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Dr. Paul Temporal looks at the new world of Islamic branding and finds opportunities greatly outweigh obstacles

There can be no doubt that the next wave of brand development and success will come from the Islamic world. Its rise is partly a response to the surge of branding activity in the West since the late 1980s. By the 1990s a reaction had begun to kick in from Asia, with brands from Singapore, South Korea, India and China making considerable headway in global as well as regional markets.

Other factors are driving the development of Islamic brands. Islamic countries realize they cannot rely forever for their prosperity on their reserves of ‘black gold’. Dubai now has less than ten years’ oil left, Brunei less than fifty. It is also a sign of growing financial muscle. In global economic power the Islamic countries are rapidly gaining ground on their Western counterparts.

In the recent economic crisis the Islamic countries charged to the rescue of the West. Abu Dhabi in November 2007 took a significant $7.5 billion stake in Citigroup in order to rescue the giant financial services company from ruin. The Dubai Investment Corporation has taken positions in many globally known corporations such as HSBC and SONY. And as the Crunch bit deeper, investors in Abu Dhabi and Qatar stepped in to offer £7 billion to troubled UK bank, Barclays, and Kuwait Investment Authority took significant stakes in Daimler AG and Citigroup.

Many analysts see the cultivation of intangible assets such as strong brands as an essential feature in a mature and stable national economy. It is perhaps therefore not surprising that Islamic branding successes are gaining profile. Emirates Airline is one example, Kuwait's telecommunications company Zain another.

Islamic populations represent a vast potential market. Around a quarter of the world’s population is Islamic by religion, with varying degrees of affiliation and observance of the Quran. While business leaders and others in the West think of the Islamic population as concentrated in a crescent of nations in the Middle East, significant minority Muslim populations girdle the globe from France to China and beyond.

This huge market has snagged the attention of many Western multinationals. Nestle is now manufacturing many of its brands using Halal processes and is working with Halal accreditation agencies to fast-track growth in Islamic markets. Several Western fast food chains including McDonalds, KFC and Subway are opening more and more outlets that serve Halal products.

Makers of toiletries such as Unilever and L’Oreal have introduced campaigns to gain the loyalty of that fast-growing group in the developing world, middle class Muslim women. And when it comes to buying high fashion Muslim women have never been behind in looking to the West. Significantly, an increasing number of Islamic brands are also targeting Muslim women. They include Safi, a Malaysian brand of cosmetics and hygiene care, Ahiida.com, a brand of swimwear for Muslim women (popularly known as the ‘Burqini’) and fashion magazine Her Modesty Magazine.

However Islamic brands face several challenges. Perhaps the biggest concerns Halal products. This is actually a double difficulty. Firstly, Halal evokes a very narrow and often narrow image in Western minds. In fact, Halal has far broader and more positive implications to do with pure and healthy living. The little noted overlap between Western concerns about the environment, sustainability and organic products and the core beliefs of Islam is increasingly relevant here. Islam not only advocates trade only of what is clean and wholesome but teaches that property is a sacred trust, that everything belongs to God, and that Man is only His temporary khalîfah (‘steward’) on earth.

But even in predominantly Islamic countries there is no common agreement on what actually constitutes Halal. Throughout history different countries and Sharia councils have come up with different interpretations. Disagreement extends beyond products to logistics. Some countries check rigorously whether Halal products are stored and transported separately from non-Halal products, others do not.

Islamic brands also run foul of the ‘country of origin’ issue. Mention ‘Islam’ in the West and a negative reaction often kicks in. The biggest educational challenge for marketers of Islamic brands is to move attention away from where products have come from to what they are actually are and the qualities they possess. There is a parallel here with the shift in consumer perceptions which has been achieved regarding the label, ‘Made in Japan’ since World War II. Immediately after the War that label meant cheap copies of Western products; now it connotes high tech products of high quality and reliability.

Muslims, as global citizens, want the latest, most beautiful and best designed trappings of the Western world. They adore Western brands - Manchester City and Aston Martin included - and want to have more. But, while Islamic audiences love the Western big brands, they want their own - for two reasons. Firstly, many Western brands are not yet compliant with Islamic values, and, secondly, Islamic countries want to create their own global brands which they see as strategic business assets and national brand ambassadors.

For both East and West the challenges are daunting. Western brands have the marketing and branding expertise but often lack the cultural awareness and local knowledge to penetrate Islamic markets successfully. For leaders in predominantly Muslim countries there is an array of branding opportunities ranging all the way from products to companies and organizations and even national identities. But they admit to not having enough knowledge and skill to do the job properly. They are buying a lot of brands but still do not know how to run them, relying instead on expat employees. Islamic business schools lag in teaching branding. But then so do Western business schools: both see it as a subset of marketing rather than the other way round.

So, there is enormous pent-up demand in Islamic countries to learn about global branding and marketing and a keen desire from a business perspective to learn the techniques and skills so ably demonstrated by the West. The key lies in education, training, and joint research that is intended to address both aspiring brand owners and managers in Islamic countries and marketing managers in Western corporations keen to succeed in Islamic markets.

Dr. Paul Temporal is working with Saïd Business School, University of Oxford, on a major Islamic branding and marketing research and education project.