sky, thereby producing fruits as food for you. And do not set up rivals to Allah when ye know (better).” 2:22

In the above we see earth’s “fruits as food for you.” are for all mankind, thus any arrangement which deprives any member of the human race from the earth’s resources is against the spirit of the Qur’an. This leads us to the principle that when pricing products, it should be ensured that products are within the reach of all consumers and not so high so as to exclude any category. The producer is allowed to demand the compensation of his labour only, and nothing in excess:

“And that man hath only that for which he maketh effort.” 53:39

Thus Quranic principles impacting on the pricing of goods and services require pricing in a fair and just manner, and allow for remuneration of labour put in by business owners and employees.

3. PLACE

Distribution involves making a product available in the right place, at the right time and in the right quantity, while keeping storage, inventory and distribution costs to an acceptable level.

Islamic principles require that distribution should not be wasteful, not cause environmental pollution. Illegal and unethical distribution activities like hoarding, smuggling, fraudulent pricing practices like under invoicing, and other corrupt means of business such as bribery are all prohibited for a business working on Islamic principles. Strict adherence to contractual obligations with one’s dealers and agents is mandatory according to Qur’anic law.

4. PROMOTION

Promotion is the manner in which a business conveys to customers what it does and what it offers. There are numerous Islamic principles that apply on promotion, and their application makes it mandatory for a business to be honest and upfront when advertising itself. Fraudulent advertising or promotion with deceptive claims are thus prohibited. Advertising should not be excessive, and should not be unsolicited or invade on people’s privacy. There should be no sexism and stereotyping.

5. PEOPLE

A business governed by Islamic principles employs a workforce that is knowledgeable, capable, trustworthy and diverse. The workers are never to be oppressed but always granted their due rights, as Zulm (oppression) is never allowed by God. Welfare of employees is thus a key component of Islamic marketing.

6. PHYSICAL EVIDENCE

There are also certain ethos that need to be considered when designing the premises of your business or wherever customers come into contact with your product and service. Husn (beauty) and Zeenah (adornment) being emphasized in the Qur’an require that the premises be aesthetic along with being functional.

“Say: Who hath forbidden the adornment of Allah which He hath brought forth for His bondmen, and the good things of His providing? Say: Such, on the Day of Resurrection, will be only for those who believed during the life of the world. Thus do we detail Our revelations for people who have knowledge.” 7:32

There should be no wastefulness or excess. Accessibility is vital, as Quran teaches that all mankind should benefit from earth’s produce, therefore disabled, elderly and other customers who face any form of mobility issues should not be barred but be able to easily access a business premises governed by Islamic principles. The doors of the business should be open to all, and all segments should be welcomed.

7. PROCESS MANAGEMENT

A business run on Islamic principles does not rely on slave labour in any part of its supply chain. It has to ensure that supply chain management from outsourced factories does not rely on labour acquired from victims of human trafficking and slavery, for slavery has been forbidden by the Qur’an in clear terms:

“It is not (possible) for any human being unto whom Allah had given the Scripture and wisdom and the prophet hood that he should afterwards have said unto mankind: Be slaves of me instead of Allah.” 3:79

All procurement should be inclusive and transparent. Smaller traders should be given a chance to supply into the supply chain and larger businesses should not be allowed to have a monopoly. Working conditions in outsourced factories should be humane, and not pressurized to cut corners in order to meet orders of larger customers. Given the Qur’an command “and do not waste”, it is vital that waste, whether it is of material, of time or of space should be eliminated from the operations of the business. A business truly run on Islamic principles will have a smooth work flow, without bottlenecks. Customers should not be made to suffer or be left stranded but serviced quickly.

CONCLUSION – LAW, ETHICS AND REVELATION

When it comes to business transactions, there are two categories. Transactions that are legal, and one’s that are not. Some are legal, but not ethical, such that although there is no law barring such a business, people do not consider it to be the right thing to do. Ethics and legislation both have one thing in common. Both are man-made. Laws are what parliament or government decides upon, while ethics is what society considers as acceptable. To be noted that ethical norms and legislation are not permanent. A law of today can be repealed by a legislative body of tomorrow. Similarly, what is ethical in one society is not necessarily in the other.

Many equate the word ethics with religion, however the etymology of the word gives a different picture (Albuquerque, 2010). Moreover, ethics also vary with time. In the past it was considered unethical for women to go out to work, but not today. So we see that both, ethics and legal rules vary according to time and space. Both are a product of the human mind, and do not claim perfection.

This is where Islamic marketing comes in uniquely. Muslims believe that the rules to govern business in Islam are not the product of human minds, but are revealed by God. As such they are not restricted to time or space. Believers of one generation are to follow the same God given rules as believers of a previous era. These rules are applicable in any society and within any given time or era. Since God is the one who has given these rules, they are permanent and immutable as the definitive guide to human behaviour.