Strategies for Overcoming Marketing Challenges for Islamic Banking Products
Islamic Banking needs to differentiate their products from the conventional banking products as these products are free from Riba plus the principles on which the Islamic Banking runs is based on Islamic Teachings and Principles. Therefore, these products are to be handled with a little more care than the products of conventional banking products because a little misunderstanding in the minds of the customers can backfire.
Islamic Banking Products need to be promoted in an entirely different manner. New segments needs to be created for all the Islamic Banks working as there would be more and more individuals who would like to keep their money in an Islamic Bank rather than in a conventional bank. Similarly, people interested to take loan would rather go for Islamic Loans instead of conventional loans from the conventional banks.
Marketers should exploit the advantages and differences of Islamic and Western style of Banking particularly in Islamic Countries. It is important how the product is promoted as promotional activities help in creating or changing the perception of the people.
These products need to be promoted in such a way that Muslims using the Western style of Banking products should shift towards the Islamic Products. There can be number of strategies for the promotion of these products like:
- Promoting in a way that the people are shown that even the principle amount of money is also converted into Haram because of the Riba involved in Western concept of Banking.
- Promoting by saying that those who invests in Interest Banking products think they are increasing their money though they aren't (it is an interpretation of one of the Quranic Verse).
- Explain the concept of Musharaka and Mudaraba instead of investing in Fixed Income Funds. So, Islamic banks can create new market segments like
- • By acting as a Mudarib Islamic Banking products can reduce the risks so a new risk adverse segment for the investors can be created.
- Also, by providing interest free loans these Islamic Banking Products can be segmented for the new entrepreneurs or current entrepreneurs who are seeking funds at a lower rate.
- Individuals and Household people who invest in fixed deposits for long-term as well as short term by letting them know that they can earn more profits than conventional banks because they will earn their share of profit rather than a fixed amount of interest
- Investor who wants their money in saving accounts by positioning their saving accounts as interest free as well as profit earning rather than a fixed amount of interest earnings.
- Current account holders by guarantying them more facilities and better services.
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