Marketing of Islamic Banking Products


Marketing is an integral part of all fields of business including banking because it enables a selection of the most appropriate strategies to promote products into the market, develop fresh ideas, and improve performance about changes in the international market. Though the current situation maybe not be as bright and effective as one would like it to be, the Islamic banking system has several opportunities to use to improve its performance, attract more clients, create their awareness of potential benefits, and build customer loyalty to a brand with the help of marketing techniques applied to bank products.

As such, it is important to review the existing marketing strategies and be ready to apply the most appropriate to the Islamic banking products assuming that the use of credit cards and more aggressive marketing policy would be beneficial for the Islamic banking system.

Marketing of Islamic Banking Products

Bank marketing: The experience of the USA system

The banking products are the results of the bank’s operations including credit cards that enable consumers to consume more than they could presently afford and pay for their purchases later taking into account interest on credit. The system of credit cards is not as popular in the world, namely in Islamic countries as in the United States of America.

So, the Islamic banking system could effectively adapt the marketing strategies used in the USA about the peculiarities of marketing tools such as four P’s – place, price, product, and promotion – applied to the credit cards in the USA and the UK. As suggested by Andrew, “aggressive marketing which is based on selling the card benefits to the consumer’s needs is liked by the consumer” (31) which means that the same strategies may be implemented to attract more customers to the Islamic banks and persuade them of the benefits of this system.

Strategic marketing management

The difference between Islamic and non-Islamic banks is outlined in the article by Naser and Moutinho who dwell on the importance of implementation of marketing strategies for Islamic banks to survive in the changing conditions of international banking. The increase of competition is one of the driving forces that should be taken into account by the heads of Islamic banks to operate effectively in the market.

The investment opportunities are claimed to be advantageous and disadvantageous concerning the Islamic banks because of the operation of Islamic banks by Sharia’h principles that exclude interest and are mostly based on equity rather than on interests and financial benefits. As suggested by Naser and Moutinho, Islamic banks should “become involved in the marketing strategy of western banks” (202) to be more effective and attractive for customers.

Marketing strategy

Marketing strategies can be different in different countries though it is necessary to learn about the experience in other countries concerning effective or ineffective marketing tools and the favorable conditions for the application of the specific tool. The experience of Pakistan and Malaysia in terms of banking marketing strategies should be reviewed to learn more about the customer perception and importance of marketing strategies to attract new customers and sustain the existing patronage.

Experience of Pakistan. A favorable environment for the development of Islamic banking exists currently in many countries including Pakistan that can be considered one of the countries that can use the marketing strategies effectively to increase the number of customers and return rates.

As suggested in the study by Tahir and Umar, one of the most important ways to attract customers and investors concerns the marketing strategy; “A suitable marketing strategy can be developed by understanding internal strengths and weaknesses and the external opportunities and threats” (60).

As such, analysis and comprehension of the external situation may be beneficially applied to the development of conditions for improvement of the internal situation. The banking marketing strategies should be strictly opposed to the previous situation in Islamic banking when the owner of the capital was the bank itself for the one who needed the capital and borrowed different sums of money from individuals.

The situation in Malaysia

Public support and eagerness to deal with the Islamic banking system demonstrated by customers in terms of increased capital of deposits and loans during the operation of the first Malaysian Islamic bank that positioned itself as an international one let one claim that customer satisfaction is one of the major factors of effective performance.

The annual growth of credit and deposit facilities in the Islamic bank in Malaysia is predetermined by the high demand for these banking products and the desire of customers to deal with the bank. The vision of the bank and its mission statement are open for customers of Islamic banks contrary to the non-Islamic ones (Haron and Nursofiza 7) which make the operation of Islamic banks more beneficial and outlines the open demonstration of vision and mission as marketing strategies.

Clients of Islamic banks

The importance of clients is high for all banks including Islamic because the customer satisfaction and the ways they choose their banks. The criteria for selecting the bank with the most favorable conditions for a consumer of banking products should be actively taken into account by the Islamic banking system to sustain their competitive advantage and operate effectively in the market with other banks including Islamic and non-Islamic (Al-Ajmi, Hussain, and Al-Saleh 1088).

Though religious beliefs play one of the roles in the customer bank selection process, several other important criteria were indicated in the study by Al-Ajmi, Hussain, and Al-Saleh where “economic, convenience, the influence of others, satisfaction with the bank’s products and services, reputation, and social responsibilities” (1093) were considered more important factors influencing the selection of the bank by Christians and Muslims than their religious beliefs.

Perception of customers

As it has been stated before, the role of customers in every industry is great, especially about the relationship between customer satisfaction, customer perception of the brand, goods, and services as well as criteria established by customers to select the most appropriate companies to deal with. In this respect, the perception of the Islamic banks by customers should be influenced with the help of marketing strategies to bring their evaluation to a brand-new level.

However, religious beliefs are not recognized as the influential factor in selecting Islamic banks in the study by Ahmad and Haron who insist that the decisive components that contribute to the effective operation of Islamic banks and attract new customers and sustain the existing ones include “provision of a fast and efficient service, bank’s reputation and image, and confidentiality” (16). At the same time, the stability of the Islamic banks gives them a more beneficial position as perceived by customers contrasted to conventional banks.

Opportunities for international operation

There are many opportunities for the Islamic banking system in the world because of the favorable environment that can be beneficial for Islamic banks and Islamic banking branches in conventional banks all over the world. In this respect, it is necessary to emphasize the importance of implementing strategies to improve the Islamic banks’ operation and make them more competitive in terms of rivalry with conventional banks.

One of the examples is set in the study by Mahlknecht and Hassan who analyze the opportunities for Islamic banks on the territory of Australia. Moreover, the market changes promise to be effective for the Islamic banks as suggested in the study by Bell concerning Australian laws and regulations, “the Federal Government is committed to making the regulatory framework governing banks flexible enough to accommodate Islamic banking products and services while still protecting consumers” (cited in Mahlknecht and Hassan 349). Besides, the development of Islamic banking products is an attractive opportunity for different countries.

The Way for Islamic Banking to Be Dominate

Developing strategies

The marketing strategies should be introduced into the banking system of banks that operate by Islamic religious laws to help them gain stable positions in the international market of similar services though make them more effective with the help of specific marketing tools. As such, it is necessary to focus on the basic types of marketing strategies mentioned in the study by Al-Ajlouni, “consolidation, cost leadership, merger & acquisition (survival strategies), market development and diversification (confrontation strategies)” (4).

Besides, it is necessary to apply other important strategies to ensure that the Islamic banks not only remain stable operators in the international market of banking products but would also develop their area of influence. Though Islamic banks operate by Sharia’h laws, this fact does not exclude non-Muslims from the number of their regular consumers. Every strategy should include the main preferences and principles customers use to select banks; so, the human resource strategy should also be one of the basic ones.

Competitive edge

Every company wants to be ahead of the rivals that operate in the same market. It is important to know how to become distinctive from other firms and businesses that provide similar goods and services. Tarver suggests an insightful overview of the competitive advantage strategies; all these strategies seem to apply to Islamic banking products due to several principles in accordance to which the competitive edge can be reached.

One of the strategies implemented in practice concerns the following approach: “Recognising the importance customers attach to convenience, bankers opened new branches and offices near major residential areas and employment centers” (Tarver 62).

Product and enterprise differentiation, as well as marketing orientation achieved through personnel, are integral parts of the effective banking marketing strategy, especially taking into account the number of conventional banks and the quality of services they offer in contrast to the number of Islamic banks and ratio of non-Islamic customers that comprise patronage of the Islamic banking system.

Relationship marketing

The relationship between the conventional bank and its customers resemble greatly the relationships in western society in general whereas the Islamic banks contribute to the development of friendly relationships between the bank and customers often involving personnel as a marketing strategic tool.

In this respect, Islamic banks may achieve more in terms of attracting customers; some customers are believed to select Islamic banks due to professionalism and the friendly attitude of the personnel. As reported in the study by Heffernan et al., concerning the development of stable relations with customers based on the trust include the following, “increased profit through reduced risk, improved communication links, and referrals, and an increase in customer satisfaction leading to more loyal customers” (185).

The concept of trust is claimed to apply to the financial context due to the contribution of relations to the bargaining power of consumers. As such, customers of Islamic banks are sure to benefit from the approach chosen in this branch of banking due to the high level of trust developed between the bank and its patronage.


The current situation in the banking system shows that there are many new entries into this system that try to gain their share of the market using a more Western-like aggressive approach in terms of marketing strategies applied to attract more clients and sustain their competitive advantage.

However, there is a new ‘player’ in this game called the financial sector that includes Islamic banking products. Islamic banks are highly effective, especially in their operation by the Sharia’h laws that exclude any possibility of gaining interest. Effective relationship marketing techniques are already used in Islamic banks whereas they need to apply more aggressive marketing strategies to enter the international financial market. In this respect, training of personnel, competitive edge, and four P’s (product, price, promotion, and place) can be implemented as the basic marketing strategies for Islamic banking products.

Works Cited

Ahmad, Norafifah, and Sudin Haron. “Perceptions of Malaysian Corporate Customers towards Islamic Banking Products and Services.” International Journal of Islamic Financial Services 3.4 (2002): 13-29.

Al-Ajlouni, Ahmed. “Developing Strategies for Islamic Banks to Face the Future Challenges of Financial Globalization.” MPRA Paper No. 13581, 2004.

Al-Ajmi, Jasim, Hameeda Abo Hussain, and Nadhem Al-Saleh. “Clients of Conventional and Islamic Banks in Bahrain. How They Choose Which Bank To Patronize?” International Journal of Social Economics 36.11 (2009): 1086-1112.

Andrew, Kenneth. “Bank Marketing in a Changing World,” International Journal of Bank Marketing 8.5 (1990): 2 – 56.

Haron, Sudin, and Wan Nursofiza Wan Azmi. “Marketing Strategy of Islamic Banks: A Lesson from Malaysia.” Working Paper Series 006. Creating Dynamic Leaders, 2005.

Heffernan, Troy, et al. “Relationship Marketing: The Impact of Emotional Intelligence and Trust on Bank Performance.” International Journal of Bank Marketing 26.3 (2008): 183-199.

Mahlknecht, Michael, and Kabir Hassan. Islamic Capital Markets: Products and Strategies. Chichester, West Sussex: John Wiley and Sons, 2011.

Naser, Kamal, and Luiz Moutinho. “Strategic Marketing Management: The Case of Islamic Banks.” International Journal of Bank Marketing 15.6 (1997): 187–203.

Tahir, Muhammad, and Muhammad Umar. Marketing Strategy for Islamic Banking Sector in Pakistan. Final Thesis. Blekinge Institute of Technology School of Management, Ronneby, Sweden, 2008.

Tarver, John L. “In Search of a Competitive Edge in Banking: A Personnel Approach.” International Journal of Bank Marketing 5.1 (1993): 61-69.

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